The impact of carbon credits on New Zealand Radiata pine forestry proftability

Authors: David Evison
Publication: New Zealand Journal of Forestry, Volume N.Z.J.For. 2008, Issue N.Z.J.For. 53(1) 2008, pp 42-44, May 2008
Publisher: New Zealand Institute of Forestry

Abstract: The Emissions Trading Scheme (ETS) was implemented by the New Zealand Government on January 1, 2008, with forestry as the first (and to date, only) industry participating. It is therefore timely to examine potential financial impacts of the ETS on Radiata pine forestry in New Zealand. The government’s intentions in introducing the ETS are clear: “…The government wants…forestry to help mitigate climate change by removing carbon dioxide from the atmosphere...We believe…[the ETS]…provides the most flexible, fairest [sic] and comprehensive approach to addressing the many challenges that climate change presents…It also allows foresters to capitalise on the business opportunities climate change provides…” (MAF, 2007). The ETS, and therefore this analysis, applies to “post- 1989 forests”, also called “Kyoto-compliant” (i.e. those planted from bare land after 1989). However the analysis also provides an insight into the opportunity costs of the arbitrary distinction between “post-1989” and “pre-1990” forests. As at 1 April 2006 there was a total net stocked area of 1.8 million hectares (MAF 2007a), of which about 680 000 hectares are classified as “post-1989” forest.