Forests, whether of native or introduced species, whether in public or private ownership, whether large or small, and regardless of the management objectives of the owner, are long-term investments which may extend into hundreds of years. They also provide society with more environmental, economic, cultural and social benefits than other forms of land use. But many of those benefits accrue to society as a whole, rather than just the forest owners. Many countries have national forest policies that provide a stable and long-term framework within which shorter-term, related policy, legislative and regulatory changes can be applied. New Zealand does not have a national forest policy. The introduction of one, would help protect and enhance both the owners’ and society’s benefits.

Ecosystem services are the benefits people obtain from ecosystems. These include provisioning services such as food, water, timber, and fibre; regulating services that affect climate, floods, disease, wastes, and water quality; cultural services that provide recreational, aesthetic, and spiritual benefits; and supporting services such as soil formation, photosynthesis, and nutrient cycling.  The human species, while buffered against environmental changes by culture and technology, is fundamentally dependent on the flow of ecosystem services.

Forests, more than other land uses, provide society with significant public benefits
in addition to those that accrue to the owner of the forest.

Public benefits include carbon sequestration and storage, erosion and flood mitigation, maintenance of water quality, biodiversity, recreation, landscape, spiritual and cultural factors and more.  Owner benefits may include the sale of timber and non-wood products, fees for hunting, placement of beehives, or recreation, payments for the services provided to society (such as carbon credits) and lifestyle choices.  The objectives of the owner may range from a commercial approach to maximise the rate of return received from the investment through to preserving biodiversity and other benefits for the community.

Most resource management decisions are most strongly influenced by ecosystem services entering markets; as a result, the non-marketed benefits are often lost or degraded. These non-marketed benefits are often high and sometimes more valuable than the marketed ones.

For example, one of the most comprehensive studies to date, which examined the marketed and non-marketed economic values associated with forests in eight Mediterranean countries, found that timber and fuelwood generally accounted for less than a third of the total economic value of forests in each country.  Values associated with non-wood forest products, recreation, hunting, watershed protection, carbon sequestration, and passive use (values independent of direct uses) accounted for between 25% and 96% of the total economic value of the forests.

Where forests are publicly owned (for example by central or local government), the costs of ownership are offset by the public good benefits that are provided by the forests and enjoyed by society.  Policy and regulations will generally recognise the benefits of publicly owned forests.  In New Zealand, there is significant public ownership of predominantly indigenous forests, such as National Parks and other forests managed by the Department of Conservation (DoC).  These are subject to their own legislation and policies that recognise the trade-off between the costs of protection and management and the public benefits provided.

Private forest owners, including Māori owners, have choices around continuing or expanding their forests or of changing to alternative land uses or investments.

Frequent and uncoordinated changes in policy and legislation can lead to reduced investment, removal of forest and changes in land use to those that appear less affected by the regulators.

The actual and perceived short-term risks of forest investment divert funds into other activities.  This then reduces the benefits that New Zealand, as a nation, derives from the country’s forests, whatever their tenure.

Forests, as a rule, are a longer-term investment than most land uses.  This means they require long term policy stability if the owner’s investment objectives are to be achieved (whether the ownership is public or private).  This can range from (relatively) short-term commercial forests managed for timber taking 25-30 years to reach maturity up to many hundreds of years in the case of New Zealand’s indigenous forests, including those which are newly planted.

The degradation of ecosystem services represents loss of a capital asset.  Both renewable resources such as ecosystem services and non-renewable resources such as mineral deposits, some soil nutrients, and fossil fuels are capital assets. Yet traditional national accounts do not include measures of resource depletion or of the degradation of these resources. As a result, a country could cut its forests and deplete its fisheries, and this would show only as a positive gain in GDP (a measure of current economic well-being) without registering the corresponding decline in assets (wealth) that is the more appropriate measure of future economic well being. Moreover, many ecosystem services (such as fresh water in aquifers and the use of the atmosphere as a sink for pollutants) are available freely to those who use them, and so again their degradation is not reflected in standard economic measures.

The combination of the national benefit that a country receives from its forests, together with the longevity of forests is what leads many countries to have a national forest policy.  Such policies are broad in nature and set out objectives for management of the country’s forests.  They cover all types of forest (commercial, non-commercial and conservation), all forest species (indigenous and introduced), all land tenures (publicly and privately owned), and may extend to reserves, urban forests and street trees.  A national forest policy is a long-term (50 years plus) document that provides guidance for regulations, legislation and other decisions that impact on forests.  They are focussed on protecting and enhancing the economic, environmental, social and cultural benefits that forests deliver to the nation and they provide security against short-term and frequent policy changes that concern private individuals and entities investing, or considering investing, in forests.

