Counterbalancing the incentives that prize short-term carbon sequestration
The New Zealand Emissions Trading Scheme (ETS) is Aotearoa’s primary tool for driving the transition to a low emissions economy through pricing emissions and rewarding removals. Fast growing exotic species that bring higher carbon stock yields across a 50-year horizon comparative to other species, are favoured.
By adopting a short-term approach to carbon accrual, the ETS fails to recognise, and therefore secure, the much longer-term and enduring carbon yields that our indigenous forests deliver (aside from their multiple and superior co-benefits).
The ETS also fails to account for the risks and liabilities associated with short lived exotic tree monocultures beyond 50-years. These risks and liabilities are effectively being “kicked down the road” for future generations in Aotearoa to deal with. This is not the legacy we should be leaving our children and grandchildren.
For ETS registrants relying on the ETS’s carbon stocks look-up tables, which present default yields according to species and region, indigenous species are presented as one homogenous category. No differentiation is made for individual species, or for regional carbon stock variances, thereby failing to accurately recognise and account for the true carbon sequestration potential across a range of indigenous species and forests. The look-up tables also do not go beyond 50-years when most carbon sequestration occurs in native forests.
The differences between planted versus regenerating indigenous forest are also ignored. Furthermore, the measurements are based on naturally regenerating shrubland (not, for example, planted and well managed indigenous forest stands, or strategically enriched regenerating indigenous forests).
Recent research has shown that, with regard to relative growth and carbon sequestration rates, “[t]he difference between exotic species and well managed planted indigenous forest is much less than is often suggested”.
Furthermore, the accrual of New Zealand Units is not discounted for emissions across the value chain for New Zealand exotic plantation forests, nor the limited additionality rotational clear felled exotic forests achieve if any (for “replanting pines only restores the carbon lost from harvesting rather than increasing our sequestration”, and the implications of clear fell harvesting on our soil carbon stores are not well understood).
Carbon prices, agreement to reverse the original proposal to restrict the ETS’s permanent forest category to indigenous species only from 1 January 2023, and the absence of a countervailing biodiversity credit scheme are making these market distortions worse. As a consequence, the quantum of exotic planting committed and forecast is well in excess of the Climate Change Commission’s net-zero modelling recommendations. The resulting oversupply of ETS units and its effect on carbon prices will stymy the rate of gross emissions reductions in Aotearoa, with attendant reputational and market risks.
The implication that large areas of even-aged Pinus radiata represent ‘permanent forest’ is misleading. Given their comparatively short natural lifespan (relative to most indigenous species), increased vulnerability to fire, windthrow, disease and pest incursions, and the ability to harvest ETS-registered ‘permanent’ forests down to just 30% canopy cover per hectare of forest (and a prohibition on clear-felling of just 50 years), the claim to permanence is inappropriate.
It is often submitted that exotic carbon forests can be transitioned to indigenous forests. However, the costs, practicalities, timeframes and risks associated with realising these proposals is presently unproven universally or at scale. The risk of their failure will fall to future generations, while critical time is lost to establish slower growing indigenous species in the meantime.