Tall trees

by Gareth on July 27, 2009

pine.gifSetting emissions targets means more than just making direct emissions cuts — it also means growing our carbon sinks. Climate change minister Nick Smith seems to want to ignore this, insisting (once more) in his interview with Kathryn Ryan this morning that because NZ’s emissions were now running 24% above 1990 levels, that a 40% target for 2020 would mean cutting emissions by 64%. That is, of course, nonsense, because it ignores the role played by our prolific forests. In a timely reminder of the carbon sink potential of forestry in NZ conditions, the Science Media Centre today released a paper by Associate Professor Euan Mason and senior lecturer Dr David Evison of the School of Forestry at the University of Canterbury. In their “Comment on forestry and climate change” [PDF here, available to HT readers by kind permission of the SMC] they say:

New forest planting is a very feasible and viable method to reduce New Zealand’s net emissions. New plantings will provide capacity for New Zealand to implement cost-effective reductions in industry and agricultural emissions, and possibly to develop new sequestration technologies.

They go on to look at ways of increasing the forestry sector’s contribution to emission mitigation (the very thing that Smith is ignoring):

With the right policy settings and with appropriate help for landowners, we could
markedly increase the GHG benefits of forestry by:

1. increasing the rate of new forest establishment;
2. increasing sequestration in existing forests; and
3. increasing the use of wood as a construction material

And here’s the kicker: they quote Piers MacLaren on the true potential of afforestation:

… if we consistently achieved a new planting rate of 50,000 ha/year, it would take the best part of a century before we established forest on all our eroding landscapes, and meanwhile we would have carbon credits to sell to others on the international market.

That’s the real challenge, the true potential that Smith and the government are missing. I can only speculate that the forestry industry doesn’t vote National.

In the meantime, I urge anyone who wants the facts about forest carbon sequestration in NZ and its potential for the future (as well as a good discussion of the policy challenges) to read this paper.

[CrowdedScouse]

{ 23 comments… read them below or add one }

R2D2 July 27, 2009 at 10:27 pm

Gareth, we could plant the whole country in forest but it would only be a temporary fix.

If we planted enough forests to meet a 2020 target, what happens after that? We plant more forests?

What about when our target is 60%? Even more?

samv July 29, 2009 at 10:32 am

If we planted enough forests to meet a 2020 target, what happens after that? We plant more forests?

We could, even if our target is 100%;

* Sequester them for a long time by using them as building materials as the article above says – increasing the use of timber products as a carbon store; the potential for this as a store being limited only by gross production rate over the average lifetime of the product. Gross production rates are effectively unlimited in an industrialised world given the right economic conditions; an increasing carbon price are those conditions met exactly. So, not just a “temporary fix”.
* Convert a fraction of it to charcoal and use it for topsoil production, which will have a cumulative sinking effect as more plants grow in the toilsoil, in previously less fertile soils,
* Even just store it CCS-style and grow more timber (if the carbon price is high enough)
* Crop it for biofuel production, no longer being a carbon sink but at least carbon neutral

It’s true that under the Kyoto rules as soon as forest is harvested it is considered instantly burned; but there’s nothing to say that such a crude approximation needs to continue with Copenhagen and beyond.

Gareth July 27, 2009 at 11:09 pm

Read the post again (and the paper it refers to). At 50,000 ha/annum, we could plant for 100 years and still only cover the land vulnerable to erosion. That’s a lot of standing carbon, a lot of emissions offset. It buys us time to reduce emissions — think low emissions intensity — and will be crucial on a global scale if we’re going to lower atmospheric CO2 to 350 ppm. Forests are a crucial part of any national or global solution, and to have a climate change minister who ignores them is a disaster.

R2D2 July 27, 2009 at 11:23 pm

Required a login.

So you are saying 5 million hectares of forest will only cover unprofitable land? I find that hard to believe, but I am open to being proven wrong. Can you post the quote?

There is of course another question, who owns that land now? If the owners plant the forests they will own the credits. A low target means less emissions units for the Govt to pass onto businesses, so the businesses will suffer regardless of if the target is met through forest planting or not.

