Seeding the carbon storage opportunity in indigenous forests

Transcription

1 Seeding the carbon storage opportunity in indigenous forests Comments on the draft Climate Change (Forestry Sector) Regulations 2008 Parliamentary Commissioner for the Environment Te Kaitiaki Taiao a Te Whare Pāremata PO Box , Wellington Aotearoa New Zealand 26 June 2008

2 This report and other publications by the Parliamentary Commissioner for the Environment (PCE) are available on the PCE s website: Investigation Team Jennie Francke, Jo Hendy, Shaun Killerby, Geraldine Plas Internal reviewer Kay Baxter Acknowledgements The Parliamentary Commissioner for the Environment and her investigation team would like to thank all those who assisted with the research and preparation of this report. Bibliographic reference Parliamentary Commissioner for the Environment XXSeeding the carbon storage opportunity in indigenous forests. Wellington: Parliamentary Commissioner for the Environment. This document may be copied provided that the source is acknowledged. 2

3 Contents 1 Introduction Environmental benefits of indigenous forests Environmental benefits of forests Indigenous vs exotic forests Carbon returns for indigenous forests Draft Climate Change (Forestry Sector) Regulations Landcare s Carbon Calculator Seeding the opportunity Differentiating indigenous forest species Accounting for the age of manuka / kanuka forests Accounting for rainfall and soil productivity differences Overcoming the age determination difficulty Recommendations Appendix 1: Sample look-up tables for manuka / kanuka forests References...14 Endnotes Tables Table 1: Hypothetical carbon revenue at end of CP Figures Figure 1: Carbon stock accumulation for different forest types

4 1 Introduction One of the common measures in addressing climate change is to encourage the planting of more trees. As highlighted in my recent review of the Scoping report for an environmental assessment of the New Zealand Emissions Trading Scheme and closely related measures 1, afforestation and particularly indigenous afforestation and reversion can have many environmental benefits. My office has analysed how the proposed climate change legislation 2 considers indigenous afforestation and reversion and, whether it can maximise the other environmental benefits of carbon farming. I have given advice to Parliament and to the Climate Change Leadership Forum on those matters. Additionally, this report has been prepared largely in response to the draft Climate Change (Forestry Sector) Regulations 2008 ( the draft regulations ). The report describes the environmental benefits of both exotic and indigenous forestry. It then analyses if the proposed carbon returns for indigenous afforestation and reversion are fair. Finally, it considers possible alternative carbon assessment methodologies and suggests options for a way forward. 2 Environmental benefits of indigenous forests 2.1 Environmental benefits of forests Both indigenous and exotic forests can have many environmental benefits, including: soil conservation and improved/maintained quality; flood mitigation; improved water quality; carbon storage; and enhanced biodiversity. Forests help reduce soil erosion and soil nutrient loss. This is because of their root systems and also because the forest canopy reduces the volume of rain falling to the ground. Additionally, the biomasss available on the ground enhances soil quality. Reduced surface water evaporation in forest ecosystems also protects the soil from drought. By reducing the loss of sediment to rivers in upper catchments, forests decrease flooding risks and help maintain topsoil. Sedimentation contributes to flooding risks as it slowly raises river beds until they are higher than the surrounding land and forces rivers to find new paths to the sea. Forests also mitigate flooding risks is by increasing the time water takes to move through a drainage system, thus reducing peak flows. In addition, forests are also beneficial to freshwater quality as they reduce sedimentation and nutrient loss from the soil. A high nutrient content in freshwater can cause aquatic plants and micro-organisms to grow rapidly. This impacts on the biodiversity and ecosystem services of those water bodies. This phenomenon can be observed in Lake Rotorua and threatens Lake Taupo. 4

