The case to plant more native forests to off-set emissions has been again pushed in another major research report - and this time, researchers say businesses could benefit.

Wellington-based Motu Economic and Public Policy Research's report suggests establishing native forests is an environmentally and economically attractive way to decrease the risk for those high-emitting companies, who could face a carbon market where prices soar as high as NZ$270 per unit.

Report co-author Dr Suzi Kerr said about eight per cent of the forest land registered in New Zealand's main carbon mechanism, the Emissions Trading Scheme, was native.

Since 2008, however, only 500ha of new native forest had been established and registered.


"If we established another 10,000ha of land in native forest, this would sequester 65,000 tonnes of greenhouse gases annually, which would be eligible to earn 65,000 NZUs per year under the ETS."

Companies with obligations in the ETS, or with high emissions that they could not rapidly reduce, all needed to plan ahead in case the unit price climbed substantially higher than its current $17 per NZU, Kerr said.

Recently, the International Energy Agency predicted that the international carbon unit price could go as high as US$190 (NZ$270).

"If that happens, the more native forest we have established, the more we will celebrate," Kerr said.

"We don't want all of New Zealand back in native forest but on large areas of marginal pasture land there really is no way New Zealand can lose."

Along with businesses, Kerr saw benefits for groups such as community efforts and iwi, whose planting of more native forests could offer increased biodiversity, better erosion control, plantation forestry diversity and cultural meaning.

Kerr also noted the increased certainty around New Zealand's global commitments with the Paris Agreement as impetus for using native forest to offset carbon emissions, and the fact that there were other payments for planting native forestry available.

"The thing I really like about this opportunity is that it all comes together in a moral and economically justifiable package, which is the whole reason I got into environmental economics in the first place."

The paper, commissioned by Air New Zealand, also looked into other options for offsets, including soil carbon, marine carbon and carbon capture and storage.

"We found that these more alternative options are not yet strongly enough supported by scientific evidence to include in regulation," she said.

"They may offer possibilities in the future."

In recent times, scientists have also gained new insights into the sequestering power of native trees.

One new paper by the National Institute of Water and Atmospheric Research found our forests and other land areas may be sucking up to 60 per cent more carbon dioxide out of the atmosphere than previously thought - and we could likely thank our native trees for much of it.

Modelling had pointed to a large carbon sink somewhere in the South Island; and the areas singled out were those largely dominated by indigenous forests.

Last year, another report by green business think-tank Pure Advantage called for a new national forest strategy that would halt deforestation and ultimately create 1.3m ha of new forest.

It argued that planting huge new blocks of permanent native forest and fresh high-carbon commercial forests could avoid large areas of land being lost to erosion, help off-set agricultural emissions and put the country on course for a net-zero greenhouse gas future.

Along with erosion-prone land, new forest should also be planted along waterway margins and urban forest, where the environmental benefits of trees, such as protecting river ecosystems, would be much greater.

The Government has already stated that 1.1m ha of land is erosion-prone.

Covering the entire amount in native trees would avoid hundreds of millions of dollars of lost value, while sucking at least 9m tonnes of carbon dioxide from the atmosphere every year, that report stated.

The mass-planting of new forestry was again recommended as an option in a report by UK consultants Vivid Economics and commissioned by a cross-party group of MPs.

The Government is currently rolling out changes to carbon trading, including phasing out the one-for-two ETS subsidy, which allowed some businesses to pay one emissions unit for every two tonnes of pollution they emit.

The initial 50 per cent unit cost increased to 67 per cent from January 1, and would rise to 83 per cent from January 1, 2018.

All sectors in the ETS would pay the full market price from January 1, 2019.

Alongside the ETS review, the government has established three expert groups to plant more trees, reduce agricultural emissions, and adapt to the environmental impact of climate change, as well as invest $2 billion in public transport, $20 million annually in agricultural greenhouse gas research and $200m for international climate-related support.

New Zealand and climate change

• Under present projections, the sea level around New Zealand is expected to rise between 50cm and 100cm this century, while temperatures could also increase by several degrees by 2100.

• Climate change would bring more floods (about two-thirds of Kiwis live in areas prone to flooding); make our freshwater problems worse and put more pressure on rivers and lakes; acidify our oceans; put even more species at risk and bring problems from the rest of the world.

• Climate change is also expected to result in more large storms compounding the effects of sea level rise.

• New Zealand, which reported a 23 per cent increase in greenhouse gas emissions between 1990 and 2014, has pledged to slash its greenhouse gas emissions by 30 per cent from 2005 levels and 11 per cent from 1990 levels by 2030.