Farm Forestry New ZealandWhat is the future role of forestry for New Zealand climate targets?
Mathilde and Ollie Batelier-Belton, New Zealand Tree Grower August 2024.
The New Zealand Government is facing a conundrum with trees. On one hand, according to the Climate Change Commission but contested, it may have too much forest land in the Emissions Trading Scheme, creating a potential future surplus of New Zealand Units due to excessive sequestration and the number of units issued. On the other hand, it is falling short of meeting its international climate commitments through its Nationally Determined Contribution, the pledge we made in the Paris Agreement to be net zero by 2050.
The new government has taken quite a sharp turn in how to address the climate crisis and manage forestry within the Emissions Trading Scheme and its broader climate change strategy.This is summarised from the high number of climate pledges, actions and policies they have cut this year, as well as in their second Emissions Reduction Plan released in July 2024.This shows that the new government wants to reduce net greenhouse gas emissions rather than focus on reducing gross greenhouse gas emissions.
Polluters continue
In simple terms, that means polluters do not need to stop polluting as much as quickly.The plan is that the carbon emissions will be offset by more tree planting, some possible blue carbon known as ocean carbon, wetlands as well as carbon capture and storage.The latter is an expensive and unproved technology to remove carbon from the atmosphere which has never been used yet at any scale. Reconciling this paradox will be the main challenge for our country in the coming decade.
The current government is set on promoting afforestation outside the framework provided by the Emissions Trading Scheme. According to their latest reduction plan, the government has modelled future prices of units to peak at $75 in 2028, and remain around $50 until 2050.This is well off what the previous emissions reduction plans outlined, which forecast modelled units to cost $230 in 2050.This seems to be an even greater paradox, considering that this document has acknowledged that New Zealand will have 93 million tonnes of carbon dioxide over the threshold required to be net zero by 2050. It is because the new strategy does not lower greenhouse gas emissions steeply or as fast, limiting ability to register in the scheme.
Limiting forestry in the ETS
The government also wants to limit the number of forestry land registered in the Emissisons Trading Scheme by using Land Use Classes as a mechanism. This would be by banning forests from entering the Emissions Trading Scheme on Land Use Classes one to five, restricting the amount to 15,000 hectares per year on Land Use Class six, and making unlimited registration possible on Land Use Classes seven and eight.There would be an exception of up to 25 per cent of forests on farms. No details have yet been given.
They also want to promote afforestation outside the Emissions Trading Scheme, for example, by offering financial incentives for on-farm vegetation such as shelterbelts. It is not clear yet how this will be implemented, but it is clear that forestry, particularly plantation forestry, will be limited.
We welcome the latest government announcement on a stable market and the important role forests play in fighting climate change. However, we also believe that the decision to scale back gross emissions reductions is dangerous and irresponsible.
Forestry outside the Emissions Trading Scheme
Incentivising forestry outside the Emissions Trading Scheme could have benefits for both the climate and land owners. It can provide a stable market, where the unchanging price would allow land owners to be able to strategise and plan on how to afforest their land, at what pace, and have certainty on how much to sell their credits for. It would mean that we do suck up more carbon out of the atmosphere, avoid saturation of the Emissions Trading Scheme and the government could be the first purchaser of those units.
We support the idea if it is well-established and carefully implemented. However, this does not justify halting the reduction of gross emissions.We remain in a climate mess, a dangerous situation for us and future generations, and we need as many trees that we can plant and afford, combined with a stark reduction in gross carbon emissions. As we have said before, we cannot plant our way out of this mess.
Mathilde Batelier-Belton is a Director and General Manager at Carbon Forest Services. Ollie Batelier-Belton is the Managing Director of Carbon Forest Services.
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