Flexible Land Use Alliance

The Flexible Land Use Alliance has been formed to ensure New Zealand’s established pattern of flexible land use is continued by way of appropriate changes to the proposed Emissions Trading Scheme (ETS). Land use flexibility has been and always will be crucial to New Zealand’s economic wellbeing and to ensuring security in the global supply of food.
The Alliance accepts the international consensus that anthropogenic climate change must be addressed, and that New Zealand must reduce its net emissions of greenhouse gases by all means possible including increasing its total forest cover. It sees forestry, along with the development of new technologies to reduce greenhouse gas emissions in transport, electricity generation, manufacturing and agriculture, as being among the most important contribution New Zealand can make to the fight against climate change.
The question of what policy should be applied to commercial forests planted prior to 1 January 1990 is one New Zealand continues to struggle with. Current proposals call for the imposition of liabilities of at least $20,000* per hectare on those who harvest these forests but do not replant the land. This would freeze approximately 1.2 million hectares of land in forestry permanently, even if some of that land would deliver higher and better economic, environmental and social returns if used for another purpose.
Retrospectively freezing such a large area in forestry without adequate compensation would cause a collapse in the value of that land and would undermine investor confidence to plant the approximately 800,000 hectares of eroding hill country land that is not yet in forestry but for which forestry is likely to be the best use. Such a policy is, therefore, likely to see New Zealand’s total forest cover fall over time, contrary to the goals of fighting climate change, addressing erosion and preventing floods, and enhancing biodiversity and water quality.
The New Zealand Government is cognisant of these issues and has made clear that it has not finalised its policy for pre-1990 forests. It is seeking guidance from land users and its Climate Change Leadership Forum, among others.
The Flexible Land Use Alliance’s first preference is for pre-1990 forests to be excluded from the Emissions Trading Scheme. It believes it is unjust for Parliament to retrospectively impose liabilities on land owners as a result of decisions made between 18 and 90 years ago, when such liabilities could not have been envisaged. Moreover, the imposition of such liabilities on land and forests owned by Māori would be seen by Māori as a direct violation of Article Two of the Treaty of Waitangi. Policy needs to be developed in a way that is clearly consistent with the principles of the Treaty of Waitangi.
Notwithstanding our first preference, should it finally be determined, after Treaty of Waitangi issues are resolved, that pre-1990 forests shall be included in the Emissions Trading Scheme, the Flexible Land Use Alliance urges the Government to incorporate a Forestry Offset Scheme as part of the system. Under the Forestry Offset Scheme, the requirement to re-establish a pre-1990 forest with another forest that has the same sequestration ability could be met entirely by the land owner replanting that same land, as envisaged in current proposals, or by planting an equivalent area of land elsewhere in New Zealand. It would not provide full compensation for the loss of land value that would arise from imposing constraints on forest owners who currently enjoy the same land use flexibility as all other land owners, but it would encourage the planting of the 800,000 hectares of land that is currently not in forestry but for which forestry is likely to be the best land use. This would deliver economic, environmental and tax-revenue gains for New Zealand.
A Forestry Offset Scheme supports the intent of the Kyoto Protocol by maintaining and potentially increasing total forest cover. While it may not be consistent with the precise wording of the Protocol, which envisages replanting the exact same land, that wording is already subject to active review and has effect for only five years until further decisions are made. International convention also allows the New Zealand Government to give domestic effect to its international undertakings by any effective means. While negotiations are underway, it makes no sense to introduce environmentally and economically destructive policies in New Zealand based on current wording in the Kyoto Protocol that the New Zealand Government itself is working to change.
The Flexible Land Use Alliance recognises that, until international rules are refined, there could be potential fiscal issues for the New Zealand Government at the end of the First Commitment Period associated with the introduction of a Forestry Offset Scheme. It also recognises that the Government and Parliament will require a high degree of certainty that the domestic rules for any scheme are robust. On both these matters, it will work with officials, ministers and parliamentarians to develop a scheme that minimises risks to the Crown over the medium term. In considering fiscal risk, the likelihood of ongoing net deforestation under current proposals and the likelihood of enhanced economic activity and tax revenue under a flexible land use regime both need to be given appropriate weight. New Zealand’s Kyoto surplus of NZ$500 million has already turned into an estimated deficit of NZ$1 billion or more. It is important government and the primary sector work to get the details of policy right.