Carbon sequestration and emissions trading

Carbon sequestration is the process by which carbon dioxide is absorbed during photosynthesis, and is stored as carbon in biomass (trunks, branches, foliage, and roots). Gains in forest carbon stocks through growth and sequestration will reach a maximum level over time, and are eventually offset by carbon losses through harvesting, thinning, and natural decay.

To determine the total carbon sequestered in a forest at any given time (the forest carbon stocks) it is necessary to work out how much carbon is in:

  1. The above-ground live biomass, which includes the stem, branches, and leaves or needles.
  2.  The below-ground live biomass, which is the root system of the tree. Once the tree is harvested this usually decays slowly.
  3.  The coarse woody debris, which includes all larger woody material left on the forest floor after any pruning, thinning or harvesting operations. This coarse woody debris decays over time.
  4.  The fine litter, which is composed of decaying leaves or needles, and small branches and twigs. This usually increases slowly over time, until a balance between average annual litter inputs and decay is reached.

The forest estate is already a significant store of carbon and there is potential for this to grow further with farm and larger-scale plantings of both exotic and indigenous forest species.

World concern about global warning as a result of human activity has led to New Zealand signing the Kyoto Protocol. This commits New Zealand to reducing its net greenhouse emissions to 1990 levels by 2012. New Zealand has chosen to introduce an emissions trading scheme to manage its Kyoto commitments. The ETS essentially puts a price on the emission of greenhouse gases.

Because New Zealand's rapidly growing plantation forests are estimated to sequester (absorb) 25 million tonnes of CO 2 from the atmosphere each year, they have an important role to play in the country meeting its Kyoto commitments and forestry was the first sector to enter the Emissions Trading Scheme in January 2008.

Forest biomass consists of about 50 percent carbon and over time most of the change in forest carbon stocks comes from changes in the biomass of the four biomass ‘pools’ listed above. Changes in the amount of carbon stored in forest soils also occur over time, but these are small and difficult to measure at reasonable cost. Changes in forest soil carbon will not be required to be measured under the ETS.

The climate change policy for forestry is still evolving. Initially the government announced that it would retain all credits and liabilities associated with growing forests. Under pressure from forest growers the government reversed this decision and owners of post-1989 forests now have the option of assuming both carbon credits and liabilities. Issues still remain around the treatment of owners of pre-1990 forestry who face a significant liability for any deforestation that occurs. Deforestation is forest clearance, followed by a change to another land use (for example, to grazing). After deforestation, the deforested area is classified as non-forest land.

Post-1989 forest land is exotic or indigenous forest that is established after 31 December 1989 on land that was not forest land on 31 December 1989 (that is, was non-forest land on 31 December 1989)

Pre-1990 forest land is an area of forest land covered by predominantly exotic forest species that was established on or before 31 December 1989 and that remained forest land on 31 December 2007.

Forest land is defined as being at least 1 hectare (ha) with forest species that have (or are likely to have at maturity):

  • a crown cover of more than 30% on each hectare
  • a crown cover with an average width of at least 30 metres.

Forest species are trees capable of reaching five metres in height at maturity in the place they are growing.

All participants in the ETS will have three core obligations:

  1. Monitor the emissions they are responsible for
  2.  Report these each year to the Government
  3.  Surrender emissions units to cover their reported emissions.

The Government will issue a number of emissions units for forest carbon sinks (that meet the required criteria) and these may be held, or bought and sold (that is, traded), within New Zealand. The primary unit of trade in the ETS will be the New Zealand Unit (NZU). One NZU represents one tonne of carbon dioxide (CO2) either released to the atmosphere (emissions) or removed from the atmosphere (removals).

Some of the rules under the Land Use, land Use Change and Forestry (LULUCF) section of the Kyoto protocol that New Zealand has signed up to are illogical and have had a negative and disruptive impact on forest investment in New Zealand because the government has chosen to directly apply these same distortions through domestic policy.

The LULUCF sector deals with the changes in carbon stocks and emissions of greenhouse gases associated with the land based activities, including management of pre-1990 forests (Article 3.4) and Afforestation/Reforestation (new forests planted post-1990 under Article 3.3) – including Afforestation and Reforestation under the CDM; and Deforestation;

FOA is working hard to ensure that problems with the LULUCF rules are addressed both domestically and internationally. Improved rules can optimise the contribution forests and land use activities can make to addressing climate change, while maintaining environmental integrity and leading to other environmental co-benefits that will contribute to sustainable development.