The commission’s Low Emissions Economy report released last August also found that small woodlots will sequester less than two million tonnes of carbon a year.
The Government has confirmed it is considering extending the eligibility of woodlots eligible for carbon sequestration to include areas such as riparian planting and shelter belts, enabling farmers to offset their emissions or earn NZ Units which they can trade.
But the commission doubted its worth.
“For instance, riparian planting at 5m wide would generate between three and eight NZ units a kilometre each year, providing between $60 and $160 in income.”
NZ units are traded on the Emissions Trading Scheme (ETS) with one unit equivalent to one tonne of sequestered carbon dioxide equivalent.
The report notes it costs landowners $500 to register with the ETS and $102 to claim units.
The commission found that not only was the financial viability questionable, non-ETS land would sequester less than 2m tonnes of carbon dioxide equivalent a year.
Forests that qualify for the ETS are currently sequestering 24m tonnes of CO2 a year.
It quoted a study that found small woodlots would sequester 1m tonnes of CO2 equivalent if established on 0.4% of agricultural land, a 10m wide riparian strip running half the length of NZ streams and rivers would sequester a further 0.7m tonnes and peatland and wetlands 0.1m tonnes.
“The study found that these forms of sequestration would offset at most only a minor proportion of pastoral farming emissions.”
It did not look at forestry woodlots or indigenous forests, something Beef + Lamb NZ is seeking to have included given 2.8m ha of native forests, grassland, shrubland and wetland is on NZ sheep and beef farms.
The commission’s report noted that modern satellite and imaging technology could assist in mapping small woodlots, but other challenges remained, such as high administration costs relative to returns and satisfying international greenhouse gas accounting rules which do not allow offsetting from small woodlots.
“Feasibility would depend on international greenhouse gas accounting conventions changing to include smaller plantings and technology emerging to cost-effectively and reliably monitor carbon sequestering in such plantings.
“Aggregation for accounting purposes would also be required so that the rewards to participating landowners outweigh the administrative costs.”
The commission was told by the NZ Carbon Farming Group (NZCFG) that an NZU price above $18.80 and policy certainty would encourage it to commit to planting 20,000 ha a year. It is currently about $22.
But the group noted that as more is planted in forests the price of additional land suited for planting increases.
The NZCFG says an NZU price heading towards $70 is likely to encourage increased afforestation mostly on marginal sheep and beef land.
Climate Change minister James Shaw has said the Government intends introducing measures to ensure the NZU price does not become too volatile, such as releasing more units once the price reaches a trigger point.
While BLNZ wants the definition of eligible forest extended, the commission says DairyNZ proposed a hybrid approach for dairy farmers, combining onfarm planting with the purchase of carbon credits from elsewhere.
That could include community-based afforestation blocks where farmers collectively bought land for carbon sequestration on to which dairy companies could to plant trees to offset their emissions.
A spokesperson for the Ministry for Environment says the Interim Climate Change Committee (ICCC) has delivered a report to Government that includes options to allow small woodlots and riparian planting for carbon sequestration.
That report includes options to broaden the definition of what woody vegetation that can be considered for carbon sequestration and options for soil carbon management as a means of reducing on farm emissions.
“The ICCC report was handed over to Government at the end of April and the Government is considering its response.
“The Government will consult with the general public on this response before making its final decisions.”
