Farming needs to come into the ETS

14 December 2015

Foresters say the Paris climate deal has cast a spotlight on New Zealand's poor tree replanting rate and the needs to fix it.  The deal struck last night in Paris involves 185 countries which have all pledged to reduce emissions over the course of this year.

New Zealand has given itself until 2030 to cut harmful emissions back to 30 per cent below 2005 levels. It also announced a $200 million contribution towards climate finance, particularly for Pacific Island countries, over the next four years.

Minister for Climate Change Issues Tim Groser hailed the Paris deal as a "huge and historic step forward".

"This is the first truly global agreement on climate change. All countries are committing to take ambitious action," he said.

But Brian Stanley, president of the Wood Council which represents contractors, millers and wood manufacturers, said New Zealand's poor replanting rate of radiata trees after harvest was not going to get better without a serious revamp of carbon credits.

He said that when forestry was pulled into the previous climate agreement, the Kyoto protocol, foresters had an incentive to plant because other polluters were offsetting their emission by buying carbon credits. At that time the price for carbon credits was considered economically viable, at around $20 to $22. But then cheaper overseas carbon credits were allowed to enter the country, eroding the value of the New Zealand units to just a few dollars each.

"So foresters said, what's the point of growing trees because there's no real economic return for us," Stanley said.

However, he said a bigger issue was probably the exclusion of agriculture. Forestry land that was not replanted was converted in many cases to agriculture, which was exempt from the climate change protocol.

"It's artificially pushing up the price of land and so land is becoming so expensive a forester can't buy it anymore and put trees on it and make an economic returns."

"So until you have an ETS [emissions trading] scheme that brought agriculture into it so everyone is on a level playing field, and New Zealand units are allowed to be marketed in New Zealand without interference from cheap units from overseas, you probably won't see a lot of additional tree planting going on."

Stanley said that if replanting was able to flourish, the wood industry would be helped "immensely". Pulp and paper mills in this country were getting old and could be economically replaced by much bigger, energy-neutral mills with million-tonne outputs.

But that required an investment of around $1 billion, "and at that point, you need more trees." Stanley estimated New Zealand carbon credits had to be around $15 a unit for forests to be economic.

Source: Stuff story by Catherine Harris. To read the full story >>