Carbon farming will alter land use

NEW Zealand’s emissions trading scheme gives this region opportunities to make money, and will change the way marginal land is used.

Carbon sequestering will change the way forests are managed and will make the establishment of unharvestable forests economically viable, two carbon farming experts told landowners, farmers and foresters at a carbon forestry workshop presented yesterday by the University of Canterbury and Ministry of Agriculture and Forestry.

Without the ETS, the most profitable form of forestry is from thinned, pruned trees. But once forest owners could also receive income for the CO2 their trees suck out of the atmosphere, it might become more profitable to grow more dense stands of forest, New Zealand School of Forestry associate professor Dr Bruce Manley told some of the region’s prospective carbon farmers.

This meant leaving them without being thinned or pruned to maximise the amount of dry matter held, which is typically 50 percent carbon by weight.

It also means farmers can retire their roughest country, get an income from it and focus their efforts on their best land better suited to sheep and beef.

They can sequester about 1000 tonnes of CO2 a hectare a year to off-set emissions from their farming operations.

“The way carbon is traded is a work in progress but it is a good time to understand what your options are – it’s not our role to tell you whether or not to participate.”

MAF estimates New Zealand’s eligible forests will generate about 101 million “New Zealand Units” of sequestered carbon if all are included, which exceeds our CO2 generation of around 71 million NZUs.

A recent survey suggests around 75 percent of eligible forest owners intend to join at this stage.

“New Zealand should easily be in surplus,” said Dr Manley.

There is a limit to the number of internationally-tradeable units available, which the Government hopes will keep the price of carbon stable.

Entering the ETS carried no risk at all, said Dr Manley.

“The risk comes when you sell carbon credits and have to manage cash flow because every last bit of carbon we get paid for now has to be paid back when trees are harvested — it amounts to an interest-free land and finances the establishment of forests.

“If forests are established gradually, there is much less risk also. Booms are no good for the industry.”

Recent changes to the assessment of the carbon-sequestering ability of native bush also made reverting land back to native bush far more attractive financially, said forestry management consultant Piers Macl aren.

MaF had proposed a new curve which had been accepted. Previously the assumed rate (net present value) was $474 a hectare a year at the Government’s carbon price of $25 a tonne.

With the new assessment regime, it almost tripled to $1292.

“So that makes it really worth considering. It’s not in the same league as radiata but it leaves a lot of other species for dead.”

The price on carbon made forestry very profitable, he said.

“Carbon farming has the potential to lift the income from a forest from an annualised amount of $4800 a hectare to between $12,000 and $16,000.

“Even in remote areas, or where land values might previously have been too high.

“It means farmers can plant the gullies at the back of their farms or across rivers where it might not be practical to log,” Mr Maclaren said.

“It will lead to more balanced land use.”

Ministry of Agriculture and Forestry advisers were available to visit groups of farmers interested in learning more about how they could participate in the ETS, said MAF senior programme adviser Bryan McKinlay.

Landowners have until March 31, 2013 to complete their registrations to earn carbon credits back-dated from 2008.

To join the ETS, landowners pay a registration fee of $550, then $100 to file a “carbon return”.

They must also provide proof their land was not in bush before 1990, which can normally be done using aerial photographs taken after Cyclone Bola.

“There is a lot of misinformation out there and, in this case, a little knowledge can be a dangerous thing.

“People can choose to wait until 2013 if they are risk-averse, but there will be a flood of applications as it gets closer to the deadline.”