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The financial implications of different afforestation regimes in the Hawke’s Bay

Authors: Andrew Clarke
Publication: New Zealand Journal of Forestry, Volume N.Z.J.For. 2020, Issue N.Z.J.For. 65(2) 2020, pp 9-15, Aug 2020
Publisher: New Zealand Institute of Forestry

Abstract: It is a significant challenge to encourage large-scale afforestation whilst ensuring the right tree is planted in the right place for the right purpose. It is recommended that interventions such as targeted financial assistance, industry and infrastructure support are implemented to minimise unintended consequences and achieve financial, community and ecosystem service benefits. The financial success of afforestation on a given site is determined by species and regime selection, by the scale of afforestation, and by site-specific factors such as terrain, access to mills and ports, plantable area and accessibility. Eligibility for One Billion Trees Programme (1BT) funding has a significant effect on reducing establishment costs and increasing revenues for non-radiata pine options. Eligibility for carbon credits in the Emissions Trading Scheme (ETS) will vary from site-to-site and is a key economic contributor to returns and provides a major economic incentive for planting trees. In most situations in the Hawke’s Bay, radiata pine provides the highest returns. Other species, however, have inherent benefits that will improve their relative value on specific sites and that can be an attractive option when combined with incentives. An afforestation feasibility assessment can be conducted to compare returns and other benefits for a range of forest systems on a specific site. The level of incentive to encourage alternative exotic or native species can also be determined. Individual landowners need to find the financial case for afforestation compelling. Achieving specific regional outcomes is likely to require targeted investment incentives to support landowners and communities.