Horizons My View.

Of interest to me in recent times was a presentation to the catchment operations committee, by a Mr Pratt, Handfords and Associates Ltd,Forestry Consultants.

I was concerned by some of the assertions made by  this gentleman.Such as the value of Carbon,which is traded in Euro $ [E],since the collapse of the US$ in 2007. Mr Pratt claimed that the price of Carbon has been trading, until recently, at E $30 or if traded in NZ$ would have put the value @$50/ton.

Although he did show Treasury figures which put the value of Carbon on the NZ market @$20/ton should it exist.

My information sourced through the Sustainable Farming Fund site some time ago before a pass word was required,put the value of carbon that week ,the 13th July @$20/ton NZ. The Euro price @ E 9.40,with carbon being valued once a year in August.This August I would expect a fall, due to the the economic recession sweeping the world.Lets wait and see.

Even back in September 2008 the Euro was trading at 1.45 to the $USD and  NZ$ at .65 cents to the $USD, and Mr Pratts value on the International Market of  E $30/ton, values carbon @$67/ton NZ and no commentator to my knowledge has ever claimed that.I make it $20.90 $NZ to be exact,trading to a high of $24 NZ in March 2009, the Euro at E 1.26c to the $USD and the $NZD at .49c to the $USD.

The point I am making is carbon is just another commodity with the luxury of a fixed value, by whom? Which is both positively and negatively effected by currency movements world wide.

Mr Pratt did impart some good information. Such as expect 47.6 tons of carbon to be sequested/hec/ann at 650 stems[pine] to the hec at say $20/ton, equates to $950/hec on average over 30 years. Of course getting through years 1-5 will be a bit of a struggle,sequestering 165kg/hec/ann.[pine] Then you have the valuation and revaluation costs on top,which are not as simple as looking in the front gate. A positive is that you can claim to year 50 with regard to exotic timber. Indigenous ,well that is another story, and Mr Pratt did not cover that. Mr Pratt stated that at harvest you were not laible for more than you claimed, stating that the stumps and slash left behind covered the additional liability?This was at odds withmy information and when I put it to Mr Pratt, that for the Carbon Market to work with regard to sequestation, the value of carbon must surely fall, as nobody would be keen on having to pay more for units  than they claimed. He appeared to contradict himself, and admit that you time your harvesting programme to catch I presume,”currency cycles”. So as to manage your liabilities.


All I concluded from this presentation is that it is all a bit unclear,that the carbon credits are only a loan if harvesting for timber production.You have to wait quite a while to collect that loan,9 to 10 yrs and it has to be paid back one way or another.

On the other hand the Trees could stay there indefinitly,and you are able to claim to yr 50, walk away or hope that the indigenous regenerating  under story has matured enough to be claimable.Please do not forget what goes up comes down and there are severe penalties should a hec or 10 go down the creek.

To my mind what every body needs to be aware of,is Global Warming really happening?  Will the Kyoto Protocol be around in 50 yrs time?

This last statement really concerns me, for if Carbon is to be truly the next wonder comodity for the NZ economy, why hide behind Passwords? Why have secrecy? Why does Land Use have to be potentially regulated to bring about Land Use Change to Carbon Farming.If Land Use has to be potentially regulated to bring about the above, all that tells me is that Carbon is unlikely to satisfy our health, wealth and social needs.I will exclude cultural because it has become apparent that some people in Maoridom seem  to want to go back to the old days, old ways,how it used to be.

For make no mistake Farmers would be quick to change the use of land if the Market dictated in a open and transparent manner that Carbon was the most profitable land use.

What concerns me is that Pasture also sequests Carbon.Lets say that the average Hill Country Farm sequests 12000kg Carbon/hec/ann or a top Dairy Farm 22000kg/hec/ann Carbon, that is $240 and $440/hec/ann respectively.Why is pasture not included? After all we all have to eat. And the Kyoto Protocol does place emphasis on the production of food.

What, through regulation of Land Use Activity to bring about Land Use Change to Carbon Farming, is to become of all the People agriculture as we know it employs? What will it mean for our Rural Towns, the investment in homes and businesses these people have made?

In conclusion my thoughts are. If you believe Global Warming is a reality  and the Kyoto Protocol is going to go the distance.That you can afford to, and recognise the liabilities should a considerable amount go down the gurgler. And you believe it is a secure retirement fund , go for it.

Or if you are like me, I would start asking even demanding answers of our Politicans. What is going on?  Where is all this Kyoto Protocol Bussiness, Land Use Change and, yes, Treaty Settlements taking us?

Recently the International Monatry Fund down graded New Zealands credit rating. All is not well in NZ. The big 4 Australian Banks are charging every NZer who burrows money from them a risk premium. Why is this?

All the while our productive base, Agriculture is being progressively eroded, I believe deliberately so.