Brian Fallow

The Economics Editor of the NZ Herald

Deforestation intentions soar with carbon prices low

Owners of large forests intend to deforest 39,000ha by 2020, a survey says. Photo / Glenn Taylor
Owners of large forests intend to deforest 39,000ha by 2020, a survey says. Photo / Glenn Taylor

Deforestation intentions have soared as the emissions trading scheme, at least at current rock-bottom prices, is no longer seen as a barrier to switching to other land uses.

A survey of large forest owners (with over 10,000ha) by Professor Bruce Manley of Canterbury University has found they intend to deforest 39,000ha between now and 2020, mainly in the central North Island and mainly to switch to dairy farming.

They represent three-quarters of the plantation forests with trees older than 20 years, which are likely to be harvested within the next eight years.

Assuming smaller forest owners only replant 80 per cent of the forests they harvest in the same period, the total area deforested would be 55,000ha or 12 per cent of the area of plantation forest maturing in that period.

On an annual basis it would represent only a modest increase on deforestation over the past five years - the period of the Kyoto Protocol's first commitment period, through which forest owners have had liabilities under the ETS.

But it represents a steep increase in the amount of deforestation the large forest owners said they expected to do in Manley's previous survey in 2011 on the assumption that the ETS would remain in place.

That survey indicated that their expected total deforestation between 2008 and 2020 would be just 17,000ha, not the 62,000ha recorded in the latest survey.

Instead it is closer to the 58,000ha of deforestation they said then that they would do if there was no ETS.

The great majority - 85 per cent - of the forests involved were planted before 1990, and under Kyoto's rules the carbon stored in them is deemed to be emitted upon harvest and is counted in the country's greenhouse gas emissions, unless the land, or its equivalent elsewhere, is replanted.

But since the 2011 survey carbon prices have plunged, with some kinds of units trading for a few cents a tonne, and they provide no material barrier to exit should the land be suitable for other uses.

The report estimates that 86 per cent of the land deforested by large-scale owners would be converted to dairy farms and another 9 per cent to sheep and beef.

"Most respondents who intend to deforest either had not calculated the breakeven carbon price or were not prepared to disclose it," Manley said.

- NZ Herald

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