And it may not be as simple as just asking the owners to become foresters. You cant just ask a plummer to become a mechanic, and you cant just ask a farmer to become a forester.

R2D2 July 27, 2009 at 11:25 pm

Sorry, strike unprofitable, replace with vulnerable to erosion

Gareth July 28, 2009 at 9:12 am

No login required if you follow the link in the post (the “PDF here” bit not clear enough??).

What Piers is saying (and he said it in his earlier guest post here as well), is that there’s more than enough marginal agricultural land that would be better off under forest to provide for a century of planting. However, if carbon prices ever got as high as Infometrics/NZIER propose in their most recent report (see Lions/donkeys), then farmers would be rushing to plant trees like there was no tomorrow. Forestry conversions would replace dairy conversions at a rapid pace, and carbon farming would be the biggest land-based industry.

R2D2 July 28, 2009 at 6:59 pm

Carbon farming? Gareth, I will say this slowly, there is no such thing as carbon farming. When you cut the trees down you lose the carbon. Net sequesteration in the long run is zero.

Gareth July 28, 2009 at 7:37 pm

R2, you need to do more reading. Putting a forest where there is not currently a forest and keeping it there will sequester carbon for the long term. Careful harvesting allows taking timber, while not reducing the carbon stock – the essence of the previous government’s PFSI (Permanent forest sink initiative). Kyoto rules treat forest carbon as released on harvest, but not all is. Wooden buildings represent a real long term carbon sink.

The essence of the situation is — as the authors of this paper point out, and I quote them above — that forestry effectively buys us time to get our economy on a true low emissions pathway. And cost-effectively, if only the current government would apply some semblance of intelligent thought to the issue.

R2D2 July 28, 2009 at 7:51 pm

Gareth, let me take a stab in the dark here, you are the type of person to promote ‘sustainable farming’ yes?

So if I was to dairy farm in such a way that my production peaked after 20 odd years and then progressively declined after that, would that be a sustainable farming practice? Would you invest in that business?

You may be surprised to know that farmers in this country are smart business men and women. They also want long term revenue streams. They are unlikely to invest in anything that will tie their land up for the long term for only short term revenue streams.

overseasfish July 28, 2009 at 8:41 pm

Being a smart business man or woman is not mutually exclusive with knowing that unproductive land on your farm can be used to turn a profit…. rather the opposite I would have said. Farm forestry is a growing industry, I think your farmer to forester comment is unjustified.

Besides R2, the long term storage of carbon in wood rather depends on what the wood is used for. If you burn it yes, but some wood gets turned into long life products. I am pretty sure the carbon stored in the wood which makes up my table is still there but will let you know when/if it suddenly vanishes.

Gareth July 29, 2009 at 11:31 am

R2: Please note that Canterbury dairy farmers are currently changing their management practices to lower cost methods. These produce less milk, but at lower cost, so while their overall income declines, their profitability is at least maintained.

Farming carbon, as Sam points out below, is not only feasible but financially attractive. It becomes even more so if you consider secondary forest products and the income stream they produce. Consider saffron milk cap mushrooms. A plantation of radiata could produce both carbon credits and $50/kg mushrooms, and if managed as a PFSI could provide long term profitability.

NZ’s foresters are just as smart as NZ’s farmers. Give them certainty, and they will provide the carbon sequestration.

R2D2 July 29, 2009 at 10:09 pm

overseasfish:
“Farm forestry is a growing industry”
Figure 7.1

http://www.maf.govt.nz/mafnet/rural-nz/statistics-and-forecasts/sonzaf/2009/09-wood-for-trees.pdf

(looks remarkably like the temperature graph!)

“Besides R2, the long term storage of carbon in wood rather depends on what the wood is used for. If you burn it yes, but some wood gets turned into long life products. I am pretty sure the carbon stored in the wood which makes up my table is still there but will let you know when/if it suddenly vanishes.”

You miss the point of the target. We are setting a target for UNFCCC negotiations. UNFCCC rules say that as soon as you cut a tree all the carbon is oxidised. So yes, in the eyes of the UN, it does vaporise instantly.

