Forestry Scrutinised by the Climate Change Commission

The Climate Change Commission (CCC) has released a draft report with recommendations for New Zealand’s second emissions reduction plan, covering 2026-2030. The CCC is one of New Zealand’s key tools in monitoring and limiting climate change effects under the Climate Change Response (Zero Carbon) Amendment Act 2019. The CCC provides independent, expert advice to relevant Ministers and government entities including in relation to the Emissions Reduction Plan, which works in tandem with the emissions budget to steadily reduce New Zealand’s emissions to zero by 2050.

The CCC has made recommendations for most industries that are part of the Emissions Trading Scheme (ETS) as well as the ETS itself. The CCC recommendations include, but are not limited to:

• Advance the agricultural emissions pricing system to enable recognition of a broader range of emissions-reducing practices and technologies, and to incentivise gross emissions reductions in line with the 2050 target.
• Implement an integrated planning system that builds urban areas upward and mixes uses while incrementally reducing climate risks.
• Prioritise and accelerate renewable electricity generation build and ensure electricity distribution networks can support growth and variability of demand and supply.
• Prohibit the new installation of fossil fuel gas where there are appropriate alternatives.
• Develop incentives to accelerate the uptake of zero emissions commercial vehicles, including vans, utes, and trucks.
• Rapidly resolve the barriers to scaling up vehicle charging infrastructure.

We have focused on the recommendations for the forestry industry as this was the most criticised by the CCC.

Forestry

In New Zealand there are 10.1 million hectares of forest, of which 8 million hectares is native trees and 2.1 million hectares is exotic trees. Of the exotic production forestry, 90% are Radiata Pine. The report explains that exotic trees are favoured for their fast growing rate and fast sequestration of carbon. However, it states that their sequestration rate declines at around 20 years. In comparison, native trees take longer to grow, but continue sequestration for hundreds of years and therefore are a better option for long-term carbon sinks.

The CCC states that an overreliance on carbon storage in forests to reduce gross emissions is risky. Furthermore, that there is a lack of direction and objectives in the amount and type of forests that will achieve the 2050 target. It says that there is an opportunity to articulate the role of forestry and how it will aid in achieving emissions budgets and targets, and to determine what type of forests to plant and where. It raises concerns around the risk of rapid and unmanaged exotic afforestation on productive sheep and beef farmland, and on land that is exposed to erosion and run off.

The CCC warns that if exotic forestry continues to be heavily relied upon as a way to meet emissions reduction targets then it will reduce land flexibility and future generations will bear the burden of reducing gross emissions. They also say that if damaged forests are not replaced then carbon dioxide emissions will increase again.

Therefore the CCC recommends that the emissions reduction plan sets and implements objectives for the role of forests with respect to emissions mitigation and adaptation, while giving effect to the principles of Te Tiriti o Waitangi. In relation to the ETS, the recommendations also include implementing an amended ETS that separates the incentives for gross emissions reductions from those applying to forestry, and developing an approach that can provide durable incentives for net carbon dioxide removals by forests through to and beyond 2050. If these recommendations are implemented by the Government then there could be far reaching economic effects to the forestry industry.

The next steps

The CCC finalised advice is due to the Government by 31 December 2023. The Government will then consider the finalised advice before setting the second emissions reduction plan at the end of 2024. The second emissions budget period starts on 1 January 2026.

Consultation is open until 20 June 2023 and can be submitted here. Please get in touch if you would like to discuss the CCC recommendations or would like to make a submission.