Napier Regional Forestry ETS Meeting
30 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:
− Question about the value of NZ Units (NZU). Wealth will be created and decimated.
− Uncertainty about whether to mitigate early or wait.
− Interest in the ETS's progress through the political system.
− Questions about why NZ signed the Kyoto Protocol and how the ETS will reduce CO2.
− Interest in carbon sequestered by grasslands.
− Confusion about reports preferring carbon tax vs ETS.
• Post 1989 forests (voluntary participation in ETS):
− Appreciation for the carbon credits, after a long battle.
− Larger company interested in costs of participating.
• Pre 1990 forests:
− 50ha exemption may be too low. Tax and liability issues for those wanting only one rotation.
− Noted inability to deforest one site and plant a different site. Desire for 'land swapping.'
− Question about whether there is an opportunity to rescind the ETS deforestation measures.
− Deforestation for roading needn't affect compliant forest land area.
− Question about whether a small part of an area of current harvesting which cannot be completed by 1 January 2008 can be exempt [no].
− Confusion about how to understand the implications for forests, e.g. those with pre 1990 forests with part replanted and part deforested etc.
• Generic points:
− ETS comprises a radical change for how the forest industry will value 1 tonne of wood.
− Desire for recognition of carbon retained in harvested wood products, e.g. buildings.
− Desire for promotion of wood use.
− Implications of unharvested old-aged forests.
− Implications for land value for pre 1990 vs post 1989 forests.
− Shelterbelts are excluded from the ETS.
− Clarification that there are no Kyoto units for pre 2008 carbon [however there is a 'grey market' e.g. Landcare's Ebex21].
• Liabilities, costs and risks:
− Price rises for carbon credits (NZUs) - a risk if you need to buy them back later.
− Huge risk to trade credits, if want to harvest.
− Concern about carbon liability if fire destroys entire estate.
− Potential for cashflow from carbon credits during life of forest.
• Measurement:
− Desire for guidelines and formulae/carbon models asap so can calculate credits (NZUs).
− 300 Index is not always an accurate stand volume prediction, depending on rainfall. [Ref cooperative reports 'Validation of 300 Index'].
− Suggestion that regional differences be considered, and that MAF work with regional industry. Owners want to maximise value of credits.
− Interest in reconciliation between tonnes harvested and NZUs assigned.
• Indigenous forests in the ETS:
− A view that the free allocation to indigenous forests is not enough.
− Interest in native and other species as alternative to radiata.
• Tax issues:
− Concern about option of being taxed annually on basis of the value of credits (NZUs) held.
− Question about whether income from selling of units can be spread over several years.
− [Submissions on tax proposals have closed. Copy late submissions to bryan.smith@maf.govt.nz or climatechange@maf.govt.nz attention Bryan, and he will ensure it is passed on].
• Agroforestry:
− Questions about which agroforestry is eligible for ETS or for offsetting emissions.
− MAF will do more work on the 'poplar issue.'
− View that farm foresters are disadvantaged by previous plantings and QEII Trust covenants - no reward, and no land left to plant. Want equity across industries.
• Agriculture sector comments:
− Questions about how the 90% reduction of free credits will occur.
− Interest in how farmers' liabilities will come into force [point of obligation] and be under their control.
− Interest in when new plantings start to generate useful credits (looking towards 2013).
− Note that harvesting requires credits to be repaid, or to be covered by credits from further land planted.
− Interest in pressures that the ETS/credits will have on agriculture, e.g. hill country farming. Desire for forestry and agriculture in the 'best' places.
− Farmers hold NZ's biggest land bank. Need to encourage farmers to plant more trees to offset emissions.
− Interest in planting trees elsewhere to offset farm emissions.
− Desire for recognition of existing sinks (sustainable land management).
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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