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3.6 SEQUESTRATION OF CARBON BY PLANTATION FORESTRY

3.6.1 Forestry on Farm Land

It is only in recent times that commercial tree planting has been generally considered as a viable opportunity by farmers in New Zealand. Traditionally, trees have been used for shelter and for conservation. Woodlots were often planted on the difficult areas out the back of the farm.

Government policy has varied in regards to incentives and disincentives. Currently, the environment is relatively positive but, there are still taxation anomalies that discriminate against investment in trees on farms. The vendor of a growing forest is taxed at 33%, but the purchaser is unable to deduct the purchase price until harvest. In order to be consistent with other assets, if the forest is regarded as capital, it should not be taxed on sale. On the other hand if regarded as current expenditure it should be able to be deducted by the purchaser.

Price decontrol has exposed the industry to international prices for wood, Profitability has risen sharply as the supply of trees from tropical and other natural forests has become restricted. Environmental concerns over milling natural forests worldwide has created increased demand for New Zealand's plantation forests as an alternative source of wood. These factors are positive towards a higher rate of planting than has been seen in New Zealand in the past.

The major constraint on increasing planting levels is the availability of capital. Farmers themselves are not well placed in terms of cashfiow to plant large areas of land. The forest companies are also not planting trees at present. Offshore investors are generally more interested in buying into mature forests although some interest is being shown in new blessings. Major interest is from small and medium investors, however, there may be a limit on their capacity

Appendix V backgrounds the planting of trees on farm land and looks at past and likely plantings on a regional basis.

3.6.2 New Plantings

National surveys of local nurseries and major forest owners in November 1992, estimate new plantings of 48,000 hectares, and restocking of 28,000 hectares for 1992.

For 1993 it is predicted that there will be approximately 60,000 hectares of new planting, and 22,000 hectares of restocking. The new plantings are almost entirely in 'small' forests as the large forest companies are still absorbing the implications on the purchase of the State's forests on their balance sheets.

There are expectations (Minister of Forests) that new plantings could rise to 100,000 hectares by 1995 once the large companies begin replanting again having reduced their debt equity ratios to manageable levels.

3.6.3 Sequestration of CO2

The 1.29 million hectares of New Zealand plantation forests stored approximately 4.5 million tonnes of carbon in the year ending 31 March 1989. High levels of plantings in the 1970s and 1980s are currently driving large increases in growing stock with consequent high sequestration rates. The national plantation forest is far from balanced by age class and thus sequestration of carbon in the future will fluctuate markedly as the large age classes are milled in the late 1990s and beyond. Over the past two decades the average area planted was around 40,000 hectares.

Pinus radiata accumulates carbon at an almost constant rate until around age 60. In a 28 year rotation on a fertile ex-pasture site, the mosaic of stands in a 'normal' forest would store on average 122 tonnes of carbon per hectare (447 tonnes of CO2 in perpetuity.

As the rotation length increases so does the average amount of carbon increase. For example, a normal forest consisting of stands cut after 40 years would store about 193t C/ha (708t CO2/ha) and a normal forest with a 60 year rotation would store about 310 t C/ha (1,138t CO2/ha). The reason for the increase is that the forest is in an accumulating state for longer over any period. New Zealand's plantation forests thus act as powerful carbon sinks (Maclaren et al, 1992).

Approximately 6.4 million tonnes of fossil fuel carbon (including that for international transport) were emitted by human activities in New Zealand in 1988 and about 5.9 billion tonnes were emitted globally. New Zealand's plantation forest uptake in 1988-89 Was about 70% of the carbon in New Zealand's CO2 emissions, but less than 0.1% of global emissions (Maclaren, op cit).

New Zealand currently emits around 7.2 million tonnes of carbon per annum (26.4 mt CO2). If this were to be reduced by 20% per annum Maclaren et al have estimated that 11,800 hectares of new commercial pine forest on pasture would need to be established. Each year, however, a further 11,800 hectares would have to be planted to ensure the saving was maintained. The area planted required to offset emissions would decrease if the rotation length was increased. If the rotation length was increased from 28 years to 48 years the area required would be halved (Maclaren, op cit).

