Balclutha Regional Forestry ETS Meeting
18 October 2007
Key Themes
Introduction: These key themes are a record of points raised by participants at the meeting – they are not the consensus of the participants.
• Emissions Trading Scheme (ETS) in general:
• Interest in why forestry sector is first in, and what the implications are for the forestry and agriculture sectors of the climate change policies.
• Question about agriculture sector point of obligation(s).
• Noted potential for carbon lease market, hedging. [Note: the term 'carbon' means New Zealand Unit (NZU). One NZU is equivalent to one tonne of carbon dioxide].
• Post 1989 forests (voluntary participation in ETS):
• Appreciation of the devolution of credits/ liabilities.
• Questions about implications for various forest regimes.
• Pre 1990 forests:
• A view that plantation forests are carbon neutral.
• Inequitable treatment of pre 1990 forests. Free allocation is relatively small cf the full liability. This is seen as a distortionary move with respect to competitors.
• 50ha exemption represents a large number of owners. Concern that corporate forestry will subsidise small growers.
• A view that the 2ha exemption may be unworkable.
• A view that the tax payer should wear the liability, not the forester.
• Concern that pre 1990 forests are effectively locked into forestry (unless its profitable to pay the deforestation liability).
• Generic points:
• Interest in recognition for carbon retained in harvested wood products.
• 'Forest' definition being >30m wide ignores the benefits of riparian and shelter plantings.
• Discussion about option of the forestry processor as the 'point of obligation'.
• Liabilities, costs and risks:
• Question about whether the price of carbon (NZUs) could reach a level where it pays not to harvest.
• Implications for processors, timber flow and log prices. Concern about the future of sawmilling industry if log prices increase substantially.
• Concern about uncertainties. However, a more powerful negotiating position could result (carbon vs timber values).
• Observation that selling carbon credits (NZUs) early could result in larger liability later if the price has increased if needing to buy them back.
• Interest in the need for insurance.
• Indigenous forests:
• Interest in implications for clearing indigenous forests cf district plan rules.
• Information needs:
• Desire for model(s) to demonstrate what the scheme means for the average farm forester.
• Need for information transfer via field days etc.
• Comment that future meetings and events need better advertising.
• Afforestation and agroforestry:
• Comment that the ETS will favour forestry on marginal land (including high country). Regional councils will need a regulatory framework to manage potential undesirable effects. There is a need for national guidance, e.g. a national policy statement about locating forestry with respect to sensitive areas. More thought is needed at central government level about ETS's impacts on local government of requirements for plan changes, administration, the costs of these, etc.
• Interest in roles for regional councils in facilitating planting.
• Questions about definition of 'forest' and whether agroforestry qualifies.
Contact for Enquiries
Sustainable Land Management and Climate Change
MAF
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: 0800 CLIMATE (254 628)
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