Hodgson defends forest concessions to Russia

By BRIAN FALLOW, Economics editor

Climate Change and Forests Minister Pete Hodgson rejects claims by the Forest Industries Council that a sweeter deal for Russia under the Kyoto Protocol will disadvantage New Zealand.

A ministerial meeting in Marrakesh, Morocco, last week turned the political deal in Bonn in July which salvaged the Kyoto Protocol into a detailed set of rules.

Russia successfully argued that in Bonn a mistake was made in setting the amount of tradeable carbon credits it should be allowed for the way it manages its forests.

This relates to an environmentally controversial section of the Kyoto Protocol covering human activities which boost a natural (rather than plantation) forest's ability to take up carbon dioxide from the atmosphere. It might be applying fertiliser, or even more rigorous fire control.

"The science is quite dodgy, and for that reason caps have been placed on countries' total allocations," Mr Hodgson said. "Many countries, including New Zealand, don't even try to get that stuff counted. It's too small and too hard to measure."

But Russia, which has to ratify the Kyoto Protocol if it is to come into force at all, insisted that the 17 million tonnes it was allocated in Bonn should rise to 33 million.

James Griffiths, of the Forest Industries Council, said it was perverse to give Russia an extra allocation for forest sinks.

Russia, New Zealand's main competitor in Asia wood markets, relied mainly on clear felling old growth forests, he said.

"We are flat out trying to determine the impacts on the competitiveness of our sector relative to countries outside the Kyoto Protocol. Now we are faced with having to manage unfair advantages to countries in the Kyoto Protocol."

To the extent that the Russian deal increases the supply of carbon credits (or emission permits) in the international market, it would lower the price - bad news for the sellers of New Zealand forest sink credits, but good for emitters or the Government, which would have to buy them.

But Mr Hodgson said the extra 16 million tonnes Russia had been given was equivalent to less than a third of 1 per cent of total world greenhouse gas emissions. It would lower the carbon price only fractionally, he said.

Russia would not be able to claim the credits until an expert team had reviewed the scientific basis for its claims.

"In any case Russia, if it signs up to the Kyoto Protocol, will no longer be able to undertake unsustainable forestry practices, or if it does it will have to pay for them," said Mr Hodgson. "If you deforest faster than nature can regenerate, you become a source [of greenhouse gas emissions] and you have to have carbon permits to cover that.

"That is likely to reduce the flood of Russian timber flowing across the border to China."