Most, perhaps even all of the recent discussion around plantation forestry established for carbon farming has been focused on a foreseeable time horizon. Given the number of changes to laws around forestry over the last 50 years this approach is not surprising.
However, in the Gisborne/Tairāwhiti region there was launched in February 2017, the Tairāwhiti Economic Action Plan (TEAP) Operations Group tasked with identifying actions to address some of the key challenges in the Tairāwhiti region.
Latterly a “concerned community delegation” went to TEAP to seek more a close examination of what the widespread conversion of land into plantation forestry for carbon farming and the impact the ETS has in its current form may have upon it. To this end TEAP employed BDO Gisborne Ltd to conduct a comprehensive report to investigate short and long term ramifications to the region.
What makes this report unique is that:
• It focuses only on permanent carbon farming
• It is not commissioned by any particular industry
• It takes a regional/community focus
• It considers environmental and wellbeing outcomes as well as economic
• It looks at these issues from the perspective of generations 100 years from now”.
Any projections that look out 100 years is bound to be will astray from the reality that is occurring in that future. However, without making some attempt to foresee and mitigate some of the issues then the future could be a lot worse. The scope of the report focuses on three pillars:
Wellbeing
Wellbeing focuses on the people of the region and in particular employment opportunities and household incomes which directly impacts on the social, physical, and mental wellbeing of the people of Tairawhiti.
Environment
Environment focuses on the environmental and biodiversity outcomes from permanent carbon farming.
Economy
Economy focuses on the Gross Domestic Product for the region as well as returns for land or forest owners.
Where negative consequences are identified for the Tairawhiti region the report will where possible suggest responses and solutions at a local and national level.
This article does not intend to rehash the report in full but just highlight some points which may provide a taster to encourage those interested to go and read the full report.
Concerns raised in the report, some of which only relate to Tairāwhiti include the following.
With 83% of the grassland area in land level 6-8 there is no protection coming from government over the rate of land conversion with only land in level 1-5 likely to be regulated. The inference is obvious with this region bearing the brunt of widespread land conversion.
Permanent carbon farmers are quoted as saying that once the forest stops taking up additional carbon (and thereby the income stream stops) they will transition to native forest. The report identifies that to do this in any meaningful way will be very expensive and given carbon forest investors are generally driven by profit, this is unlikely to occur.
They also identify post 50 years of establishment (forest maturity) costs such as rates and insurance continue and future owners may not feel so enamoured to keep paying for these as liabilities build up. Given many investors are companies it makes it difficult to pursue individuals for outstanding debt. The Tiwai point waste products are a recent warning about the cost taxpayers and rate payers may end up having to wear.
The potential value of the land at this stage (post maturity) is minimal due to the costs of paying back ETS liability leaving little for any creditors (councils) to recoup. The reports authors do not believe planting in native trees is feasible from day 1 (under the current scheme) due to the high costs and slower establishment. In 50 plus years time if the ETS and other carbon emission reduction programmes have done their job the unit price is likely to have reduced (unless government intervene, again) providing even less incentive to plant native forests. If the carbon emissions haven’t reduced, then ‘we’ may have larger problems to discuss.
The losses of overall potential income to the region once the forests go ‘post maturity’ is identified as -$146 million from lost livestock income and -$173 million from lost forestry income (based upon 2019 values). These numbers presumably do not take into account the ‘multiplier effect’ which is often put at between 2x - 6x by the time the money does the rounds. They also highlight that the “plant and leave” approach (as done with carbon farming) does little to enhance longer term employment options leading to a “significant migration out of the district” and what jobs that are created with zero harvesting tend to come with lower pay rates than either farming or production forestry.
On the environmental front the report recognises permanent forestry would have a positive impact upon water quality. However surface water availability would decrease.
When it came to recommendations to central government there was a “unanimous desire” to have permanent carbon farming regulated.
The report provided the example, “A regulatory solution that would not impact production forestry or farming while capturing existing permanent exotic forests (forests not intended to be harvested) would be to require permanent exotic forest owners of greater than 50 hectares to get consent to keep exotic forests past normal production forestry age. For example, 35 years for Pinus radiata and 50 years for eucalyptus. Without such regulation huge plantings or retirement of areas in a permanent monoculture will continue as the lowest cost option to produce a carbon credit”.
They also believed an incentive scheme could work with the regulations would be to provide bio-diversity credits for native plantings within 30 metres of waterways. This could be funded by instigating a levy on the credits provided for permanent carbon forests.
While this report was done for the Gisborne/Tairāwhiti region, many perhaps all of the issues relate to other areas such as Whanganui, Central North Island, parts of the Wairarapa and Wellington regions to mention some. Given the rate farmland is going into permanent forests the government cannot afford to sit on its hands for too long.
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14 Comments
To invest in carbon farming you would need to have confidence in the government policies going forward , you only need to look at the current government proposed changes to contract law to see how fickle a government can be and how they can retrospectively change existing contracts on purely a political agenda. Investors would.need to have more confidence than I have in government to proceed with investing , however people have short memories I fear .
