Forestry to get Kyoto spinoff

By BRIAN FALLOW

The forestry industry expects to conclude an agreement soon that will give it Government cash, in recognition of forestry's role in enabling New Zealand to meet its obligations under the Kyoto Protocol.

Despite rising emissions of the greenhouse gases blamed for global warming, New Zealand expects to meet its obligation under the climate change treaty because of its expanding plantation forest estate.

This is because Kyoto's rules allow credits for the carbon dioxide which growing trees in new forests take out of the atmosphere.

But the industry is in a cyclical downturn and new plantings have shrunk dramatically.

A joint statement by the Government, the Forest Industries Council, the Forest Owners Association and the Farm Forestry Association yesterday said they expected to conclude within the next few months a "Forestry Industry Framework Agreement" that recognised the sector's contribution to climate change initiatives.

Forest Industries Council executive director Stephen Jacobi said the industry was seeking more money for roads, training and research and development on pests that could threaten forests.

It also proposes a jointly funded market development initiative.

"This would recognise that if we are to have a viable industry it would need new markets and better returns from existing markets."

The industry is also eyeing the subsidies payable in carbon credits (internationally tradable rights to emit greenhouse gases) the Government will offer for climate-friendly projects.

Projects to use wood waste and other byproducts of the forestry industry struggle to compete with other applicants, and some tilting of the playing field is sought.

It rankles with many in the industry that the Government, as they see it, nationalised the carbon credits arising from Kyoto forests, which are forests planted since 1990 on land that was not already forested.

The Government has assumed ownership of all the carbon credits from Kyoto forests and accepted responsibility for the liabilities which would arise on deforestation, but only up to a limit, which the industry believes is too low.

It is seeking further comfort that it will not be left with any Kyoto liability from deforestation.

"If we can reach agreement around these sorts of areas it would be a way of addressing this issue to the satisfaction of the industry," Jacobi said.

"The Government is now considering these proposals under budget and other processes and what they are signalling today is that this is a going concern."

Contradictory statements by Russian officials have renewed doubts about whether Russia will ratify the Kyoto Protocol.

But Jacobi said whether Kyoto falls over or not, climate change would still be a problem and forest sinks a vital part of the solution.