3 Dec 2009

Leave carbon price to market - forestry owners

3:33 pm on 3 December 2009

A forestry industry group is wary of a Green Party proposal that the Government should underwrite a carbon price.

In its new forestry plan released on Wednesday, the party says the government should guarantee a carbon price of $25 a tonne in order to give the industry and its investors more certainty.

Co-leader Russel Norman says the proposal - requiring the planting of 665,000 hectares of new forests on non-conservation Crown land - would create thousands of jobs while reducing the country's carbon footprint.

It follows a stimulus package put forward by the Greens earlier this year as a response to the global financial crisis.

But Forest Owners' Association president Peter Berg says the move would encourage too much interference from the government and his group would not welcome it.

"If you are going to underwrite prices," he says, "then of course the corollary of that almost certainly is that government would also want to cap prices.

"We've taken the view that the market will set the price and that that provides the best possible incentive for people to change their habits."

Mr Berg says the proposal also lacks information about how it might affect the wood-processing industry.