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  • Writer's pictureClimate Action Co

How to Restore Native forests in Aotearoa at Scale: NZ Herald op-ed

Updated: Mar 31, 2023

Climate change is the greatest challenge of our time. Native forest restoration is the largest weapon we have in the climate fight. So why is there no national incentive to restore native forests?

Our national forestry strategy has completely failed as is evident in the recent flooding devastation, slash damage and over the last year with the rise of pine carbon farming. It’s time for natives to make a comeback.

Of New Zealand’s 26.8 million hectares, 21 million hectares used to be covered in native forest, that’s now just 7.8 million hectares, most on the South Island's West Coast. Less than 2% of the Canterbury Podocarp forest remains. New Zealand has potential for at least five million hectares of new native forest which will draw down millions of tonnes of carbon per year.

The scale of funding required to restore millions of hectares of native forest is in the order of billions.There are three ways we can finance native forest restoration; philanthropy, government funding and carbon credits.

Philanthropy has been the largest source of funding for native forest restoration to date and has limited scalability.

Direct government funding for native forest restoration on the order of magnitude required will be politically unpopular, limited in scale compared to carbon crediting and less efficient than market-driven restoration.

The carbon crediting space is complex, with many different opinions on carbon credits and the emissions trading scheme (ETS). I believe with a few key reforms the emissions trading scheme and the voluntary carbon market can work together to fund native forest restoration at scale.

First I want to make something clear, we must reject the idea of carbon ‘offsetting’ or granting a right to pollute (hyperlink to blog post). We need rapid societal transformation for emissions reduction. However carbon crediting, the process of pairing high-quality nature-based carbon removals with emissions will simultaneously enable carbon sequestration at scale in native forests and motivate emissions reductions.

Here are the key changes we need

1. Quickly cut the free allocation of credits given to businesses in the ETS. Putting a price on emissions is the best incentive for a business to reduce emissions.

2. Exclude pines from the permanent category in the ETS and include other carbon removal like pre-1990 native sequestration, blue carbon (carbon captured by the ocean and coastal ecosystems) and other currently non-ETS eligible native sequestration. We should strongly support a more sustainable timber industry for carbon-positive buildings but not solely for carbon.

3. Set future targets for the ETS to not only account for 100% of society carbon emissions but targets of over 100% to make society carbon positive due to the need to draw down historical emissions. I personally think we need to aim for the 150% mark by 2050.

4. Set clear guidelines for NZU’s to be used as voluntary carbon credits. Native NZU’s should be recognised as a unit of sequestration that can be canceled against a unit of emissions to reach net zero. The voluntary carbon market represents a significant opportunity for NZ as an export industry. We currently have a large import deficit from low quality emissions reduction projects overseas. Foreign companies paying NZ farmers to restore natives is a win win.

5. NZ has a loophole that allows the foreign ownership of farms for a forestry purpose thanks to Winston Peters. Let’s fix this.

Currently the ETS sends around $2 billion towards incentivising afforestation per year. Almost all for pines. Imagine if we channeled this $2 billion into natives instead. This total value could be further increased significantly by decreasing the free allocation for emitters, reallocating the government ETS revenue to restoration and through a higher ETS price.

By pairing the price of emissions to a sequestration incentive we simultaneously motivate emissions reduction and carbon sequestration. If we did this for all carbon emissions in society we would reach net zero carbon emissions. I am a strong advocate for this approach, letting the market pair each unit of emissions with a unit of sequestration to deliver the most efficient outcomes.

This approach using carbon crediting to pair emissions with sequestration does not require any taxpayer funding and aligning these market mechanisms will ultimately motivate more emissions reduction than any government programme while facilitating massive-scale native forest afforestation.

Using carbon credits to incentivise the land to regenerate via pest control, stock exclusion, control of woody weeds and supplementary planting is our greatest tool to combat the climate crisis in New Zealand.

If we reformed the ETS in line with these suggestions, we could get New Zealand to net zero carbon by 2040 and incentivise massive scale native afforestation on marginal land.

This would not only protect our waterways, enhance biodiversity and protect against extreme weather, but channel long term funding to farmers which will rejuvenate rural communities.


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