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Forests contain more carbon for a given area than bare land. This extra carbon
comes from removing CO2 from the atmosphere, which in turn reduces human-induced
climate change. The Kyoto Protocol recognises this and allows emission units
(sometimes referred to as 'sink credits') to be generated when new (post-1990)
forests are established. The emission units generated are equal to the increase
in CO2 stored in a given area of forest between 2008 and 2012. This period is
referred to as the first commitment period.
By ratifying the Kyoto Protocol an opportunity has opened up for landowners,
particularly of largely marginal land, to re-establish permanent forests and
gain Kyoto emission units, assuming the Protocol comes into force.
In return, landowners will have to meet all costs associated with generating the
emission units and agree to 'replace' any units should the carbon stored in the
forest be released back into the atmosphere again.
These rights and obligations will be formalised in a contract between landowners
and the Crown. These contracts will be registered against land titles and will
bind all future landowners.
To enter the future forests programme, the land must be eligible to earn
emission units under [Article 3.3] of the Kyoto Protocol. Essentially, this
means the land must not have been covered in forest as at 31 December 1989.
"Forest" is defined under the Protocol. However, in areas of mixed scrub and
pasture the boundaries may not be clear and eligibility will have to be
determined on a case by case basis.
Mature indigenous forest is not covered by the future forests programme.
To qualify for emission units the new forest must be "direct human induced ……
through planting, seeding and/or the human-induced promotion of natural seed
sources." This means some form of active management will be required in
establishing the forest. However, this does not mean landowners would
necessarily have to plant or even fence the new forest area.
Landowners will need to consider what actions they plan to take to establish the
forest and agree this with the administrators of the future forests programme.
These actions will be set out in a simple management plan, which will help
assure the international community that the forests are indeed "direct human
Owners who meet the requirements will receive tradable, Kyoto Protocol compliant
emission units, which they will be free to sell to whomever they wish. The
amount of units received will be equal to the increased CO2 stored in the forest
for the period between 2008 and 2012 (the first commitment period of the Kyoto
Protocol). Units would not be transferred to landowners until after 2012,
following verification of the amount of increased CO2 stored in the forest.
The rules of the Protocol have only been negotiated internationally for the
first commitment period. However, landowners will have rights to emission units
beyond 2012 also, provided the future Protocol rules allow for this.
Yes, timber will be able to be removed. However, this will only be after 35
years and on a continuous canopy basis.
Earlier harvesting or clearfelling of the forest will not be permitted and will
incur penalty payments.
Continuous canopy management is an approach that aims to ensure the ground is
always covered by a canopy of tree species, even after some harvesting has
occurred. The volume of wood that could be removed while maintaining a
continuous canopy will depend on a number of factors, including the type of
forest being grown and specific site conditions. Officials are still working
through a simple and transparent formulation to apply this concept to the future
The Government has decided not to devolve sink credits to normal plantation
forests, at least for the first commitment period (2008 – 2012), as this would
have had wide ranging consequences for the forest industry and other primary
industries in New Zealand.
This future forests programme is clearly distinguished from such plantations by
allowing only limited timber harvest after a minimum period of 35 years.
Limiting timber harvest also limits the carbon liabilities arising to landowners
(and the Crown) when trees are harvested. This helps protect the interest of
both parties to the contract.
The future forests programme is principally designed to allow greater economic
benefit to be derived from land, especially marginal land. However, it will
deliver many other benefits, including improved biodiversity; soil, water and
flood protection; better protection of existing natural forest remnants;
diversification of forest timber species; development of a sustainable special
purpose timber supply; and funds for natural forest restoration.
Landowners will be required to meet all the costs of entering and administering
the future forests programme. This will include the costs of ongoing forest
monitoring and verification (probably once every five years) as well as
'replacing' units from any carbon that is lost from the forest where this
results in emission liabilities for New Zealand under the Kyoto Protocol.
Every emission unit generated under the future forests programme creates an
equal contingent liability which would crystallise if and when the carbon stored
in the forest is released back into the atmosphere. If this occurs, any such
liabilities will have to be covered by the landowner through 'replacing' units
equal to the amount of carbon lost.
Arrangements for 'replacing' units will need to be agreed as part of the future
forests programme contract. Options include landowners securing their own units
and transferring these to the Crown; landowners paying the Crown for the units
based on their current market price, or some combination of the two.
Landowners' rights and obligations will be specified under contract and
registered against land titles.
The contracts will be in perpetuity. However, they will be able to be changed
with the mutual consent of the Parties.
