Government ministers have deliberately played down the role of forestry in meeting emissions targets, documents released under the Official Information Act suggest. Diligent digging at No Right Turn has uncovered a Ministry of Agriculture & Forestry paper [PDF] titled New forest planting and harvesting intentions under high carbon prices, which makes clear that forest planting will increase significantly under a stable Emissions Trading Scheme, and that even a modest ($20/tonne) carbon price could trigger planting of up to 100,000 hectares a year — a rate not seen since the forestry boom of the 1990s, and enough to offset a huge chunk of NZ’s emissions to 2020 and beyond. Climate change minister Nick Smith did not mention these figures during the target consultation process, though it is clear he must have known about them. His failure to front with the facts on forestry amounts to a clear attempt to manipulate public perception of the difficulty of meeting steep targets, and raises serious questions about the agenda driving government policy.
The MAF paper uses well-established forestry modelling, and data from two independent studies (by the University of Canterbury’s School of Forestry, and Scion) to look at the implications for both planting and harvest intentions at carbon prices of $20 and $100/tonne. Here’s a key passage:
In the context of previous new planting rates, [returns] based on just $20 per tonne CO2 would theoretically be expected to drive new planting rates at close to their all time peak levels of 90,000 to 100,000 hectares per year, assuming no physical, planning or capital restraints…
If prices are higher, forestry returns become too high to be calculated by MAF’s model. The report also looks at what carbon prices imply for forest harvest intentions. MAF reckons that around $20/tonne, most forests in the ETS would be harvested at maturity, because the timber value more than compensates for the cost of buying carbon credits to cover the emissions cost of clear felling. At higher carbon prices, the picture changes: the cost of covering the harvest carbon is less than the timber value, but the value of the standing carbon in the forest is high. This has a significant impact on harvesting intentions.
This […] would have a dramatic effect on New Zealand’s overall net position between around 2018 and 2030 when the current models assume the existing post-1989 forests are harvested. High carbon prices (along with high levels of participation by foresters in the ETS) will likely mean the emissions “bulge” not only does not eventuate, but in fact becomes significant ongoing sequestration.
The so-called “wall of wood” has long been touted as a problem for NZ emissions policy — the target consultation pamphlet mentions it — but at high carbon prices it simply goes away. This is — or ought to have been — big news for future emissions targets.
Throughout the target setting process, Smith, Key and a Greek chorus of big emitters and business interests have been playing up how hard it will be to make emissions cuts and achieve challenging targets. They’ve been willing to misuse economic reports to concoct high “costs”, while at the same time sitting on information that undermines that stance. What has looked like incompetence in constructing policy now begins to look more like deliberate tactics, and begs the obvious question: in whose interest is the government acting?
According to Carbon News, talks between National and Labour on amendments to the current ETS legislation have run into difficulties because (amongst other things) the government has failed to provide full analyses of the cost of the changes being discussed. “Softening” the impact of the scheme on big emitters and agriculture has the effect of increasing the cost to taxpayers, as those sectors will in effect receive carbon subsidies. Meanwhile, foresters are pointing out that changes that have been floated, such as capping the carbon price at a low level (as intended in Australia), and banning export of carbon credits will bring forest planting to an abrupt halt.
It is now clear that New Zealand’s climate policy, initially derailed by Key’s craven coalition deal with Hide and the deniers in ACT, is being rebuilt to favour National’s supporters. By planning to increase the (already large) carbon cost cushion for big emitters and farmers, the government is not only increasing taxpayer subsidies to big business, but actively designing policy that will increase the country’s net emissions by suppressing forest planting. This goes far beyond simple incompetence, and strays into the realms of mendacity. I suppose it’s hardly surprising they don’t want the public to know the truth.