This is a part of the country where steep land grazing makes no sense on what are highly erodible soils. Forestry is environmentally and financially a far better land use, but considerable care is required in harvesting. Permanent forest should be the option where the harvesting risk is too great. I suspect the report underestimates the maintenance cost of permanent forest in pest and weed control and the managed reversion to preferably long-lived indigenous tree species.
I suspect the report also underestimates the benefits of mixed farm / forestry blocks, where the landowner plants gullies and steep areas while retaining the best land for farming.
How much planting is permanent ? The last sentence make a massive and incorrect assumption.
All overseas owner planting is timber and carbon(for 16 years only) = it has to be harvested so nothing there.
NZ Carbon farming and Dryland Carbon - the 2 NZ companies doing the permanent option are not on the East coast now - they cant compete so they are gone.
It is assumed that all new planting is permanent - its the exact opposite - probably overall in NZ its around 10% to 20% at the most.The vast majority of the planting I see on the Coast is Timber with carbon.
If you read the report timber forests produce as many jobs per ha, the jobs in the forest industry pay 50% more than the Ag industry and the contribution to local GDP is 300% higher from forestry than Ag. These are very uncomfortable facts for many but back up the PWC and other reports that have been done.
A simple economic analysis will show you that it only works on land that is not profitable for timber forestry - and if so ag as well most likely. Some are planting redwoods, cypress and Douglas fir - 50 to 100 year plus rotations are normal.
If you read the commentary post report Ngati Porou have many areas that are suited to permanent forest and aren't happy with the report - its their right to decide what species they want to use.
I don't disagree we need better controls on where any permanent radiata forest can go and how it is managed from an science based, environmental fact point of view but there is this mass hysteria that is not telling the truth.
IMHO planting a radiata forest simply based upon carbon income is a very high risk strategy. It maybe the best to do from an environmental point of view though. For landowners on very steep and hard country it has a role as an option that should be preserved.
If we look at Soil erosion, completely forgotten these days it seems, many land owners on some sites would be best to plant a large portion of their land in some form of tree cover, much permanent, to stop the millions of tonnes of soil we lose each year with it under exotic grass - it was always forest and should never have been cleared. I could show you some photos of East Coast farmland after rain events that would take your breath away and show how we are still one of the biggest environmental vandals in the world - Brazil could learn a thing or 2 from us!!
Beekeeping is quite a big employer in the region , and quite a lot of high umf Manuka plants were planted to provide bee food All post 1990 . They are also a great nurse plant for other natives. It would be good to see these included.
Natives each side of waterways should be a national requirement.
Any timber planting now has to legally have a minimum setback of 5m either side of a small waterway and on larger one 10m either side. Anyone with there head screwed on is doing that or more so that at harvest time there is very low risk of sediment/slash in waterways. Manuka is also considered a forest species so qualifies of carbon as native. in time it should move through a succession to bigger native species - good pest control is needed, which is where we should be spending a lot of money in our existing native forests as well to stop them being eaten alive by animal pests. Natural succession/regeneration is amazing if you let nature do its thing - we grossly underestimate its power. Pest control is key.
Thanks.20 metres would be better. Though it would be a bit hypocritical , with regional councils allowing the grazing of the riverside of stopbanks.Only one way that shit can go . yes , maintenance is key , with many waterways been the harbours of noxious weeds and pests due to no maintneance. To be fair , really hard to keep pests out of a river area. I am convinced technology is the only realistic way to beat pests , with cameras / drones able to identify and eliminate both plant and animal pests . Otherwise we dont have a hope in rugged terrain.
Re grazing of stopbanks. One place you do not want trees is in a flood plain. Otherwise the next flood will uproot them and deposit them against the next bridge or culvert. You need grasses or reeds that allow the water to rise and simply bend over leaving the soil intact. To maintain grasses you must graze them otherwise the vegetation goes woody. The "shit" is rapidly recycled nutrient beneficial to the health of the soil and ecosystem. In healthy soils it is completely assimilated in 21 days and so after that period there is nothing to wash away. Even if a flood comes within that time frame it is mainly partially digested vegetable fibre. Collected shit in a dairy effluent pond is a completely different element because it tends to go anaerobic.
It is abit of a turn around in thinking in the Hauraki, with the council previously blaming a oak tree growing on a stopbank for the Paeroa flood.and they will top or remove any tree upriver of the bridge, if they think it will hit it in a flood. But suitable trees will handle flood waters , no problems.
A warning in the report is that once the carbon farming revenue stream dries up, well short of the 100 year mark, local governments can kiss goodbye to rates from affected land areas.
And the Four Horsemen of Forest Apocalypse - fire, wind, pest and flood - are risks which grow over time and which cannot reasonably be controlled, just mitigated to some usually small extent.
Good article Guy. Their is a misconception out there (unhelpfully being peddled by forestry lobbyists and misinformed bureaucrats) that LUC Class 6 land is 'unproductive' or 'highly erodible' - this is completely fallacious. Class 6 is most of New Zealand's hill country farms and the vast majority of it is stable and highly productive farmland. Yes there are some areas of unstable soils on the East Coast, but they were largely already planted in pines after Bola. Far better policy settings are required from the government so that farmers are appropriately incentivised to turn small very steep areas on each farm into natives, rather than the current holus bolus conversion of complete farms into pine-trees which will be a disaster for the region in the long-run.
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