NZ’s ETS Reform: Calls to Plant More Trees and Boost Diversity

More than 30% of New Zealand's carbon emissions are offset by forests.

Fri 23 Jun 23


Trees suck in greenhouse gas, clean the air and water, and provide homes to native wildlife.

And we’ll need a lot more of them to address the climate and biodiversity crises according to Stuff NZ climate reporter Olivia Wannan.

Last week, Wood Central broke the news that the NZ government will introduce new rules to tighten farm-to-forestry conversions.

On Monday the government released four options to reform the Emissions Trading Scheme (ETS) which could lead to the ETS being split into two – one scheme for emissions reductions and one for removing emissions from the atmosphere like tree planting.

The fear, according to NZ’s Forest Owners Association president, Grant Dobson is that New Zealand carbon units (NZUs) that remove emissions from the atmosphere will have less value than emission reductions.

“Deeming forestry generated NZUs to be of a lower or differential value to an emissions reduction NZU will only compound an already complicated ETS framework and its implementation.”

According to Te Taumata chairperson Chris Insley the reforms will be incredibly prejudicial to Māori, jeopardising huge amounts of possible ETS revenue.

“[It] will eliminate $10 billion development opportunity for Māori off marginal land,” Insley said.

Chris Insley, the Te Taumata chairperson has led the pushback against the reforms.
The all-or-nothing mindset to tree-planting is wrong

However, according to climate and forestry expert Dr David Hall people have an all-or-nothing mindset to forestry: either an entire block of land is covered in forest, or it’s bare. He argues that society would benefit from a more nuanced view.

Dr David Hall is a senior lecturer at AUT and is behind the “Trees That Count” planting initiative – which has planted almost 1.7m native trees across New Zealand.

According to Dr Hall, “Tree-planting shouldn’t be used as an excuse not to do emissions reductions within your own supply chains as an organization. It’s a both/and, not an either/or situation.”

As well as mopping up carbon emissions, trees and vegetation make land more resilient.

They minimise slips and erosion during storms, absorb water during floods and retain moisture through spells of drought. This absorption process prevents immediate water flow across the terrain and into waterways, significantly reducing potential downstream flooding.

Last week research provided by New Zealand-based Scion reported that trees act as nature’s sponges during significant rain events, absorbing nearly 60% of rainfall.

The research found that forests absorb rainwater and slow downstream runoff during major weather events. (Source: Scion)
NZ land use can be split into the following categories
  • Pasture for farming: grass paddocks provide food for sheep, cattle, cows, deer, and goats.
  • Horticulture: fields and greenhouses grow grains, fruits, vegetables, and nuts.
  • Exotic plantation forest: rows of non-native trees are planted. Every couple of decades, they are felled, producing forest products.
  • Native conservation forest: old-growth or regenerating native bush is preserved, and maintained by the Department of Conservation, Kiwi and other landowners.

Supporting land use, NZ has additional opportunities for trees, including:

  • Riparian planting: where landowners fence off waterways and plant native seedlings on riverbanks boosting the health of waterways and wildlife.
  • Habitat restoration: where landowners, businesses, councils, and community groups restore ecosystems and reintroduce threatened native species.
  • Woodlots: farms convert paddocks from pasture to trees which are regularly harvested.
  • Urban forestry: counting trees in parks and public grounds but also street trees.

“Leafy” suburbs are highly sought-after, but trees are often forgotten in new, densifying areas.

Urban trees provide natural protections: providing rain gardens and “biobanks” that guard against flooding. The Christchurch City Council, through the Ōtautahi Christchurch Urban Forest Plan, is a keyway that the city is navigating climate change.

According to the council, “Our Urban Forest Plan sets out how – over 50 years – we will grow our tree canopy and sustain a thriving urban forest of healthy, diverse and resilient trees. Achieving this will require strong action across Council activities and by the whole community – working together to nurture the forest, harnessing community participation and strengthening partnerships.”

