KFA spokesman Roger Dickie says according to Forestry Minister Jim Anderton's own calculations, the government has "stolen" $1.25 billion of carbon credits from foresters who have planted trees from 1990 to the present day.
"This is an environmental and economic catastrophe, with New Zealand experiencing deforestation for the first time in its modern history," Dickie says.
"The Kyoto Forestry Association reserves the right to spend 0.1% of the amount the government has stolen from us to highlight this issue - and to urge people who care about climate change, and the role forestry can play in mitigating it, to vote for one of the National, Green, Maori or ACT parties, which have supported us."
Dickie says if the government's proposed anti-free-speech legislation prevents the association from spending money on ads, it will consider proceeding regardless.
"It is intolerable that the government can steal property, and then try to prevent those it has been stolen from, from telling voters about it in election year.''
Carbon credits background from the KFA
Kyoto carbon credits are earned by those individuals and businesses that sequestered carbon by planting new forestry since the Kyoto Protocol's baseline of January 1 1990, and by those industries which have cut their carbon emissions since then.
Through the 1990s and early part of this decade, government officials made clear that forestry investors would gain financially from the credits, which are a clear property right, as confirmed by the Treasury. New Zealand Foreign Minister Phil Goff also told foreign governments that New Zealand forest owners would own the credits.
This fuelled a planting boom through the 1990s with 30,000 New Zealanders and forestry companies putting up as much as $400 million per annum of their own risk capital to invest in more than 600,000 hectares of new forest - both because of the benefits predicted to arise both from the sale of wood products and from carbon credits earned from carbon sequestration.
Since the government first indicated that it intended to "confiscate" the credits in 2002, tree planting in New Zealand has plunged and New Zealand is now experiencing net deforestation for the first time in living memory, the KFA says.
The government has previously indicated it would limit its confiscation of the credits to those associated with the First Commitment Period of the Kyoto Protocol, costing forest owners nationwide as much as $2.5 billion, or $1.25 billion according to the government's calculations, depending on the market value of carbon credits. Now, however, government officials are indicating it may extend the confiscation to the Second Commitment Period, putting eventual losses nationwide up to at least $8 billion.
The government is also proposing a retrospective tax of up to $13,000 per hectare on the owners of forests planted before January 1 1990, if those forest owners decide to convert their land to another land use.
MAF has carried out a consultation process on these and other ideas to address climate change. The deadline for submissions was 30 March and 3,500 were received. Other forest owners asked for an extension to this deadline but Forestry Minister Jim Anderton refused.
The association says the confiscation of the credits, the proposed retrospective tax and Anderton's handling of the forestry portfolio have received near-unanimous condemnation at the MAF consultation meetings, with forest owners even in his home town of Christchurch calling on him to resign.
The National, Green, Maori and ACT parties have broadly supported the forestry industry on the question of carbon credits.