Farmers have lost confidence in tree planting according to New Zealand forester, lawyer and former National Party MP Geoff Thompson. Source: The Southland Times
He talked to about 50 farmers at the recent meeting of Middle Districts Farm Forestry, discussing the Emissions Trading Scheme (ETS) and the Government’s position.
He said farm foresters had lost confidence in trees through the loss of income from ETS units.
Carbon credits (NZ units) had fallen from around NZ$20 to $3, as Treasury had accepted credits could come from overseas.
Countries such as Australia must have half their units from trees grown there, and in Europe it was 92% that must come from EU countries, said Thompson.
New Zealand should also follow Australia’s example and demand that half of all carbon credits came from here, he said.
“That would help stabilise the price, tighten the market, increase demand and there could be investment.”
As it was, there was no investment in trees or processing as people were not confident in the market. And he said there needed to be effective leadership in the forestry industry to help restore confidence.
“There is a question about where that’s going to come from. The Government has a serious role to pick that up again. It is our second biggest economic contributor.”
He said forestry played a major part in overseas earnings and made up NZ$4.5 billion per annum in logs and sawn timber exports.
“It has a huge amount of influence, but it seems to be bit taken for granted.”
Thompson said people had contracts in place with nurseries this year, but he was predicting next year there would be no planting.
“People got hit in the middle of this year with the change in the ETS and the value of units. NZUs, [New Zealand units] as earned by the carbon sequestered, are only $3 today.”
The number of units apportioned depends on the trees and how old a forest is.
“A mature forest should sequester around 800 tonnes of carbon per hectare, so at $20 it’s a lot of money. And that’s what carbon farming was all about.”
Thompson said New Zealand had been swamped by overseas units, over-supplying the market with carbon credits.
“We are one of the few countries that has no limits on overseas units. And we’re accepting them from Hungary, called RMUs, which no-one in the world will trade with,” he said.
Thompson said Treasury’s idea was that the globe did not care where carbon credits came from, and neither should the Government. But he said that attitude would result in few trees being planted and New Zealand not meeting its greenhouse gas requirements agreed to as the first part of Kyoto.
And he said there would be no behaviour change that people hoped would help alleviate global warming.
He said the Government’s retreat from significant greenhouse gas emission reduction had left forestry on the sidelines, without the benefits, but still the “cumbersome bureaucratic rules”.
“Post 1989, foresters were expecting extra income for carbon sequestered as an encouragement for more planting and carbonfarming projects.” Thompson said they had little to enthuse over.
The market value for units had fallen sharply. The Government was encouraging the importation of cheap European units.
The Government had not responded to the “fast forest fix” proposal that would sharply increase liability on harvest. And the New Zealand forestry industry was hoping for a levy on all wood, to enhance research and communication.
Thompson said a committee had been formed and was about to launch its website.
