News and views

ForestX's Comment

Congratulations to the Government on the long awaited announcement on a move to “averaging” carbon when accounting for tree crop sequestration in the Emissions Trading Scheme. The early cashflow effect from this for landholders makes commercial forestry a much more attractive land use option. But, as the demand for carbon offsets increase, to possibly balance agricultural emissions, will future governments be brave enough to let the carbon market run its course? If the answer is yes, returns from carbon may come to outstrip the returns from logs. If this takes place the question becomes, how do we deal with the impacts on domestic log prices as supply drops? Shorter rotation cycles through technological change may be a possible solution. Or, maybe New Zealand needs a forestry development plan for this strategically important land use. Perhaps a Forestry Development Conference, as held in the past, would help.