5 As forests grow, they remove carbon dioxide from the atmosphere. Forests have a greater mass of living material and therefore have greater capacity to lock up carbon in living tissue than other terrestrial ecosystems (such as pasture). They therefore play an important part in regulating the climate, through carbon storage. Where they replace agricultural or marginal land, both indigenous and exotic forests restore local ecosystem services and provide shelter for numerous and varied organisms. Forests therefore have a positive effect on biodiversity. The maintenance of biodiversity is important beyond its intrinsic value. It shapes New Zealand s identity and upholds our economy via the ecosystem services it provides Indigenous vs exotic forests The environmental benefits described do not occur equally in indigenous and exotic forests. Indigenous forests generally offer greater environmental benefits, while exotic forests can generate some negative environmental effects. An example of a greater environmental benefit is that indigenous forests support more native species than exotic plantations forests 4. They also are a source of traditional foods, such as honey from native flowering trees. Examples of negative environmental effects from exotic afforestation are the planting or spread of wildings on high biodiversity value indigenous ecosystem types such as regenerating forests, tussock and grassland, and the pressure exotic afforestation creates on natural character and some landscapes 5. Additionally, many of the environmental benefits of exotic forests are temporary, as harvest may result in the release of stored carbon, loss of biodiversity, soil destabilisation and increase in the quantity and turbidity of rainwater run-off. Furthermore, when even-age exotic plantations are left to mature on steep country, the roots have the potential to destabilise the soil resulting in trees toppling over. This risk is much lower in the mixed age multi-storey indigenous forests. On the positive side, exotic forests generally store carbon faster than indigenous forests because they grow faster. From a business perspective, this means more carbon revenue in addition to the revenue that is generated from timber sale. From an environmental perspective, this may discourage landowners from considering indigenous reversion or planting on agricultural or marginal land and thus negate the long term environmental benefits that could be achieved. Those environmental benefits are particularly desirable on marginal hill country land where the economic returns from sheep and beef are low and a greater income from carbon storage could be expected. There is particular potential in marginal hill country where manuka has invaded pasture since

6 3 Carbon returns for indigenous forests The proposed Emissions Trading Scheme (ETS) provides an incentive to afforest. The incentive applies to both exotic and indigenous forests planted after Forest owners registered to participate in the ETS will receive tradable carbon units when their forests grow and will be required to surrender units if carbon stock falls, such as when the forest is harvested or burns down. The Climate Change (Forestry Sector) Regulations, due to be passed in 2008 provide a set of equations and look-up tables to estimate the quantity of carbon stored in forests during a given period. 3.1 Draft Climate Change (Forestry Sector) Regulations 2008 The draft regulations propose a carbon assessment method based on conservative look-up tables. The look-up tables (see Schedule 6 of the draft regulations) provide carbon stocks per hectare for various forest types of different ages: Pinus radiata, Douglas fir, exotic softwoods, exotic hardwoods and a single category for all indigenous forest types. The proposed carbon stocks for the exotic forest types account for varying growth rates over their life-time and in the case of Pinus radiata, they also vary by region. In contrast, the proposed carbon stock for indigenous forests (see Table 2 in Schedule 6 of the draft regulations) is a steady sequestration rate of three tonnes/ha/yr. It is significantly lower than most of the proposed sequestration rates for exotic forest. It reflects the fact that while we know that indigenous forests grow more slowly than exotic forests, we have little carbon storage data for many of those forests. It also intends to minimise the challenges inherent in the assessment of the quantity of carbon stored in indigenous forests. These include high verification costs that could be associated with differentiated carbon stock values 6 and risk of overstating aggregate emissions savings. Further research to investigate the actual growth rates of indigenous species and amend the look-up table accordingly is planned 7. In the meantime, based on the draft regulations, indigenous forest landowners who participate in the ETS can only expect returns of three tonnes/ha/yr. 3.2 Landcare s Carbon Calculator Although there is little carbon storage data for many indigenous forest species, Landcare Research ( Landcare ) have developed a Carbon Calculator 8 for manuka (Leptospermun scoparium) and kanuka (Kunzea ericoides) forests. Manuka and kanuka are important hardy indigenous species that can be planted or grow rapidly on sites that are reverting from pasture. They provide a nursery for successive indigenous species. The Carbon Calculator is publicly available on the Landcare Research web site. It is based on data from plot sites around New Zealand 9, and provides estimates of carbon stock per hectare for sites with different soil fertility and rainfall. 6

