The planting of nearly 700,000ha of new exotic and indigenous forest plantations must start now for New Zealand to meet its international greenhouse gas reduction targets.
That was the message from Climate Change Minister James Shaw at the Carbon Forestry conference this week. He said 300,000ha needs to be permanent indigenous forest and 380,000ha in exotic.
His comments were in the context of concerns by the carbon forestry sector that uncertainty caused by reviews of the Emissions Trading Scheme (ETS) and other related changes threaten a collapse in planting intentions.
“Our intention is not to reduce forestry,” Shaw said.
“What we need to do is incentivise more forestry because we’re running out of time.”
Should NZ achieve its goal of carbon neutrality by 2050, international obligations mean emissions beyond that have to fall, hence the need for a mix of fast- and slow-sequestering forests.
Shaw justified reviews of the ETS as addressing concerns from officials that the price of carbon, based on NZ Units, could collapse due to excess forest credits becoming available from 2030.
Were that to have happened, he said, it would have become cheaper for emitters to buy NZ Units than reduce net emissions.
The carbon price collapsed to $34/t as the sector responded to the ETS review, but Shaw said some short term uncertainty was better than “kicking the can down the road”.
The price recovered to $67/t this week.
The minister was asked whether local authorities have the skill and ability to administer consent land use for forestry, to which Shaw replied that not all councils want to be involved in that role.
Keith Woodford, a land use consultant and Honorary Professor of Agri-Food Systems at Lincoln University, said when setting a carbon price, it is not ideal for the government to both play the game and set the rules.
A fundamental flaw of the ETS is that if the carbon price is too high it would make forestry so profitable it would threaten sheep and beef farmland.
At a carbon price of $67/t, Woodford calculated the gross return from a new forestry block at $1700/ha compared to “a few hundred dollars” a hectare from sheep and beef.
“However, there is now widespread acceptance that converting good export-earning pastoral land to forestry, be that for production or non-harvested forests, is not in the overall interest of NZ.”
Woodford said there is a new focus on pricing gross emissions rather than net emissions, which is not where the ETS currently operates.
This could lead to pricing carbon removal from the atmosphere at a different rate to the price of carbon emissions, something the Ministry for the Environment is working on but which he does not support.
Woodford said it raises issues about property rights and whether selling units offshore would be made illegal.
“I shudder at where that would lead.”
He estimates there are about a million hectares of land currently in pastoral that are uneconomic due to steepness, erodibility and location.
Much of it is also too far from the ports to profitably grow lumber, so the only options are long-lived species.
If 1 million hectares were planted between now and 2035, it would sequester 25 million tonnes of carbon a year through until 2080.
As a measure, NZ’s long-lived gases – carbon and nitrous oxide – stand at about 45 million tonnes a year – and this needs to decline to zero by 2050.