KYOTO FORESTRY ASSOCIATION
Sunday 11 March 2007
For Immediate Release
Aucklanders Set to Lose $2.6 Billion from Carbon Credit Grab
Thousands of Aucklanders risk losing a big chunk of their retirement savings as a result of the Government's decision to
nationalise carbon credits legitimately owned by forest owners and forestry investors, the Kyoto Forestry Association
(KFA) said today. For Aucklanders alone, at least $2.6 billion and as much as $4 billion could be at risk, according to
The association released the calculation on the eve of the Government's Auckland consultation meeting at Mt Wellington's
Waipuna Hotel at 6.30 pm, Monday 12 March.
It is based on an evaluation of the profile of forestry investors indicating, conservatively, that approximately 30% of
those who invested in Kyoto-qualifying forestry in the 1990s were "mum-and-dad" investors from Auckland, and an estimate
that carbon credit values will reach between $13,000 and $20,000 per hectare during the life of a forest.
"The Government's confiscation of carbon credits is not a rural or provincial issue alone - it's an Auckland issue," KFA
spokesman Roger Dickie said today.
"Throughout the 1990s, thousands of Aucklanders and up to 50,000 New Zealanders in total put their retirement savings
into forestry, investing an average of $40,000 each in new forest planting.
"They expected a return both from the sale of wood products in the future but also from the carbon credits they would
earn from carbon sequestration, as promised by Government officials. By confiscating those carbon credits - likely to be
worth $14,000 over the next five years - the Government has stolen a big chunk of their retirement savings."
Mr Dickie said every Aucklander with an interest in the forestry sector needed to get along to the Waipuna Hotel on
Monday night to stand united with the more than 2,000 other New Zealanders who have attended MAF consultation meetings
over the last two weeks, to say no the Government's confiscation plans.
"A big message from Auckland could make the difference," he said.
Mr Dickie said political support for KFA was growing daily, with the National and ACT parties last week joining the
Green Party in agreeing that carbon sequestered by forestry investors since the Kyoto Protocol's 1990 baseline needed to
be financially recognised in order to reverse New Zealand's deforestation crisis.
He said the forestry industry was now seeking more detail from the Green, National and ACT parties, while urging the
Maori, United Future and New Zealand First parties to declare their hands. Ultimately, however, the objective is for
Labour to change its policy.
"We all have an environmental and economic interest in stopping deforestation," he said. "The problem is that the 50,000
New Zealanders who invested in the 1990s and early part of this decade on the Government's promise of carbon credits are
not going to invest again until the confiscation is reversed. In forestry, you need to survive up to ten elections
before seeing a return, so governments keeping their promises and protecting property rights are the main factors
driving investor confidence."
Mr Dickie said KFA continued to work closely with the rest of the forestry industry in urging all political parties to
endorse the six-point plan to get forest planting underway again, which was agreed last year by all key players in the
industry, including the New Zealand Forest Owners Association (NZFOA), the New Zealand Farm Forestry Association
(NZFFA), the Federation of Maori Authorities (FOMA) and KFA, after work with Government officials.
I. Introduction to Carbon Credits
Kyoto carbon credits are earned by those individuals and businesses that sequestered carbon by planting new forestry
since the Kyoto Protocol's baseline of 1 January 1990, and by those industries which have cut their carbon emissions
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 - both
because of the benefits predicted to arise both from the sale of wood products and from carbon credits earned from
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 and potentially many billions more.
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 is carrying out a consultation process on these and other ideas to address climate change. The deadline for
submissions is 30 March. Forest owners have asked for an extension to this deadline but Forestry Minister Jim Anderton
The confiscation of the credits, the proposed retrospective tax and Mr Anderton'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. II. The New Zealand Forestry Industry's Six-Point Plan
1. Remove the inequitable, retrospective 'deforestation cap'.
2. Allow land owners with Kyoto-qualifying forests (forests planted from 1990) - as well as those replanting
non-Kyoto forests after harvest - to financially benefit from the value of the carbon their forests remove from the
3. Introduce broad-based carbon charges, ensuring that all emitters of greenhouse gases face the same opportunity
4. Ensure that New Zealand's Kyoto policies have the best long-term outcomes for New Zealand, even if they don't
exactly mirror current Kyoto rules.
5. Develop a regime which puts a value on the environmental attributes of forestry, thereby encouraging investment
in the sector.
6. Act immediately.
III. New Zealand Forest Plantings 1990-2005