The planting of new pine forests on pasture thus offers a way of meeting commitments to reduce- the emission of GHGs in New Zealand for a period long enough to for the needed research into the uncertainties surrounding the enhanced GHG problem.

3.6.4 Impact on Farming

Future new plantings of pine will occur on pasture and scrub areas. Where pasture is replaced this implies the substitution of pines for livestock. Rhodes (1992) has estimated that the average stocking rate on the type of land that would most likely be planted would be 6.5 su/ha.

Given certain assumptions it is possible to estimate the total amount of CO2 in the sink created, the total area removed from pasture, the decrease in livestock numbers and the size of reduced emissions of methane from the displaced livestock. A simple model is outlined below which makes such estimates.

Assumptions:
  1. The area of new plantings is a major uncertainty. Three scenarios which straddle the possible range of plantings have been analyzed, a high, low and medium level:

      Scenario 1 - New plantings rise from 48,000 ha in 1992 to 100,000 ha in 1995 and stabilise at that level.

      Scenario 2 - New plantings rise from 48,000 ha in 1992 to 100,000 ha in 1995, then fall back to 40,000 ha by 1998 and stabilise at that level.

      Scenario 3 - New plantings rise from 48.000 ha in 1992 to 100,000 ha in 1995. Then fall back to 70,000 ha by 1997 and stabilise at that level.

  1. Sequestrations taken at 447 tonnes of CO2 per hectare of new plantings. The simple assumption is made that the average level of sequestration occurs from the year the trees are planted. In reality it will take some time before the forest become a stable sink of CO2
  2. The number of livestock displaced by trees is taken at an average of 6.5 su/ha planted. There will be some areas with higher socking rates and some with lower.Some new planting will take place on scrub covered areas.
  3. The amount of methane emitted per sheep stock unit is 11.5 kg/ha. This converts to 126.5 kg CO2/su based on an integration period of 100 years (1 CH4 = 11 CO2).

Details of the three scenarios are shown in Appendix VI, Tables 1,2 and 3. A summary is provided in Table 3.4 below.

Table 3.4 CARBON SEQUESTRATION AND METHANE REDUCTION FROM NEW PINE PLANTINGS ON PASTURE
Scenario 1 2 3
New planting stabilises at ('000 ha/annum) 100 40 70
Cumulative area in trees ('000 ha)  
As at 1995 325 325 325
2000 825 585 685
2020 2,825 1,385 2.085
Sequestration stabilises at (m t) 44.7 17.9 31.3
Sequestration as % of 1990 CO2 Emissions 169.3 67.7 118.5
when stability reached      
Sequestration as % of 1990 CO2 & Methane Emissions when stability reached 104.2 41.7 72.9
       
Decrease in su/annum ('000) when stability reached 650 260 455
       
Cumulative decrease in su (million)    
As at 1995 2.1 2.1 2.1
2000 5.4 3.8 4,5
2020 18.4 9.0 13.6
Methane reduction (t CO2)    
As at 1995 267 267 267
2000 678 481 563
2020 2,323 1,139 1,714
Methane reduction as % of 1990 CO2 emissions    
As at 1995 1.0 1.0 1.0
2000 2.6 1.8 2.1
2020 8.8 4.3 6.5
Methane reduction as % of 1990 CO2 & Methane emissions  
As at 1995 0.6 0.6 0.6
2000 1.6 1.1 1.3
2020 5.4 2.7 4.0

3.6.5 Scenario 1: 1009000 ha pa Planting Rate

In Scenario 1 where new plantings are assumed to stabilise at 100,000 ha/annum from 1995 on, the area taken for trees reaches 825,000 ha by the year 2000 and 2.8 million ha by the year 2020. The volume of C02 sequestered stabilises at 44.7 million tonnes. This would act as a sink equivalent to 169% Of 1990 C02 emissions (and 104% of combined C02 and methane emissions) as long as 100,000 ha of pines continue to be planted each year.