If the Kyoto Protocol no longer allows emission units to be generated from the
forest, then all harvesting restrictions will be removed – though, to the extent
that CO2 emission liabilities remain in respect of units already claimed; these
liabilities will need to be met by landowners if the CO2 is released into the
If the Kyoto Protocol does not come into force by 2008, the contracts will
Finally, landowners will be allowed to convert the forest into some other land
use at any time. The only restrictions on this will be that trees cut down will
not be able to be sold (except those removed in accordance with allowable
harvest provisions) and landowners must 'replace' emission units for any CO2
re-released back into the atmosphere.
What if the forest burns down or blows over?
Landowners will be required to 'replace' emission units for any CO2 released
back into the atmosphere for whatever reason.
The contracts will need to contain a way of assuring that landowners'
obligations (in particular, the obligation to 'replace' units if carbon is lost
from the forest) will be met in the event of default of payment. This could be
by commercial insurance, however, the future forests programme will also allow
landowners to come together to develop their own group cover as a way of
Landowners who deliberately breach the harvesting restrictions (that is
harvesting for sale outside of the allowable limits) will be required to
'replace' emission units for the CO2 released, plus make a penalty payment. The
penalty payments will be additional units calculated on the basis of an annual
compounding rate of 10 percent applied to each year's units received, commencing
from the earliest year in which the units were generated.
Penalties are only payable for deliberate breaches of the restrictions on
harvesting for sale and NOT for CO2 emitted for other reasons such as fire,
disease or windthrow.
The rights and obligations run with the land and will bind future owners.
The legal framework to register contracts against land titles needs to be
provided for in legislation and regulations. The necessary legislative backing
will be included in the Climate Change Response Amendment Bill 2004, due for
introduction into the House around the middle of this year. No contracts can be
signed or registered before this legal framework is established.
This will depend on the requirements specified by local District and Regional
The New Zealand Climate Change Office is developing a series of forest growth
and carbon accumulation models that will be applicable to many forest types
across the country. Some landowners may be able to use these models as the basis
for measuring carbon accumulation in their forests.
Other landowners may need or choose to measure carbon accumulation directly for
their particular forest or with a group of other owners of similar forests. This
too will be accommodated, though some guidance from officials administering the
future forests programme will be required.
Should the Kyoto Protocol no longer allow emission units to be generated from
these forests, then the harvesting restrictions will automatically be removed.
However, to the extent that CO2 emission liabilities remain in respect of units
already claimed; these liabilities will need to be met by landowners if the CO2
is released into the atmosphere at some future point.
If the Kyoto Protocol is not in force by 1 January 2008, the contracts will be
Yes, there are no restrictions on eligible species. In some areas local
authorities may impose their own restrictions or controls on the establishment
of certain species.
The future forests programme will be administered by the Ministry of Agriculture
and Forestry's Indigenous Forestry Unit, which has offices in Christchurch and
Apart from limiting the harvesting of timber for sale, no other restrictions
will apply to the use of the forest.
Rates relief is usually provided only where land has no commercial value. The
future forests programme will allow ongoing income to be generated from the
land. Should landowners wish to retire land completely they should discuss their
options with their local authorities.
This would be a private matter between the landowner and a third party purchaser
of the units.
Nothing in the registered contract will legally prevent landowners from forward
selling units at any time.
A number of markets are developing for the trading of emission units. It is
anticipated that companies or countries with obligations under the Kyoto
Protocol may be interested in purchasing emissions units. Third party traders
and speculators may also wish to purchase the units.
At this stage it is difficult to say what units are worth. Landowners should
seek their own advice on this issue.
Yes. Landcare Research, as part of its EBEX21 Programme, operates a mechanism
where landowners can reserve land in return for 'certified carbon credits',
though at this stage these credits can not be used by countries to meet their
obligations under the Kyoto Protocol.
In the first instance potential investors may wish to contact:
Indigenous Forestry Unit
Ministry of Agriculture and Forestry
PO Box 25022
138 Victoria Street
Tel: 03 379 1943
Fax: 03 379 1942
Note: The name 'future forests' contained in this media release is not related
to any other organisation/scheme with the same name.
The information contained in this publication is general initial information
only. The detail of this initiative is subject to further policy development and
to consideration by Parliament. This publication is not produced for the purpose
of giving professional advice of any nature. Whilst every effort has been made
to ensure the information in this document is accurate the Crown, its employees
and consultants do not accept any responsibility or liability whatsoever for any
error of fact, omission or opinion which may be present, however it may have
occurred, nor for the consequences of any decision based on the information in
Without in any way limiting the above statement, the Crown, its employees and
consultants expressly disclaim all and any liability to any person in respect of
anything, and the consequences of anything done or omitted to be done in
reliance, whether wholly or partly, upon the whole or any part of the contents
of this publication.