Brian Fallow: No hiding in the forests with climate change
COMMENT: For too long, climate policy in New Zealand has been entangled in the net of "net" emissions. And the Government's swift rejection this week of a key recommendation from the Parliamentary Commissioner for the Environment, Simon Upton, suggests we will remain so ensnared. We have been complacent about relentless growth in emissions of carbon dioxide, and have met our international obligations, because they have been offset by the CO2 taken up by trees in an expanding forest estate. Read more: Environment watchdog's bold idea to combat climate change Policymakers have suffered from a kind of collective wilful blindness, an unwillingness to really confront the obvious fact that trees can only provide a temporary store of carbon before they are harvested or succumb to other risks like fire or pests and diseases. And climate change, Upton reminds us, only increases those risks. Even totara of the most venerable antiquity will eventually keel over and rot. Hence the central recommendation of the Parliamentary Commissioner's report this week: that forest sinks should ultimately after a transition that would need to be carefully managed be used only to offset the "biological" emissions of methane and nitrous oxide arising from the bodily functions of livestock, and not to offset CO2 emissions from the use of fossil fuels. Those CO2 emissions, because they accumulate in the atmosphere, are the planetary equivalent of turning up a thermostat that cannot be turned down, Upton says. They need to be reduced to zero. "At the time climate negotiations were commenced [allowing forestry offsets for CO2 emissions] might have been a justifiable approach, although even then scepticism was raised about whether the time being bought would be put to good use. The sceptics have been proved right," Upton, who as Environment Minister represented New Zealand at the Kyoto conference, ruefully writes. "Far from using the intervening years to push for significant decarbonisation of transport and industry, New Zealand has simply increased its gross fossil carbon emissions by 35 per cent. Furthermore a net loss of 50,000 hectares of planted forest occurred between the passage of the Climate Change Response Act in 2002 and the end of the first commitment period of the Kyoto Protocol in 2012." One consequence of the big swings in afforestation rates since the 1990s is that in the coming decade, forests are due to flip from being a net sink to a net source of national greenhouse gas emissions. Ironically, it is the legacy of that wasted opportunity, of time bought but squandered, and perhaps a dread of repeating the policy-induced collapse of demand for forest sink credits, that has led Climate Change Minister James Shaw to summarily reject Upton's call for forest sinks to be used only to offset biological emissions. Essentially, Shaw said that the narrowing window of opportunity to stay within 1.5C of global warming means it is too late for radical changes, however intellectually elegant, of the kind Upton advocates to the design of the emissions trading scheme (ETS). "For the sake of providing policy stability and predictability for emitters and the forestry sector, the Government is committed to retaining the use of forestry offsets for carbon dioxide and other greenhouse gas emissions," said Shaw. So thanks, but no thanks. Reforms to the ETS the Government consulted on last year, and which it plans to introduce this year, will provide the necessary incentives to reduce domestic emissions, Shaw assures us. The big change will be a cap on total allowable emissions, he says. The cap will be a sinking lid, lowering every five years. This is would correct a key flaw in the ETS: being a cap-and-trade scheme with no cap. Part of the consultation the minister refers to has been with the Forestry Reference Group set up in 2016 and composed of seven wise men with a lot of experience of the industry including carbon forestry, farm forestry, Maori forestry and participation in the ETS. Their final report , delivered last November, provides a reality check for more enthusiastic views of how forestry, via the ETS, can contribute to a low carbon future. They make the important point that a changing climate itself will change, and perhaps quite quickly, what it is possible and commercially attractive to grow in New Zealand, so that flexibility of land use will be increasingly important and valuable. "However, forestry is inflexible: trees grow slowly and forest management cannot respond quickly to market changes," the group's report says. "Also, before they can change land use pre-1990 forest owners and post-1989 forest owners who join the ETS and sell their land use flexibility (in the form of New Zealand units) must repurchase that right at an unknown future cost. Only post-1989 forest owners who stay out of the ETS or bank their NZUs can change their land use without penalty." Other factors also confound the potential for the ETS to encourage afforestation, the group warns. "These include the reluctance of farmers to change land use, uncertainty around carbon prices, high land prices and [regulatory] controls on forest establishment and harvesting. Unless these factors are addressed in ways that fairly spread the sectoral costs it is unlikely we will plant anything like the area of trees suggested in zero-carbon models." They do not dispute that high carbon prices will encourage both new planting on land farmers own and the reversion of marginal land to native species. But they also point to the fact that less than 20 per cent of commercial plantation forests are active participants in the ETS. "Although high carbon prices will encourage more landowners to register forests in the ETS and sell carbon, those who own flexible land will value it more highly and demand more for it, pushing up land prices." These are all good reasons to heed the central warning in Upton's report. The international accounting rules that allowed us to net off carbon sequestered in the first generation of trees in a new forest could only ever buy us some time. We have wasted that time. And it is idle to assume that more of the same will produce a different result. The NZ sharemarket nudged higher for the week.