No New Tree Planting This Parliamentary Term

Press Release - 28 July 2009

Climate Change Minister Nick Smith is "badly misreading commercial and
economic realities" if he thinks the Government's planned changes to the
Emissions Trading Scheme (ETS) will lead to the private sector resuming
tree planting, the Kyoto Forestry Association (KFA) said today. 

KFA was responding to Dr Smith's comments on TVNZ's Q+A programme over
the weekend and on Radio New Zealand' National's Morning Report
yesterday saying New Zealand needed new trees and that he hoped changes
to the ETS would restore confidence to the forestry sector.

KFA spokesman Roger Dickie said Dr Smith was right in saying that only
the efforts of Kyoto forest owners in the 1990s in planting around
50,000 hectares of new forests a year are keeping New Zealand's Kyoto
account in balance "but sadly he is incorrect if he thinks the
Government's plans to water down the ETS are going to encourage new
planting".  

Mr Dickie said KFA understood the Government plans to further delay the
entry of polluting sectors into the ETS, increase their compensation and
exclude agriculture.

"This means forest owners will have no one domestically to sell our
credits to, and so the domestic price for carbon will remain low, which
will not encourage investors to plant new trees.

"There has also been discussion around the likelihood the Government
plans to put a cap on the price of carbon, which would prevent
international trading of New Zealand Units (NZUs).  Our carbon credits
will therefore have no significant value.  No private-sector investor
will risk their capital to plant new forests under these circumstances."

Mr Dickie said Kyoto forest owners had mostly welcomed last year's
change of government, including the National Party's manifesto promise
to encourage the planting of 600,000 to 800,000 hectares of hill country
land that is prone to erosion and is not currently forested (see
http://www.national.org.nz/files/2008/forestry.pdf 

"Unfortunately, we have seen nothing from the new Government so far that
gives us any confidence that promise will be delivered," Mr Dickie said.
"To the contrary, we doubt there will be any new planting this year, and
very little in the next two years - the whole of the first term of the
new Government."

KFA represents the more than 30,000 ordinary New Zealanders and forestry
companies who risked as much as $175 million per annum of their own
capital to invest in more than 250,000 hectares of new forestry in the
1990s, both because of the benefits predicted to arise from the sale of
wood products and for the carbon credits earned from carbon
sequestration.  These carbon credits, worth some hundreds of millions of
dollars, were confiscated by the previous Labour Government but later
returned following a high-profile campaign by KFA.