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1 Introduction

This report provides an assessment of the data that is available to estimate carbon stock changes in New Zealand that might be included under Article 3.4 of the Kyoto Protocol. Where possible, estimates are provided of the size of the relevant carbon stocks as at 1990, their recent average rates of change and the uncertainties in the rates of change. Uncertainties in many of these numbers are relatively large and where possible the key factors causing those uncertainties are noted.

The general approach adopted in this assessment is consistent with that used in the Inter-governmental Panel on Climate Change (IPCC) Special Report on Land-use, Land-use Change and Forestry (SRLUCF, 2000), and the Revised 1996 Guidelines for National Greenhouse Gas Inventories (IPCC, 1997), except where explicitly noted.

For comparability with the carbon stock change estimates provided in the United States Submission to the UNFCCC on LULUCF dated 1 August 2000, we have adopted a similar comprehensive accounting approach, with emphasis on a land-based accounting system, and consideration of broad rather than narrow definitions of relevant activities.

The focus in this report is on measurable, verifiable changes in land-based carbon stocks, rather than greenhouse gas emissions. Consistent with the US approach we have listed the dominant effects of activities on non-CO₂ greenhouse gases where these are known. There remains some ambiguity in how non-CO₂ greenhouse gases will be treated under the Protocol. Article 3.4 differs from Article 3.3 in referring not just to "changes in stocks", but to "changes in greenhouse gas emissions and removals". Thus changes in methane related to human activities affecting land-use might be classified under Article 3.4. However, to avoid the risk of double counting, major changes in non-CO₂ greenhouse gases resulting from land-use change, e.g. change from pastoral agriculture to forestry, are probably better treated in the national greenhouse gas inventory under Annex A and Article 3.1. Some effects, such as change in methane removals in soils, might be more naturally classified under Article 3.4, but this could mean they become subject to discounting under some policy proposals.

Carbon pools and carbon accounting considered here are consistent with the position taken by the US submission to the UNFCCC of 1 August 2000, viz:

"Carbon pools should include: live biomass including roots; litter mass; organic soil carbon to a depth appropriate to the land use; logging residue; carbon in harvested biomass products and landfills; and carbon in standing or down dead wood.

Carbon accounting should take into account the transient nature of much of the above-ground biomass on cropland and grazing lands. However, in the case of grazing lands and converted cropland, the durable above-ground woody carbon pool can be significant and may be one of the main components that changes with management."

The US Submission to the UNFCCC specifically mentions the harvested wood products (HWP) pool, but this involves the additional issue of attributing the emissions associated with the decay of wood products to either the producing or consuming country, and raises issues dealt with elsewhere (McFarlane, 2001). We make brief mention of some HWP issues for New Zealand here, but have not considered this issue in detail.

The activities considered here are restricted to those that can reasonably be considered as "human-induced" as required under Article 3.4 of the Kyoto Protocol. Where there is potential ambiguity in deciding the human component in the effects being considered, that is discussed in the text.

Policy decisions may be made that would limit credits under Article 3.4 to carbon stock increases additional to those that would have occurred under a "business as usual" scenario. In general, defining a business as usual baseline is difficult and beyond the scope of this assessment. The approach taken below is to identify the main socio-economic factors influencing the activities considered and to note current trends where these are known.

This assessment does not address project accounting issues, nor any potential implications of joint implementation or the clean development mechanism in relation to New Zealand's potential Article 3.4 activities.

Some of the activities considered are likely to be associated with significant co-benefits, e.g. erosion control, or with other environmental issues, e.g. biodiversity. While such associated effects are discussed in specific instances, no attempt has been made to cover these comprehensively.

Section 2 discusses general aspects of the issue of uncertainty in estimating land-based carbon stocks. Sections 3, 4, 5 and 6 cover the broad activities of Forest Management; Cropland Management; Grazing Land Management, and Natural Revegetation respectively. Note that we have used the international term "Grazing land" whereas a more natural and common term in New Zealand would be "Pastoral land".

For each of these broad activities we consider:

• Specific activities considered, and effects not covered;
• Effects on non-CO₂ greenhouse gases;
• Definitional issues;
• Socio-economic factors influencing the activities considered;
• Applicability of a land-based accounting system;
• What data, publications and reviews are available;
• Sampling techniques and issues;
• What process models are available to complement data;
• What regional and national scale inventories are available;
• What is known of 1990 carbon stocks and current trends;
• Projections for the first commitment period where feasible;
• Data and research needed to reduce uncertainties.

Section 7 covers a number of other issues that are relevant to consideration of Article 3.4 and proposed moves towards full carbon accounting. In particular we address briefly: the issue of "net - net" versus "gross - net" accounting; the harvested wood products pool; indigenous forests and pest effects; the implications of soil erosion; and the present state of full carbon accounting in New Zealand.

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