I actually think the rules are correct. A distinction should be made between ‘fossil’ carbon and biosphere carbon. Sequestering carbon in a tree for, lets say in your table for 1000 years, does not alleviate burning carbon that has been in the ground for 200 million years.

Macro July 27, 2009 at 11:11 pm

We would be converting less favourable farmland back into forest from which it came! And as a consequence R2 there would be less farm animals belching methane! And as you are well aware, agriculture represents now around 48% of our carbon emissions, so that would have reduced too. Of course we don’t know to what extent, but we don’t know until we try do we.

overseasfish July 28, 2009 at 1:04 pm

If we do start planting land vulnerable to erosion with the aim of both locking up carbon and protecting the land for eroision can we, for the love of all things holy and unholy, start planting something native? I know that radiata locks up carbon fast, but the optimal age for carbon storage for the species is 18 or so years, and there are significantly fewer biodiversity benefits when compared with, well, anything else.

Macro July 28, 2009 at 2:50 pm

The incentives to plant native are there! – about a factor of 8. The cost of harvesting has to be factored in as well, and steep land – more prone to erosion is not such a good option.

Whoops July 28, 2009 at 5:15 pm

Over the last 80 years of forest plantings, according to the MAF National Exotic Forest Description 2008, there have only been 9 years where planting rates have been at or above 50,000ha. There are no figures for native, as the rates a so small, 100’s of ha if you are lucky.

The average planting since 2000 has been 14,000ha, and dropping at a steady rate down to an estimated 1000ha in 2008.

The only program that has stimulated forest planting recently is the Afforestation Grant Scheme. For the Public Pool the average grant rate for round 1 was $1829/ha and round 2 was $2029/ha (the regional council rates were higher than the public pool). Therefore to plant 50,000ha per year under the lower round 1 rate AGS would require $91million. Can NZ afford this at the moment? Treasury has already cut the AGS from $10m per year to $7.5m.

The next issue is where would the land come from? Most farmers of erodible land that I have talked to still want to farm the land as the perception is that more land in pasture means more profitability.
What about crown land then – some have said that about 700,000 ha is available for planting on DOC land – the issue here is that DOC only want native species planted. Not that there is anything wrong with planting native species, is just that there is a huge hole in information on how to do this effectively and cost effectively to get to any where near $2000/ha for establishment.

There is a whole other issue about wood flow and the “wall of wood” that will place a big dent in out emissions profile if it is all harvested at once – which I don’t think it will, because there is insufficient investment in infrastructure and processing capacity.

A revision in sequestration rates for Native forestry (upwards) would help things quite a bit.

samv July 29, 2009 at 10:44 am

For the Public Pool the average grant rate for round 1 was $1829/ha and round 2 was $2029/ha (the regional council rates were higher than the public pool). Therefore to plant 50,000ha per year under the lower round 1 rate AGS would require $91million

You see there are these things called carbon credits, look them up. You grow trees and they sink carbon, you get credits which you can sell for money. Once your hectare of land has sunk 50T of COâ‚‚ at today’s prices of ~€25/T – for exotic species this might only take 5-10 years – you’ve just made back your investment cost. After that you’re looking at a roughly increasing return on investment until maturation. Getting back four times your money after 30 years would not be unexpected (~4.7% pa ROI). Once you get to maturation, see my post above for how to keep getting more.

Price on demand would predict that the carbon price will only go up as the “free” allocation of credits lowers to 80% of 1990 emissions by 2050 (assuming the G8 keep their word). This is probably why NZEIR would use a $100-$200/T carbon price in their reports we just made our lousy 15% 2020 target on. Of course competition and growth of the carbon credit industry will be a mitigating factor in the other direction, making a $200/T price unlikely IMHO. But in any case that 4.7% annual ROI will go up…

So where will the money come from? Smart investors. Which probably doesn’t include the National Government.

R2D2 July 29, 2009 at 10:17 pm

What good are units if you cant sell them? If I was an existing forester, and these new laws were coming in I’m going to think, OK I get credits while my trees grow, but I have to pay them back again when I harvest. Like you say unit prices could go up. I need to hedge against this risk as the reason I am in forestry is to sell logs. So I better not sell the credits, the government midas well just keep the things and save me the trouble.

