On 12 December 2015, 196 countries agreed terms for a legally binding Paris Climate Agreement¹. The agreement will come into force on 22 April 2016 if 55 countries, comprising at least 55% of global emissions, ratify it. Initially, there was little optimism that an agreement could be brokered; the fact one was, illustrates how concerned governments, business and non-government agencies are about the effects of rising global temperatures.

Key aspirations of the agreement include:

• holding the increase in the global average temperature to below 2°C above pre-industrial levels, and endeavouring to limit it to 1.5°C
• for parties to reach global peaking of GHG emissions as soon as possible and undertake rapid reductions thereafter
• each party to prepare and maintain successive Nationally Determined Contributions (NDCs) that it intends to achieve
• parties formulate long-term low GHG emission development strategies that account for individual national circumstances
• parties communicate their NDCs with clarity, transparency and understanding.

New Zealand’s NDC is to reduce national 2005 GHG emissions by 30% by 2030, or about 11% below 1990 levels.

Greater emission reduction efforts will be required to achieve these objectives than those associated with the Intended Nationally Determined Contributions (INDCs) stated in the Draft Agreement. Furthermore, parties to the agreement whose INDC has a time frame of 2030, will be required to communicate or update these contributions by 2020, and do so every five years. This is important stuff for signatory countries!

Figures released recently by the Ministry for Primary Industries showed only 3,000 hectares of new forest were planted in 2015, and the total area of planted forest fell by 16,000 hectares². About 1,000 tonnes CO₂e per hectare are stored in a mid-rotation radiata pine forest, therefore deforestation adds to New Zealand’s greenhouse gas reduction target. But with agriculture contributing 49% of total emissions, and currently outside the Emissions Trading Scheme (ETS), deforestation effects must be bolstered by the transport and energy sectors, or by buying offshore carbon credits.

Scion recently investigated whether forests converted to dairying in the central North Island would increase export earnings³. Using average prices for the 10 year period to 2014/15, and an area of 28,000 hectares, we estimated manufactured exports to be $161 million per annum for forestry and $193 million for dairy (including meat). However, this difference was minimised by the cost of GHG emissions and leached nitrogen (up to $31 million credit to forestry and up to $18 million cost by dairy).

The point to consider is that smart economic growth should account for environmental and social considerations to get the best long-term national outcome. Furthermore, land-use decisions should ideally optimise the respective strengths and weaknesses of particular enterprises, for example livestock produce emissions; forests sequester carbon dioxide and leach little nitrate in waterways.

I, and others⁴, have written previously that an ETS carbon price around $12-15/tonne CO₂e will incentivise plantation and permanent forest plantings. Scion’s modelling indicates that if the maximum afforestation rate achieved during the 1990s was sustained until 2030, just over 1 million hectares of new planted forest could be established, with modest effect on food production if this was on currently under-utilised Maori  land. Sequestration by these new forests in 2030 would be 23.6 Mt CO₂e, offsetting 52% of non-agricultural emissions or 28% of total emissions in 2030. Forest biomass could also play a major role in reducing emissions from industrial heating and increase New Zealand’s energy security.

A major co-benefit of tree planting will be increased log (wood fibre) security for wood processors. Northland wood processors recently lamented their inability to source suitable quality logs. It will be much tougher for them in the early 2030s unless deforested land is replanted, and new areas are forested, from this winter.

If the total area of forested land is increased, New Zealand has a good chance of meeting its 2030 NDC. Water quality would improve, biodiversity increase, extra Maori land would be generating wealth, livestock farmers’ nutrient limits could be less onerous, mill owners would be happier and export earnings would likely not be less than those otherwise earnt from livestock. This seems a good formula to me!

I welcome your comments on this topic or any of the other articles in this edition of Scion Connections.

Dr Warren Parker
Chief Executive

¹ See https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf
² See http://www.nzfoa.org.nz/news/foa-news/foa-media-releases-2016/1520-230216foanews
³ Monge, J.; Velarde, S.; Yao, R.; and Pizzirani, S. 2015. Identifying Complementarities for the Dairy and Forestry Industries in the Central North Island. Scion report to Oji Fibre Solutions and Waikato Regional Council (October).
⁴ Clark, P. Forestry and the Emissions Trading Scheme, Wood Matters, December 2015, http://nz.pfolsen.com/market-info-news/wood-matters/2016/february/forestry-and-the-emissions-trading-scheme/