Kiwi trees a green army

Sustainability requires a balance between economic, environmental and social needs. Which raises the question: how can land use change in New Zealand help achieve improved sustainability?

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Simple actions such as planting additional trees can help achieve environmental goals but this will only be truly sustainable if done in a way that also meets the social and economic needs of rural communities in New Zealand.

"New Zealand’s greenhouse gas profile differs considerably from other nations, with agricultural emissions making up nearly half of the total output.”

The New Zealand Government is promoting forestry as a tool to help meet climate change obligations. Planting additional trees will act as a carbon soak, mitigating greenhouse gas emissions from other sectors.

But planting more forests is simply considered a bridge; a way to buy time until effective and efficient ways to reduce New Zealand’s carbon dioxide (CO₂) emissions are found.

New Zealand’s greenhouse gas profile differs considerably from other nations as agricultural emissions make up nearly half of the total output. In addition, livestock emit considerable levels of the greenhouse gas methane.

In most other countries emissions are mainly CO₂ (the greenhouse gas produced by the use of fossil fuels).

New Zealand’s Climate Change Response (Zero Carbon) Amendment Bill introduces long-term targets for reducing gas emissions. Under the bill, short-lived gases such as methane will be treated differently to long-term gases like CO₂ and nitrous oxide.

However, the 2050 methane emission reduction target is more ambitious than may actually be required to stabilise climate change to the degree targeted, causing push-back from primary sectors.

The targets for methane emissions are still somewhat ambiguous as they will be revised by the newly established Climate Change Commission in 2024. By that time, development in scientific research and modelling capability should mean emissions can be evaluated at the individual farm level.

In the interim, emissions costs are likely to be met at the processor level, with costs then allocated to farmers through levies. This will reduce farm income levels but provides no direct incentive to reduce on-farm emissions.

While the optimal treatment of agricultural emissions remains so challenging, clear incentives exist to increase the quantity of trees being planted to reduce the required fall in emissions. Policy changes, grants towards planting costs and the opportunity to gain revenue from carbon credits will all create incentives for more trees to be planted.

Support from farmers is required to switch some land currently used for grazing to forestry. Ideally this would occur through pockets of plantings on grazing properties, rather than complete conversion of farms to forestry, which could have negative economic and social impacts for rural communities.

New Zealand has three greenhouse gas (GHG) emission reduction targets. They are:

  • 2020 target to reduce emissions to 5 per cent below 1990 levels;
  • 2030 target to reduce emissions to 30 per cent below 2005 levels; and
  • 2050 target to reduce emissions to 50 per cent below 1990 levels.

At this stage, New Zealand is on track to meet the 2020 target, but achieving the later-dated targets will require a significant reduction in emissions and/or a significant increase in carbon sinks, such as land in forestry.

Emission reduction targets for agricultural methane reductions are expected to be revised by the Climate Change Committee in 2024.

Susan Kilsby is Agricultural Economist and Sharon Zollner is Chief Economist NZ at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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