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Foresters say the government's revised emissions trading scheme (ETS) could give investors increased confidence in "carbon farming".
But NZ Forest Owners' Association chief executive David Rhodes says foresters hope the government can still achieve a "grand coalition" with the Labour party.
"We...are hopeful that a grand coalition on ETS policy can be achieved," he says. "Policy certainty is essential for a long-term investment like forestry".
Other policy changes were still needed to make carbon forestry an attractive proposition, he says.
A carbon price and yield-averaging scheme could give a landowner a regular income during the life of a forest on the condition that the forest was replanted at harvest.
This would be very attractive to owners of smaller blocks suitable for carbon forestry.
Rhodes says that, overall, little had changed for forestry, and that owners would continue to have a credible carbon price signal through trading their credits on international carbon markets.
Using taxpayer subsidies to cushion households and energy-intensive industries - including wood processors - on the basis that it is in the national interest, was more appropriate than asking forest-owners to pay through a capped price on credits.
There could be benefits from ultimately linking with Australia, "but not everything that Australia proposes is clever for us", Rhodes says.
"With New Zealand policy lining up with ETS developments elsewhere in the world it may be more appropriate for Australia to harmonise with us," Rhodes says.
The taxpayer will have to wear the cost of a greater level of protection proposed for emitters in the new scheme, but the important thing was that a price signal would established to start driving appropriate changes in the economy.
Agriculture had been given the greatest level of protection with its entry deferred by a further two years.
Rhodes says owners of pre-1990 forests will still only get limited compensation for not being able to convert their land to a more productive use without paying a substantial deforestation tax.
"To further assist pre-1990 forest owners, the government and industry have been doing their best to get support in the current Kyoto negotiations for offsetting - replanting - elsewhere following harvest," he says.
But this was an issue that is unique to New Zealand and it might be an uphill struggle getting it accepted, he says.
"As time goes by, our pre-Kyoto forests will become more and more of an anomaly. Not only can they not earn carbon credits, but their carbon liability is permanent and the logs they are reliant on for income will increasingly have to compete for markets with logs grown for carbon," he says.
"Investors with stranded assets such as pre-1990 forests should be properly compensated both because of the need to be fair, as well as to protect New Zealand's reputation as a safe place to invest," Rhodes says.