A national forest policy would need to incorporate the true value of forests and the loss of value if they were degraded or removed, so it could be reflected in national accounts.

This would help develop strategies for different categories of forest (such as native forest, plantation forest of either native or introduced species, for the establishment or removal of forests and the impact on asset value of policies directed at single issues (such as climate change, erosion mitigation, biodiversity, biosecurity, recreation, etc.).  Changes in asset value could be monitored as part of reviewing medium term strategy plans.  This will be important also for monitoring the state of the nation’s forests.  We know, for example, that climate change will impact on forests as it gets more severe, but are we monitoring this so we can identify problems and change strategies over time?

Both economic growth and population growth lead to increased consumption of ecosystem services, although the harmful environmental impacts of any particular level of consumption depend on the efficiency of the technologies used to produce the service. Too often, actions to slow ecosystem degradation do not address these indirect drivers. For example, forest management is influenced more strongly by actions outside the forest sector, such as trade policies and institutions, macroeconomic policies, and policies in other sectors such as agriculture, infrastructure, energy, and mining, than by those within it.

Unfortunately, New Zealand does not have a national forest policy.

In recent decades New Zealand’s forests have been subjected to uncoordinated, issues-driven, short-term policies relating to matters as diverse as land use, water and erosion issues, climate change, pest control, biosecurity, biodiversity, landscapes, building regulations, trade policy and long-term research.

As a result, the full potential of New Zealand’s forests is not being achieved,
either for the private owner or for society as a whole.

A comprehensive and long-term national forest policy provides a framework under which legislation and regulation along with medium-term strategies (5-10 years) and short-term operational programmes (less than 5 years) can be developed and implemented.  Other proposed policies (such as for climate change mitigation, land use, protection of biodiversity, biosecurity, etc.), legislation etc., that may affect forests, can be evaluated for consistency with the long-term forest policy.

When evaluating policies, strategies and legislation, it is useful to consider the following criteria:

  • Effective:  the policy should clearly be seen to be making a positive contribution to the issue being addressed
  • Simple:  the objectives should be easily understood and the policy easily implemented by those who are affected by it
  • Free from bias(i.e. equitable): the policy should neither penalise nor favour different sectors of the economy including different land uses
  • Relevant to New Zealand: the policy needs to recognise the characteristics of New Zealand, including the economy, the nature of our forests and forest industry, and the physical environment and be developed accordingly
  • Comprehensive and cohesive
  • Sustainable
  • Stable:  frequent and/or substantial changes in the regulatory framework are not conducive to a sector where the period between a decision to invest and realisation of the investment is several decades long
  • Scientifically supportable
  • Enforceable.

Policies should not give rise to so-called unintended consequences, certainly not ones that are identified or could reasonably be predicted before the policy was implemented.

A suggested Forest Policy for New Zealand 2018

In 2018, a group of forestry professionals, mostly connected with the New Zealand Institute of Forestry produced a short Forest Policy for New Zealand.  This has five main themes:

  • Understandingwhat benefits are provided from trees and forests.  Those identified include erosion mitigation, water quality, biodiversity, climate regulation, recreation and tourism, public health benefits, employment, forest products, and economic benefits.
  • Protectingthe environmental and economic benefits from existing forests.  Actions include biosecurity, adequate protection and management of significant biodiversity, research into understanding the impact of climate change on trees and forests, ensure policies that affect forests (including land use and taxation) are based on sound science, account for externalities arising from different land uses and are equitable to all land use sectors.
  • Increasingthe contribution of trees and forest by establishing new forests, changing management and recognising the long-term nature of forests.
  • Using and processingforest products, including cultural items, chemicals, medical products, etc.
  • Governance:  establishing a national forest agency to provide expert advice to government, collecting, and analysing data for making sound and informed decisions; encouraging investor confidence, high quality education and training to support all forest owners and managers and to educate the public, officials and Ministers, ensure the availability of quality research facilities

A policy of this nature focuses mostly on the common features of forests – all forests provide (some more than others) a wide range of benefits, including biodiversity, climate regulation, water quality, erosion mitigation, forest products, landscapes, recreational opportunities, spiritual and cultural values.  For example:

  • A natural forest provides the greatest biodiversity, but there are examples of pine plantations being the home to NZ natives such as for kiwi, kārearea (falcons), robins, orchids, etc.
  • The main objective for commercial plantation forests is to provide wood and other forest products, but they also provide recreational opportunities, climate regulation, water quality, etc.

