Govt forest proposals for ETS could cost NZ$64 billion
Friday 6 May 2022A NZ Government proposal to exclude permanent forests of exotic trees, such as pines, from the Emissions Trading Scheme (ETS) could cost the economy NZ$64 billion in the coming 15 years, a new report says.
The report, produced by economic consultants Infometrics for carbon-farming lobby group the Climate Forestry Association, has claimed the possible cost of allowing only permanent forests of native trees for carbon credits could amount to $870 per household, per year. "A ban would have significant implications for how New Zealand might meet its emissions reduction targets," the Infometrics report said.
The Government last month proposed excluding exotic trees from a new category for permanent forests due to enter the ETS in 2023, due to concern that – with carbon credit prices rising – the opening of a new forest category could lead to “large areas of land nationwide” being planted in pines.
"The problem is not caused by the species. It's not caused by exotic trees. It's caused by the lack of management requirements on these forests,” said Climate Forestry Association spokes-person Dr Sean Weaver. “I don't think they're fully taking account of the detrimental impacts of basically replacing one blunt instrument with another.”
The report modelled two scenarios for the years to 2035: the purchase of international carbon credits to replace the projected planting of exotic forests, and the planting of native forests to sequester the carbon that projected exotic forests would have. The purchasing of the international carbon credits required would amount to a cost of $870 per household, per year, the report said.
The required planting of native trees was “probably totally unrealistic” because it would require 3.6 times as much land as exotic trees. “It makes no economic sense to convert even marginal farmland to native forest when the same amount of emissions sequestration can be secured from exotic forest using less land,” the report said.
This scenario would cost the economy through the inefficient use of land, the report said. Ultimately, Infometrics said the policy change could take NZ$64b out of the economy in the coming 15 years.
Submissions on the Government’s proposal closed last week. Forestry Minister Stuart Nash, in a statement, said he expected “frank feedback on the proposals”.
Note: Sean Weaver, who runs carbon offsetting and forestry business Ekos, said the newly formed association, the Climate Forestry Association, was made up of about a dozen forestry companies, landowners, community groups, investors, and finance companies. Sean is one of many key presenters who’re lined up to present at this year’s major carbon forestry event, Carbon Forestry 2022 which runs on 9-10 August in Rotorua, New Zealand. Full programme information is available and registrations can be made directly on the event website.
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