7 Figure 1 shows the estimated carbon stock accumulation for one hectare of: Pinus radiata forest, as calculated using the draft regulation look-up tables for the Gisborne region (blue line a ); Manuka / kanuka forest, as calculated using the Carbon Calculator 10 (brown lines b : upper line for highest productivity situation 11 and lower line for lowest productivity situation 12 ); and Manuka / kanuka forest, as calculated using the draft regulation look-up tables (red line c ). Figure 1 assumes that all forests began growing in 2008 and were managed as follows: no harvest in the case of manuka / kanuka, and thinning and pruning at around age eight and harvest at age 27 followed by replanting for the Pinus radiata forest. Figure 1 also accounts for the decay of woody debris over the 10 years following harvest of the Pinus radiata forest, as per Table 3 in Schedule 6 of the draft regulations. Figure 1: Carbon stock accumulation for different forest types and various calculation methods 900 Thinning & pruning Harvest Decay of remaining woody debris Carbon stock (CO2e tonnes/ha) Long term carbon stored in pine forest a b c Year Manuka / kanuka regulation Manuka / kanuka calculator range Pinus radiata Gisborne, harvest 27yrs Figure 1 illustrates three points: 1. Pinus radiata forests initially store significant quantities of carbon. Most of this carbon is however released after timber harvesting. As a result, the long term carbon 7

8 stored in harvested Pinus radiata forests is constant, and estimated to be about 200 tonnes of CO2e per hectare in the Gisborne region. 2. Over the medium term of years 13, the quantity of carbon stored in high productivity manuka / kanuka forests can exceed the quantity of carbon stored in harvested Pinus radiata forests. For example, manuka / kanuka reverting on high fertility soil in Taranaki will store more carbon medium term than Pinus radiata growing in Gisborne. 3. The default carbon stock value proposed in the draft regulations underestimates the carbon that can be sequestered (in terms of yearly rate) by manuka / kanuka forests during their early life 14. For example, if a landowner was to fence off one hectare of land having optimal soil fertility and rainfall, and allow it to revert to manuka / kanuka, the site could accumulate 200 tonnes of carbon in a 20 year period. Under the draft regulations, however, the landowner would only be able to claim credits for 63 tonnes of carbon. Table 1 illustrates what this may mean in terms of financial returns over the first Kyoto commitment period ( CP1, ). Table 1 assumes a carbon price of $25 per tonne at 31 December Table 1: Hypothetical carbon revenue at end of CP1, assuming a carbon price of $25 per tonne Assessment method Species Carbon revenue for forests planted in / reverting from Draft regulations Pinus radiata 15 $ $4493 $375 - $1930 All indigenous 16 $375 $375 Carbon Calculator Manuka / kanuka $743 - $1453 $233 - $458 Assumptions a hypothetical CO2e price of $25 per tonne at 31 December 2012; the land is not harvested / cleared during CP1; credits are not claimed before the end of CP1; and manuka / kanuka reversion occurs uniformly. Table 1 shows that one hectare of Pinus radiata forest planted in 1990 could generate carbon revenues of $3280 to $4493 (depending on region) over CP1. In contrast, CP1 revenues for one hectare of manuka / kanuka that has been reverting since 1990 would be $375 under the draft regulations. Revenues for the manuka / kanuka forest could increase to $743 to $1453 (depending on soil productivity and rainfall) based on the Carbon Calculator assessment of carbon stock 17. As a result, despite its potential to achieve both holistic environmental benefits and concrete targets of carbon sequestration, carbon farming in indigenous forests may 8