The benefits come from privately or publicly owned forests, indigenous or introduced forest species, national parks, Māori owned forests, farm woodlots and large commercial plantations.  The benefits usually extend beyond the forest boundary to society more generally.  But, particularly in the case of private forests, they depend on the goodwill of the owner, which in turn requires sound national policies, legislation and regulation that are based on good science, recognise the long-life cycle of forests, accept the right of owners to make a return on their investment and recognise the contribution to the environment, economy, society and culture that owners make.

A comprehensive forest policy for New Zealand

Rather than having separate policies for private forests and public forests, plantation forests and conservation forests, radiata forests and kauri forests, etc., the contributors to the NZIF policy believe that better outcomes can be gained from a comprehensive approach that looks at how society can benefit as a whole.  Within this framework it can have sub-policies or strategies for protecting the benefits.  For example, we might want to prevent any extraction activities from natural indigenous forests, but also to embark on an expanded program of research and action into growing native species, on land specifically to provide a resource that can, in due course be harvested for timber and other products.

A forest policy is a long-term document, sufficiently broad to not require frequent revision.  Below the policy we would expect to see strategy documents – actions to be taken over the medium term (5-10 years) to help achieve the long-term policy and which may be reviewed on a regular basis to incorporate new knowledge and progress in recent years.  Below these are operational plans – short-term actions usually associated with budgetary provision for action to meet the medium-term strategy.

Without a forest policy, and the framework it would provide to assist with long-term decision making, the risk is that forestry is discriminated against in favour of other, short-term land-use and environmental goals.

This is off-putting to investors, and it could be argued, potentially particularly off-putting to investors in new native forests, where the timeframe for a return on investment – be this financial, environmental, social or cultural, is likely to cover many decades if not centuries.

Has the lack of a NZ forest policy affected decisions?

There are several examples of situations where policies have not been achieving objectives or which have had unintended consequences.  Two of these are the emissions trading scheme (ETS) and the regulations to control degradation of Lake Taupo water quality.

An analysis of changes in NZ’s plantation forest area between 1920 and 2011, which showed the greatest area (1.827 million ha) was reached in 2003, followed by a decline of 108,000 ha to 1.719 million ha in 2011.  Data to 2020 shows further decline of 54,000 ha to 1.665 million ha.  In total, since 2003 (following enactment of the Climate Change Response Act 2002), plantation forest area has reduced by 9% during the period of a policy supposedly created to increase plantation forests.

The NZ greenhouse gas inventory report for 1990 to 2018 shows that emission removals from ‘land use, land use change and forests’ (LULUCF) reduced by 4,903 CO2 equivalent kt or 17%.  As removals represent a net reduction in emissions, the ETS seems to not be helping New Zealand’s position.  NZ’s gross emissions rose by 24 % in the 1990-2018 period, while net emissions rose by 57%.  The inventory report records this is ‘due to more forests being harvested, fewer trees being planted and an increase in gross emissions’.  The report also states ‘between 1990 and 2018, emissions from the Agriculture sector increased by 17.1 per cent. This is primarily due to an 85.6 percent increase in the national dairy herd since 1990 and an increase in the application of synthetic nitrogen fertiliser of 670 per cent since 1990.’

There is evidence that at least some deforested land was replaced with dairy farms.  Such action – conversion of plantation to dairy – was a double hit against the ETS.  But some of the deforestation along the Waikato River was probably also a result of land owners anticipating the possibility of the regulations to reduce the level of nitrogen entering Lake Taupo being imposed along the river as well as around the lake.

A further issue with the ETS is that the greatest economic return for land owners is when fast-growing trees are established.  This generally means establishment of radiata pine, even in areas where the economics of a commercial crop are minimal (remote, steep, difficult to harvest, etc.)  A concern is that these will be “plant and leave” stands rather than managed forests and therefore more susceptible to fire, pest and disease attack, etc.  Without the commercial incentive of more rapid accumulation of carbon credits, it would be more beneficial to New Zealand for native forests to be established or regenerated in such areas.

Relying on forests to reach net emissions targets poses challenges, as continuous levels of afforestation would be needed to maintain similar levels of mitigation year on year. Over time the area suitable for new forest establishment would decrease and the newly planted forests would reach their long-term average carbon store, no longer contributing towards targets. There is also an ongoing global risk that the carbon stored in forests could be re-released back into the atmosphere if forests are destroyed or damaged.  If the forest is not replaced, this results in a net increase of carbon dioxide in the atmosphere. Future decision makers in Aotearoa could decide to change landuse away from forest, in which case the carbon stored would be re-emitted.

In summary

New Zealand needs a comprehensive forest policy. It must be based on good science and practical knowledge and be supported by politicians, officials, those involved in forests and forestry, and the public. Such a policy would provide the framework for maximising the economic, environmental and societal benefits and the contribution that any type of forest can make to the other objectives of the country.

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