Kyoto pact will nobble NZ forestry, says CHH

By BRIAN FALLOW

The Kyoto Protocol would hamper New Zealand even further in attracting capital for wood processing, says Carter Holt Harvey.

A single factor such as higher energy and transport costs arising from the climate change treaty might not be enough to drive business overseas, "but there are very few tricks in New Zealand's box," said chief operating officer Jay Goodenbour.

"Do we have any unique technology in New Zealand that can't be replicated in China? No."

Labour costs were lower in China, he said, and tariffs were a problem.

"It is much easier to get logs into China or India than finished products. Even with the new WTO round, it will be years before those tariffs come down."

China had subsidies to encourage domestic investment in wood processing.

Similar arguments applied to new planting, said Mr Goodenbour.

An investor establishing a forest in China could claim credits under Kyoto's clean development mechanism, to add to the advantage of producing wood close to a large and growing market.

"Why would you plant trees in New Zealand when you can maintain all your options in China?"

Mr Goodenbour, who has just returned from a visit to the Russian Far East, is incredulous that Forestry (and climate change) Minister Pete Hodgson helped to broker an agreement to sweeten Russia's position under the protocol.

The extra 16 million tonnes of carbon sink credits, which unlike New Zealand's were for pre-1990 forests, represented a windfall that would help the Russians to build more forestry roads and compete with New Zealand logs, he said.

Russia is New Zealand's main competitor in Asian log markets.

Mr Goodenbour said the Russian logs were from slow-growing, old-growth trees clearfelled in forestry concessions granted corruptly after the fall of the Soviet Union.

"No one we spoke to had even heard of the United Nations climate change convention. It's the Wild West."

Mr Hodgson has said that if Russia signed protocol it would be penalised for unsustainable logging.

"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," he said.

But Mr Goodenbour said independent verification in such a huge country would be beyond anyone.

"So it comes down to trustworthiness. Well, it's not a country I would trust."

nzherald.co.nz/climate

Intergovernmental Panel on Climate Change (IPCC)

United Nations Environment Program

World Meteorological Organisation

Framework Convention on Climate Change

Executive summary: Climate change impacts on NZ

IPCC Summary: Climate Change 2001