The government signed up to the Paris Accord and we now have until 2050 to become 'carbon neutral' or risk some very heavy costs to cover our shortfall as a nation.
As we are all addicted to fuel, the chances of becoming carbon neutral through a vast reduction in fossil fuel use are highly unlikely. Thus, the most cost-effective way of offsetting this is forestry – hence the Billion Tree Programme.
To put some numbers around carbon, an average forest in the North Island will grow about 800 tonnes of carbon per hectare by age 28. The current carbon price is around $34 per tonne which gives $27,200 per hectare or around $1080 per hectare per year.
Not a bad return, especially on marginal country.
The Productivity Commission released a report last year that calculated the price of carbon had to be over $70 per tonne before the average Joe's behaviour around fossil fuels changed – that's pretty much double the above numbers and not unforeseeable if we want to meet our 2050 targets.
As an industry, we do not want to see wholesale conversion of highly productive farmland into forestry for purely carbon reasons. But we do see a significant opportunity for landowners to optimise the value of their land through smart land use.
If trees (and carbon) are part of this mix is this really any different to putting a flat paddock into an annual crop as opposed to grass?
The majority of the newly established forests will be entered into the Emissions Trading Scheme and the subsequent carbon sold to realise the investment. The problem arises when a forest is established solely for carbon sequestration with no intention of harvesting the crop.
These forests are planted at high stocking rates with no subsequent pruning or thinning. This creates a crop which is very unlikely to have an economic value at maturity due to the very small individual tree size.
This method may be suitable for remote areas of poor country that have no other viable land use. However, for productive land with multiple land uses this is purely sacrilege as the land is effectively permanently out of commission once the forest has reached maturity.
A forest that is established with the intention of an income from harvesting plus an intermediary income from the sale of the carbon will create value throughout the life cycle of the forest.
To create a saleable tree crop the forest is generally pruned and thinned or at least thinned to give trees that are of suitable size for domestic or export markets. The resulting wood products are used in all manner of products from construction to paper production both domestically and overseas.
While this is an alternative land use to traditional sheep and beef production, the land can be returned to farmland following harvest should the fundamentals change.
We all agree that the labour demand for a single age class forest can be lumpy but regions with multi-age class forests provide significant and consistent employment opportunities.
So, in summary, managed forests are an alternative land use to farming. In marginal areas on farm, (i.e 2-3SU/ha) a managed forest has been proven to provide much better economic returns in many regions.
Forests provide considerable employment in rural sectors, are a large contributor to the country's GDP and provide products with which to construct the things we like to live in.
Climate change is not going away, and it is generally accepted that locking carbon into forests is a very effective mitigator for this.
While the debate about land conversion to forestry is a hot one, the need for informed discussion has never been so important.
