A crash in the price of carbon credits could force landowners
who invested in new forests to sell their land, an analyst
The Government's permanent forest sink initiative allows
landowners who establish forests on previously unforested
land to earn credits for the carbon sequestered by their
But the price of New Zealand carbon units has dropped from
about $20 a tonne in the first year of the scheme to about $3
The forestry sector has called for limits to cheap offshore
carbon imports to help stop the falling prices, but the
Government has rejected that call in a bill that would amend
the Emissions Trading Scheme.
Now forestry analyst Ollie Belton, of Christchurch
consultancy Permanent Forests, is warning that up to a
quarter of people who invested in the scheme may have to sell
"If the carbon price remains low for another 24 months
without any sort of hope in the near future, then it would be
over for quite a few of those parties," he told Radio New
Some people had bought farms with mortgages on the basis that
the price of carbon was between $15 and $20, he said.
Mr Belton said landowners were encouraged into the permanent
forest sink initiative only to see it gutted by the
Government along with the Emissions Trading Scheme.
One farmer who entered half of his farm into the scheme for
50 years told Radio New Zealand it seemed like a good idea
two years ago.
He could sell the carbon credits for some $200,000 then, but
with the carbon price now under $3 a tonne, his profit this
year was only $30,000.
The farmer said he had little choice but to sell his farm
because he had a mortgage to service and no way to make up
for the drop in income.