When trying to get a handle on the economics of carbon, it is often best to think of the world as holding a carbon “credit card”, upon which carbon emissions are charged. As with the real thing, if emissions are released into the atmosphere (spent), then a way has to be found to pay them back.
At present there is a lot of carbon credit card debt in the world, and the aim is to try to pay that off by removing carbon from the atmosphere. Technologies are being developed to help pay this back, but at present and particularly for New Zealand the most effective way to make some early payments on that credit card is by absorbing the carbon with more trees.
In NZ that storage comes in three key forms – by establishing trees on previously non-forested land (afforestation), by protecting old native trees in forested areas, or by enabling more trees to grow and store more carbon on land already forested.
Traditionally NZ has favoured the first option, afforestation.
Taking what is often literally a “green fields” site and turning it into trees is easily defined, and relatively easy to measure.
But for trees to provide a means of sound sequestration they must tick four boxes:
• The carbon they capture must quantifiable. In NZ’s case this is usually using “look-up tables” to determine carbon captured by specific tree type per annum.
• They must offer permanence, that is, deliver a long-term means of mitigating carbon by absorbing, and keeping it stored, over time. This is why farmers do not receive credits for growing grass – it is not permanently gaining in mass and carbon accumulation, but eaten by animals.
• Thirdly, they must avoid “leakage” – not cause increased emissions beyond the area they are planted in.
For example, in South America some payments made to landowners to not cut down trees have only led to those payments being used to fund tree felling outside the project area.
• The final and most complex box to tick is that tree planting must follow the principle of “additionality”.
Additionality at its simplest is acknowledging improvements in carbon stored in vegetation that are over and above what would have happened had that vegetation been left as it had always been.
Not the simplest concept to grasp, with a title likely to make many farmers’ eyes glaze over, additionality is nevertheless critical for drystock farmers in particular.
Their options to reduce carbon emissions are relatively limited. Many have been intensely engaged in planting new vegetation areas or improving the areas they already have through pest control and fencing – that is, improving forested areas above what they would have been under normal circumstances.
Those actions taken on many farms go beyond the singular, “carbon only” focus that NZ’s existing Emissions Trading Scheme (ETS) forest-based mitigation efforts revolve around.
A key reason for the pastoral sector wanting to avoid being measured in the ETS was the scheme’s failure to recognise the differences between carbon dioxide and methane to global warming (split gases), and its inability to allow for varying vegetation types that sequester carbon on farm.
There is also a strong biodiversity argument that the ETS is not capable of accounting for.
The ideal is to recognise improvements made to on-farm vegetation that not only sequester more carbon but also improve water quality and boost biodiversity.
These are ultimately ecological services that could be incorporated into future iterations of He Waka Eke Noa (HWEN) credit valuations.
Farmers attending HWEN meetings would have noted how they were to be awarded sequestration credits for work done on vegetation areas both before and after 1990. But the passage of time and poorer aerial imagery in 1990 makes determining deliberate improvements to blocks of suitable vegetation a tough job.
Since then, 2008 has been set as an alternative base year. Thanks to better satellite imagery and detail, any improvements that come over and above “business as usual” can be better counted.
Arguably the carbon-focused ETS scheme also fails to acknowledge the human element of NZ’s rural landscape.
Left to its own market-driven devices, the scheme would result in wholesale planting of trees, and the complete replacement of emitting livestock on significant areas of country with plantation forestry.
For most New Zealanders this would not be socially or economically acceptable.