Parker's boasting rings hollow
Wednesday 6 June 2007, 4:02PM
Climate Change Minister David ParkerÃ¢â‚¬â„¢s boast yesterday that foreign financiers plan to plant Ã¢â‚¬Å“up toÃ¢â‚¬Â 100,000 hectares of permanent forests at a cost of $275 million on the promise of carbon credits rings hollow given his GovernmentÃ¢â‚¬â„¢s confiscation of those same carbon credits from Kiwi Mums and Dads and the deforestation crisis that has ensued, the Kyoto Forestry Association (KFA) said today.
Ã¢â‚¬Å“The foreign financiers should check the fine print and this GovernmentÃ¢â‚¬â„¢s record in keeping their promises with respect to carbon credits,Ã¢â‚¬Â KFA spokesman Roger Dickie said today.
Ã¢â‚¬Å“Kiwi Mums and Dads and other forestry investors put up as much as $400 million per annum of their own risk capital to plant as much as 600,000 hectares of new forest through the 1990s.
Ã¢â‚¬Å“They did so because the Government promised them ownership of the carbon credits those new trees would earn.
Ã¢â‚¬Å“Then, in 2002, Mr ParkerÃ¢â‚¬â„¢s Government broke that promise and confiscated the carbon credits from those Kiwi investors.
Ã¢â‚¬Å“New Zealand investors donÃ¢â‚¬â„¢t trust this Government with respect to promises of carbon credits, which is why theyÃ¢â‚¬â„¢re not planting, and Credit Suisse and Sustainable Forest Management ought to be wary too.Ã¢â‚¬Â
Mr Dickie also said it was ironic for Mr Parker to be boasting about giving away carbon credits to foreign financiers when he had failed to recognise New ZealandersÃ¢â‚¬â„¢ property rights in those same carbon credits.
Ã¢â‚¬Å“Essentially, his Government has taken the credits off Kiwi Mums and Dads and wants to transfer them to foreign owners,Ã¢â‚¬Â he said. Ã¢â‚¬Å“IÃ¢â‚¬â„¢m not sure how that helps New Zealand meet our Kyoto targets and reduce our Kyoto deficit.Ã¢â‚¬Â
Introduction to Carbon Credits
Kyoto carbon credits are earned by those individuals and businesses that sequestered carbon by planting new forestry since the Kyoto ProtocolÃ¢â‚¬â„¢s baseline of 1 January 1990, and by those industries which have cut their carbon emissions since then.
Through the 1990s and early part of this decade, Government officials made clear that forestry investors would gain financially from the credits, which are a clear property right, as confirmed by the Treasury.
This fuelled a planting boom through the 1990s with 30,000 ordinary New Zealanders and forestry companies putting up as much as $400 million per annum of their own risk capital to invest in more than 600,000 hectares of new forest Ã¢â‚¬â€œ both because of the benefits predicted to arise both from the sale of wood products and from carbon credits earned from carbon sequestration.
Since the Government first indicated that it intended to confiscate the credits in 2002, tree planting in New Zealand has plunged and New Zealand is now experiencing net deforestation for the first time in living memory.
The Government has previously indicated it would limit its confiscation of the credits to those associated with the First Commitment Period of the Kyoto Protocol, costing forest owners nationwide as much as $2.5 billion. Now, however, Government officials are indicating it may extend the confiscation to the Second Commitment Period, putting eventual losses nationwide up to at least $8 billion.
The Government is also proposing a retrospective tax of up to $13,000 per hectare on the owners of forests planted before 1 January 1990, if those forest owners decide to convert their land to another land use.
MAF has carried out a consultation process on these and other ideas to address climate change. The deadline for submissions was 30 March and 3,500 were received. Other forest owners asked for an extension to this deadline but Forestry Minister Jim Anderton refused.
The confiscation of the credits, the proposed retrospective tax and Mr AndertonÃ¢â‚¬â„¢s handling of the forestry portfolio have received near-unanimous condemnation at the MAF consultation meetings, with forest owners even in his home town of Christchurch calling on him to resign.
More positively, the National, Green, Maori and ACT parties have broadly supported the forestry industry on the question of carbon credits.