Christchurch is looking to urban forestry or urban greening, to increase its canopy tree cover, which according to a 2022 report by the University of Canterbury dropped to its lowest level in 2018-19 (13.6%). The greener the better. Orange indicates about 10% canopy and red indicates 5% or less,

Then, there are newer ideas for adding more trees, including:

  • Agroforestry: rather than plain grass paddocks, farms intersperse trees – allowing animals and vegetation to mix – integrating trees and crops on the same land.
  • Native plantation forests: species like totara can be a good timber crop. It’s slower growing than exotics, but faster than most other natives.
  • Selectively logged forests: these plantation forests aren’t clear-felled. Smaller trees might be left to provide homes for displaced wildlife or protection for a waterway.
  • Close-to-nature forestry: to avoid every tree being the same age, native seedlings are regularly introduced. Decades after being established, careful logging is allowed. The canopy should remain intact, so crews mimic the natural life of trees and protect biodiversity.
  • Transitional forests: Using a fast-growing “nurse” species, a canopy is established to provide shelter. Decades or centuries later, slower-growing kauri, rimu and kahikatea replace the originals. The nurse species is thinned, but the subsequent generation is left to mature.
  • Carbon farming: landowners receive income by planting species on bare or unproductive land, and selling the greenhouse gas they absorb as credits. Trees are not harvested.

Agroforestry allows livestock to benefit from shade and a second food source. Root systems strengthen the ground, and leaf litter boosts the soil. The trees might be harvested or registered for carbon credits, to provide more income.

In addition, it has been found to increase productivity, diversity, and income for farmers, improve the resiliency of agricultural systems and provide more space and habitat for wildlife.

Local councils will decide under the Resource Management Act what land on farms can be used for pine forests.
Agroforestry is targeted under the new proposals with local councils given the autonomy to decide under the Resource Management Act what land on farms can be used for pine forests.
NZ’s net zero pathway relies on trees and forest resilience is key

According to Hall, more than 30% of New Zealand’s gross emissions are offset by forests – “so it’s really a vital lever.”

“All sorts of trees have different virtues. Pinus Radiata is an incredibly fast-growing and fairly resilient tree that can perform really well in a lot of different circumstances – it’s kind of an amazing species in that regard. It provides quick timber – not the best quality timber – and quick carbon sequestration. It’s pretty hard to beat,” he said.

“But that’s not everything we value out of a forest. We also value things like biodiversity, with the cultural connection.”

David Hall explores a vision for a more mixed-use of land in this infographic, adapted from The Interwoven World Te Ao i Whiria, Dr David Hall, The Policy Observatory, AUT June 2018. (Image Credit: Supplied by Dr David Hall)

Increasingly, forest resilience is becoming a key value in environmental, social and governance (ESG).

“Its capacity to adapt to climate-related change, its ability to withstand droughts and extreme weather like major wind events and fires. It’s not clear that monoculture forests of just Pinus Radiata which are all planted at the same time are necessarily the most optimal forest across all of these other kinds of values.”

One of the challenges, Hall said, is working out how to finance forestry.

“If you could, it would teach you real lessons around how to do long-term infrastructure better. Commercial forestry business models have to last over 25 years, but when you’re starting to look at native trees as a commercial crop, for instance – which I think is the right way to go – then you’re talking 50 years plus.”

Reform the ETS to incentivise financial investment in native trees

Hall argues that the problem with the current ETS is that it rewards rapid carbon sequestration at the expense of slower-growing trees.

“A lot of landowners are in a bind because their heart might say that they want native trees, but the wallet steers them towards the pine trees.”

Hall supports the push by the NZ government to look at ETS, is pushing for nature-based solutions – and wants to introduce a complementary economic instrument which rewards biodiversity improvements.

“Native forests could access financial incentives from that because it delivers greater biodiversity value. From a classic approach to public policy, that’s the more rational way of doing it, to create instruments that start to value the specific benefits that different forests deliver.”

The consultation will run until 11 August 2023, and changes could be implemented by early 2025.


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