Carbon scheme never factored into land deal, says negotiator

Willie Te Aho. Photo / Supplied

Forested land transferred to central North Island iwi in a major Treaty settlement last year was at values that did not fully reflect the negative impact of the emissions trading scheme, one of the negotiators, Willie Te Aho, says.

The Government is in talks with the Iwi Leadership Group over potential partnerships with iwi to establish carbon farming operations on Crown land.

The idea is to establish permanent native forests on what is now bare land, providing jobs and an ongoing income stream for the iwi involved from carbon credits generated under international climate change rules.

For the Government it has two attractions. It would help secure Maori Party support for legislation to amend the emissions trading scheme, though it is only one of the issues the party has raised.

It might also head off litigation against the Crown by Ngai Tahu, Waikato Tainui, Te Uri o Hau, Ngati Awa and Ngati Tuwharetoa.

They allege the emissions trading scheme devalues land they have received in Treaty settlements, locking at least some of it into a second-best use by imposing a prohibitive cost if it is converted from forestry. They accuse the Crown of bad faith, saying it knew there was at least a risk of that when the settlements were agreed.

The National Government appears to see some merit in that case - enough to want to settle out of court - but insists that it does not apply to last year's $400 million "Treelords" settlement in the central North Island.

The parties to that agreement, it says, went in with their eyes open as to potential impacts from ETS rules on deforestation. But Mr Te Aho said the valuation agreed for that land was a political compromise and not one based on the science of valuation.

Climate Change Minister Nick Smith said: "The Crown has been very clear that Treaty settlements are full and final and that the Crown needs flexibility to respond to new issues that will impact on the value of businesses and assets they get through the Treaty settlement process." The central North Island settlement was not on the table for discussion, he said.

It has been estimated that some 30,000ha of the land transferred in that settlement might be suitable for pastoral farming but under current Kyoto rules and at today's carbon prices it would cost about $600 million to meet the deforestation liabilities conversion would incur.

The ETS amendment bill the Government wants to see passed before Christmas would not address that issue, but it is seeking a change to the international rules relating to deforestation which would at least reduce the cost to landowners of land-use change out of forestry.

In its minority report on the bill the Maori Party said retaining flexibility of land use for future generations was imperative.

In addition to retrospective Treaty forest issues, the party is keen to encourage afforestation investment by iwi more generally.

Landcare has estimated there are some 200,000ha of Maori-owned land which is marginal for conventional farming but potentially suitable for carbon farming.

The Maori Party says this would require changes to the Permanent Forest Sinks Initiative introduced by the Labour Government in 2006.