“So where will the money come from? Smart investors. Which probably doesn’t include the National Government.”

Correct. It doesn’t include any government. I’ll invest my own money thanks. If you want to invest in ‘carbon farming’ do it with your own money and leave my tax dollars out of it.

Gareth July 30, 2009 at 9:52 am

the reason I am in forestry is to sell logs

Not necessarily. As I’ve commented elsewhere in this thread, forests have value when standing as long as there’s a price on carbon. Some foresters will operate a credit/harvest rotation, keeping some credits back to offset the harvest cost — selling credits when the market’s high, etc. Others will adopt the Permanent Forest Sink approach, taking a smaller timber harvest, and getting carbon credit income. At the point any particular stand matures, the owner will make a judgement about log value versus carbon credit cost and act accordingly.

Two things seem clear to me. First, the cost of carbon is essentially a one-way bet (over the long term). As the need for steep emissions cuts is recognised, more ambitious targets will be reflected in an increase in the price of carbon. Secondly, as forests around the world are increasingly earning good incomes from carbon credits there could be a reduction in the supply of timber, thus increasing the log price. Both factors combine to make forestry a very attractive long term investment — but only if this dim-wit government provides the business with some certainty, rather than ignoring it.

samv July 30, 2009 at 6:35 pm

Oh yeah, selling the logs. I guess if you’re making timber products you’re doing that, no? My ROI figures are therefore far too low; they should be added to any other ROI figures you might get from the product.

You’re right in a way – if the rules continue to misrepresent reality then any of the options I described which involved cropping the trees – regardless of the real CO2 sequestering achieved – will not be profitable.

All the more reason for NZ to negotiate that as our position. If we take that position, and make a plan which can be scientifically proven to help sequester carbon, my opinion is that the chances of getting tariffs on our products is quite low. My opinion is that this reasoned approach could help influence a change of rules in the negotiations, despite our small sizer. I also think that if the NZ government could push this on the grounds that it would great financial incentives to help businesses to be profitable.

You’ve already stated your difference in opinion, we can agree to differ in opinion now, thanks.

Gareth July 28, 2009 at 5:32 pm

Roger Dickie of the Kyoto Forestry Association has been in the media today (Herald story here), pointing out that watering down the ETS or capping the carbon price in the system is a good way to guarantee that no further tree planting takes place.

Plans to delay the entry of polluting sectors into the ETS and to exclude agriculture meant the forestry sector would have no one to sell carbon credits to domestically. “So, the domestic price for carbon will remain low, which will not encourage investors to plant new trees.” The Government was also expected to cap the carbon price which would prevent the international trading of New Zealand credits, Mr Dickie said.

A cynic (moi?) might suggest that this is why Smith is reluctant to talk forestry — he knows the sector’s going to be mightily pissed off by the ETS that’s coming, and so can’t count on new planting.
In any event, it’s no way to run the bloody country…

FlatFish July 28, 2009 at 8:04 pm

And while at it, why not replant our riparian margins, wetlands and shelter belts that have been blitzed to increase farm productivity. Putting plants back in the riparian margins and wetlands has been shown to significantly improve the health of harbours and provide critical fish breeding habitats.

An international example of this is the Whaingaroa Harbour Care http://www.harbourcare.co.nz in the Raglan Harbour catchment. An initiative that is presently being starved of funds even though it has effectively and efficiently planted over a million trees in the past decade and employed Task Force Green and Community Task Force people.

Doug Clover July 30, 2009 at 2:11 pm

I like the idea of combining carbon farming with improving NZ’s biodiversity. The idea of multiple use forestry has been largely ignored in NZ in favour of short rotation forestry (maximise the RoR). I think that the availability of carbon credits, which can provide a revenue stream during the time when wood production occurs, could assist in promoting the move to longer rotation and permanent forest cover forestry. Here is a link to a PCE report that covered these issues.

http://www.pce.parliament.nz/work_programme/reports_by_subject/all_reports/land_use/weaving_future_roles

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