Carbon trade tipped to boost economy and environmental benefits

Environment Waikato is looking at promoting forestry and carbon farming opportunities that will help grow a new green economy while delivering positive flow-on effects for the environment.

The policy committee today called for further investigations to help the council decide whether to develop a strategy to steer participation in the Emissions Trading Scheme (ETS) with an eye to supporting landowners, boosting the regional economy and achieving spin-off benefits for soil conservation, biodiversity and water quality.

Under the ETS, industries are required to buy carbon credits to offset greenhouse gas emissions. Carbon credits can also be traded for cash.

In a report to the committee, biosecurity and natural heritage group manager John Simmons said tree planting offered multiple benefits In addition to generating carbon income and helping New Zealand meet its international commitments to reducing greenhouse gases, trees also helped to protect water quality by reducing soil erosion and absorbing excess nutrients that might otherwise have leached into waterways.

Mr Simmons said the council could encourage landowners into the relatively new carbon trading market by providing greater certainty, while reducing risk and complexity.

“The first part of the proposal would be to provide a financial incentive to landowners to bring about land use changes on poor quality land,” he said Approximately 11 per cent of Waikato’s land area, or 144,000 hectares, is erosion-prone and has been identified as being suitable for establishment of forestry for multiple benefits.

The council could facilitate a consortium of investors to enter into joint ventures with landowners to develop 20,000 hectares of marginal pastoral hill country into plantation forest, with a further 15,000 hectares returned to native bush and trees. Preliminary estimates show the total investment would amount to approximately $36 million for forestry and $3 million for native tree restoration over 10 years.

“It is expected the carbon credit revenue over the initial 10-year period would amount to almost $10 million,” Mr Simmons said.

“This means farmers can retire their steepest, erosion-prone land, get an income from it and focus their efforts on their best land better suited to sheep and beef.

“Other areas of steep and inaccessible land could be left to revert permanently to native bush while still providing an annual income from the carbon credits over long time frames.”

A second objective would be to provide a means by which carbon credits could be aggregated into a regional pool to provide a buffer against price and harvest variations.

“This would allow landowners with relatively small pockets of land to pool their credits to create marketable parcels,” Mr Simmons said.

The pool would also allow Waikato industries, such as electricity generators, the dairy industry and the transport sector, to offset their greenhouse gas emissions by buying regional carbon credits.

While the committee expressed some reservations about aspects of the proposal, it agreed to progress the concept to the next step and asked staff to prepare a business case, costings and investment options.

ENDS

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