Government still flexible on Kyoto penalty charges

Scrapping a controversial plank of the Government's Kyoto policy for forestry is still an option, ministers say, although something else will have to take its place.

An NZPA report in yesterday's Herald quoted a spokesman for Climate Change Minister David Parker as saying that lifting the deforestation cap was not under consideration.

But Kyoto Forestry Association spokesman Roger Dickie said yesterday that was at odds with private assurances given by ministers and officials.

The comment as reported was described as an error by Forestry Minister Jim Anderton.

"Yes it's an option," Mr Anderton said. "But there's no free lunch here. We can't take away everything they don't like and replace it with nothing."

Mr Parker said: "What my spokesman said was that the cap was not under consideration for removal without other policy, and that's correct. But it is still a live issue."

The other policy would be intended to discourage deforestation and/or encourage new planting.

Under the rules of the international climate change treaty, the Kyoto Protocol, New Zealand earns credits for new forests established after 1990 on land not previously forested.

But the flipside is that when forests are felled and not replanted, it is liable for the emission of the carbon stored in the trees.

Under current policy the Government keeps the credits for new planting, but on the other side of the ledger has said it will only accept the liability for deforestation up to a cap of 21,000 tonnes.

That would represent about 10 per cent of the expected harvest between 2008 and 2012.

If more than that is not replanted, someone other than the taxpayer will have to bear the cost of the Kyoto liability that arises.

But there is no mechanism to decide who will pay or how and the deforestation cap is very unpopular among forest owners.

Figures from the Ministry of Agriculture and Forestry this week give weight to officials' warnings to the Government last year that if nothing changes, deforestation liabilities could be more than twice the cap.

MAF estimates that of 40,600ha harvested last year, 8600ha was not replanted.

At the same time the area of new plantation forest established fell to 6000ha from 10,000ha in 2004 - continuing the decline from a peak of nearly 100,000ha in 1994.