There is obviously a limit to how long this planting rate can continue. By around the year 2040 there would be an additional 5 million ha taken out of farming, which is around 50% of the total area in pasture and lucerne. If tussock and danthonia is included, there is a reduction of around 35% in the total area that can be grazed. In 1995 there would be 2.1 million less stock units, by 2000 5.4 million less and by 2020 18.4 million less.

The reduction in methane emissions as measured in CO2 equivalents as a result of the decrease in stock units would be 267,000 tonne in 1995, 678,000 tonne in 2000 and 2,323,000 tonne by 2020. By the year 2020 this is equivalent to 8.8% of 1990 CO2 emissions (and 5.4% of combined CO2 and methane emissions).

3.6.6 Scenario 2: 40,000 ha pa Planting Rate

Scenario 2 assumes that plantings rise to a maximum of 100,000 by 1995 then fall to 40,000 ha (around the average for the 1970s and 1980s) by 1998. Under these assumptions the area in trees increases by 1.4 million ha by 2020 and the amount of C02 sequestration stabilises at around 68% of 1990 CO. emissions and 42% of combined CO2 and methane emissions). Live stock numbers decrease by 9 million by the year 2020 which reduces methane emissions by the equivalent of 4.3% Of 1990 CO2 emissions. 7.3% of 1990 methane emissions (and 2.7% of combined emissions).

3.6.7 Scenario 3: 70,000 ha pa Planting Rate

Scenario 3 assumes a mid way course between the other two scenarios. New plantings stabilise at 70,000 ha per annum in 1997 and the cumulative area in new plantings reaches 2.1 million ha by 2020. Annual sequestration Of C02 is around 119% of 1990 levels from 1997 on (and 73% of combined CO2 and methane emissions). The number of stock units decreases by 455,000 per annum and by 2020 there would be 13.6 million less than in 1990. The reduction in methane emissions is the equivalent of 6.5% of 1990 CO2 emissions (and 4.0% of combined emissions).

3.6.8 Pine Trees Offer Medium Term Solution

The three scenarios are based on variations of commercial conditions. They represent three options on what could happen. They are not forecasts of what will happen. No account is taken of possible government policy that would encourage tree planting on farm land for sequestration purposes. Besides it would seem illogical to provide government incentives when commercial conditions are likely to provide incentive enough.

Net returns from well managed commercial forestry on farm land are conservatively estimated at around $30,000-$40,000 per hectare at age 28. Relatively few farmers have yet to grasp the significance of this in relation to the net income generated off the rest of the farm.

While it would appear unlikely that 50% of New Zealand's pasture could be converted back to forest over the next 50 years it is conceivable that half this proportion could. The analysis implies the loss of 9-18 million stock units from the national flock over the next 30 years. The reality is that this would not occur. Initially, most farms could take a paddock out of livestock production and not reduce overall carrying capacity. The shift of stock off less productive areas will also benefit emissions reductions as poor quality feed markedly increases emissions of methane. Technology exists to significantly improve sheep production per hectare through crosses to exotic breeds and improved feed management. If the market demands increased production farmers win respond as long as it is profitable to do so.

Even under a worst case scenario where annual new plantings stabilise at -20,000 new hectares planted per annum (see Appendix VI, Table A6.4) sequestration still amounts to 34% of 1990 C02 emissions (and 21% of combined CO2 and methane emissions). Under these assumptions the area taken out of pasture by 2020 would amount to 705,000 hectares with a reduction in carrying capacity of 4.6 million stock units.

3.6.9 Breathing Space Provided

The overall conclusion is that new plantings of pine trees on farm land should provide enough sequestration of CO2 to meet international obligations to reduce net emissions over the next 50 years. This will provide time for the necessary research to be done to determine whether least cost measures to reduce emissions are required. In the meantime it would appear sensible to press ahead with initiatives to reduce emissions that have quantifiable net economic benefits.

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