Forestry and Government in stand-off

Jim Anderton

The stoush between the forestry industry and Government took a turn for the worst yesterday as figures confirmed taxpayers' growing liability under the Kyoto Protocol.

Industry representatives walked out of a meeting with Ministry of Agriculture and Forestry officials on Wednesday after the latter refused to discuss the pros and cons of a framework policy proposed last year.

This contrasts with constructive talks held on Thursday between climate-change officials and large industrial emitters and power companies.

"We were simply brushed off by MAF officials," said Forest Owners Association chairman Peter Berg.

He said that the officials had refused to discuss any specific policy options and, "unbelievably", said doing nothing remained one of the options they would be presenting to the Cabinet early next month.

Forestry Minister Jim Anderton and Climate Change Minister David Parker said they were keen to continue discussions with the industry and acknowledged how important commercial forests were in lessening the impacts of climate change but the Government could not ring-fence forestry and make decisions for it in advance of other sectors.

Preliminary MAF figures show no net increase in the size of the plantation forest estate last year.

In the Government's financial statements for the six months to December 31 released yesterday, the Kyoto liability - an estimate of how much it will cost to buy credits to cover the shortfall from New Zealand's target under the climate change treaty - has been revised to $562 million from $310 million in June.

The larger part of the revision reflects a jump in the amount of forest land that is not replanted upon harvest, which creates a liability under Kyoto's rules.

The $562 million figure is liable to be revised upward again, as it assumes a price of US$6 ($9) a tonne for those credits when the market price is closer to US$10 and uses an exchange rate of 68USc.

It also assumes the Government will be able to lay off on to the industry any liability for deforestation above 21 million tonnes.

Association chief executive David Rhodes said a key plank of the industry's proposal was that the deforestation cap had to go. It was effectively a retrospective tax on people who had planted trees in the late 1970s and early 1980s.

The other key industry proposal was that if the Government was unwilling to devolve the credits that the country earns for forests planted since 1990 on previously unforested land, it at least had to look at providing the owners with some form of financial recognition of the national value of the carbon taken up by their trees.

"During last year's review of climate change policy, we felt we were being listened to and then we got endorsement from ministers about the inequities that were there and the fact that there needed to be encouragement" to plant and replant forests, Rhodes said.

"Now to suddenly feel either the tide is turning or it it isn't what we thought is doubly frustrating."