Monday, February 12, 2007

Climate change: feral foresters

When the government proposed that farmers make a token contribution towards the cost of researching a solution to the emissions from their belching cows and overuse of fertiliser, they went feral. Why should they pay for their problem, rather than being able to dump the costs on the taxpayer? So they drove a tractor up Parliament steps, and (in the mind of the public, at least; actually, their industry bodies paid up), defeated the "fart tax". Now it looks as if the forest-owners are going to try the same thing: a widespread campaign against any move by the government to impose a deforestation charge.

Let's be clear: New Zealand is a party to the Kyoto Protocol, and thanks to Russia, it is now in force. This means that every tree cut down now costs us money - about $12,000 a hectare at current carbon price (and it could easily be twice that). It is both fair and appropriate that forest-owners - the people cutting down those trees - pay that cost, rather than it being borne by the taxpayer. What the forest-owners are effectively asking for here is a subsidy. And I see no reason why the rest of us should be subsidising their profits.


Forest owners are happy to accept the liabilities associates with the Kyoto Protocol, as long as they also receive the Kyoto credits associated with the Protocol. The Government has decided to steal forest owners' credits but then make them pay the liabilities. It has to be both or neither.

Posted by Anonymous : 2/12/2007 12:12:00 PM

Paying for ones own cause is a great idea. I hope the Socialists get this message and get off their arse, earn big dollars and then give it away to "their cause".
What are the chances?

Posted by Anonymous : 2/12/2007 12:14:00 PM

This may help you understand the issues a bit better:
Note, the Greens support what the forest owners are asking for.

Posted by Anonymous : 2/12/2007 12:17:00 PM

Anon: Forest owners are happy to accept the liabilities associates with the Kyoto Protocol, as long as they also receive the Kyoto credits associated with the Protocol.

And that's exactly what they are getting. The deforestation liability applies only to forests planted before 1990. Such forests attract a liability under the Protocol, but no credits. Post-1990 forests are explicitly excluded.

Its also worth noting that there is no benefit in full devolution, as every credit gained must be repaid on harvest. The only way forest owners could profit from this is by fraud - selling the credits and then dumping the liability on the taxpayer. And I don't see why the government should facilitate that sort of criminal enterprise.

Posted by Idiot/Savant : 2/12/2007 01:12:00 PM

Idiot - heard of use of money? The forestor would hold the credit for the 25 years while the trees were growing. They could sell the credit at the outset, use the money and then - if they decided to harvest but not replant - they would need to buy credits to cover that. They would be carrying some risk that the value of credits did not increase over time by more than they could earn from other investments, but that would be their problem. Of course, if the did replant they would never have to re-buy the credit so they could keep the money - for those forest owners there is no doubt the Government has stolen the credit from them.

Posted by Anonymous : 2/12/2007 01:40:00 PM

I/S, you're wrong about the fraud thing, AFAICT.

Govt. could hand out 12k$/h for forestry by holding the land use rights in trust in exchange. They could have all the marginal land in the country in trees at that, particularly on hills where it would help with flooding. Great use of the retirement fund.

The trust could cover management costs and insurance and balance out the books as the forests are cut. If owners ever want to use the land for something else, they buy the usage rights back at contemporary Kyoto rates.

No shell games possible. If everyone dumps marginal land into forestry, well, that's the whole point.

Posted by tussock : 2/12/2007 02:24:00 PM

Anon: Indeed I have. But you're mistaken about replanting meaning no liability under full devolution, unless you take a very long term view. Any actual scheme would work by annual payments of credits, with repayment of all stored carbon upon harvest, so forest owners would still have to repay. Replanting would restore the annual stream of credits, but would not allow them to avoid the liability. The only way you can make money is by not harvesting at all.

Forest owners who want to make money this way will be able to gain credits or cash under the PFSI or proposed afforestation grants scheme. But there will be no handout for business-as-usual clearcut forestry - and nor should there be.

Posted by Idiot/Savant : 2/12/2007 02:31:00 PM

Tussock: Yes. And the government's PFSI and proposed afforestation grant scheme use a similar method, of covenanting the land or contracting with the government (as opposed to a trust) to limit harvest, and making all benefits repayable on withdrawal from the scheme. The chief difference is that it does things on an individual basis, rather than establishing a larger front entity to group costs. And OTOH, there's no reason why forest owners can't set up such an entity themselves to collectively spread risks and costs. Of course, that would be socialism... :)

The KFOA though isn't interested in any such schemes - they're just squealing for a handout.

Posted by Idiot/Savant : 2/12/2007 02:52:00 PM

As an aside to this, I note that the article mentions that "the deforestation of New Zealand continues." Given the impact of cattle methane & shit has on our environment of our industrial farming practices, has anyone quantified how much of New Zealand is being converted to dairying, and determined what the corporate farming organisations doing most of this work should be charged?

Posted by Sanctuary : 2/12/2007 05:05:00 PM