9 seldom be a competitive economic option in comparison to traditional farming or exotic forestry. This will not encourage landowners to fence off areas of land for regeneration or plant native forests. It may even encourage them to clear indigenous vegetation to plant exotic forests. 4 Seeding the opportunity The carbon stock rate of three tonnes/ha/yr proposed in the draft regulations for indigenous forests is a conservative value. It is accepted as an appropriate default value that can be applied across the country in cases where little information is known about the indigenous species considered. In the case of manuka / kanuka forests, the Carbon Calculator can provide carbon stock values that are more accurate than those proposed in the draft regulations. This section explores how the draft regulations may be amended in order to better reflect the actual carbon sequestration rates of indigenous forests, while not prohibitively increasing administration costs. Details of how the carbon stock assessment options discussed below could be presented in a look-up table are provided in Appendix Differentiating indigenous forest species The carbon stock assessment method prescribed in the Climate Change (Forestry Sector) Regulations could differentiate manuka / kanuka forests from other indigenous forests. As illustrated in section 3 above, some indigenous species (such as manuka and kanuka) store significantly more carbon in their early life than calculated using the one constant carbon sequestration rate proposed in the draft regulations. There is sufficient information available on the carbon sequestration rates of manuka / kanuka forests to differentiate those from other indigenous forests in the draft regulations look-up tables. This would enable the owners of such forests to earn fairer carbon returns, at little (if any) additional cost. Sections below present three options for carbon stock assessment in manuka / kanuka forests. 4.2 Accounting for the age of manuka / kanuka forests National carbon stock values for manuka / kanuka forests could be based on the most conservative carbon sequestration rates determined for a given forest age with the Carbon Calculator. The Carbon Calculator provides estimates of carbon stock per hectare for sites with differing amounts of soil fertility and rainfall. The most conservative carbon stock estimates are based on a low productivity scenario. They are a more accurate reflection of the actual carbon sequestration rates of manuka / kanuka forests than the 9

10 default rate proposed in the draft regulations. They could therefore be used in the regulations, without risk of overstating aggregate emissions savings and provide fairer carbon revenues to those who own manuka / kanuka forests. The carbon stock per hectare could be determined on an age class basis, based on the most conservative carbon stock estimates of the Carbon Calculator. 4.3 Accounting for rainfall and soil productivity differences The Ministry of Agriculture and Forestry (MAF) should consider whether it is possible to determine spatially variable carbon sequestration rates for manuka / kanuka forests of specific ages. This spatial variation could be based on the combination of Landcare carbon calculations and LENZ rainfall and soil productivity data. Figure 1 above illustrates that the carbon stored by manuka and kanuka forests varies significantly depending on soil productivity and rainfall. The Land Environments New Zealand database (LENZ) contains nation-wide maps of average rainfall and soil productivity. Using the Carbon Calculator, it is possible to determine the carbon sequestrated by manuka / kanuka forests of a given age and cover in given rainfall and soil productivity conditions. As a result, it may be possible to divide the country into several rainfall and soil productivity zones and apply customised carbon stock values for manuka /kanuka forests of a given age in those zones. 4.4 Overcoming the age determination difficulty MAF could consider having two separate look-up tables: one for existing manuka / kanuka forests and one for new manuka / kanuka forests. Sub-sections 4.2 and 4.3 above refer to indigenous forests of a given age. The age of reverting manuka / kanuka forests may be difficult to determine and verify. In order to overcome this difficulty, the regulations could differentiate between two types of manuka / kanuka forests: existing forests of an unknown age, with carbon stock values based on the average growth rate for the first 23 years (representing the age range of post forests by the end of CP1); and new forests of a known age, with carbon stock values derived from the Carbon Calculator. 5 Recommendations The Emissions Trading Scheme provides an incentive to plant forests. The incentive applies to both exotic and indigenous forests planted after 1989 but unequally. This is due to differences in estimated carbon sequestration rates. Those differences partly reflect the fact that indigenous forest species generally have a slower growth rate than exotic forest species. 10

11 However the constant carbon sequestration rate proposed in the draft regulations significantly underestimates the growth rate of some indigenous species (such as manuka and kanuka). This discrepancy between actual and estimated carbon sequestration rates may discourage the planting or reversion to indigenous forests, at the expense of land remaining marginal or being forested by exotic species. It may even encourage the planting of exotic forests in existing high biodiversity areas. A fairer carbon stock assessment method could encourage the planting of or reversion to indigenous forests, thus achieving enhanced environmental co-benefits. I am concerned that the draft regulations could capture the carbon sequestration rates of indigenous forests more accurately. I therefore recommend that MAF: investigate how the regulatory carbon stock values for indigenous forests could be modified to better capture actual carbon sequestration rates; and amend the draft regulations accordingly. Avenues of investigation could include whether Table 2 in Schedule 6 of the draft regulations could be customised to differentiate the carbon sequestered by manuka / kanuka and other indigenous forests. The following options to determine the carbon stock per hectare for manuka / kanuka forests could be considered: national carbon stock values based on the most conservative carbon sequestration rates determined for a given forest age with Landcare s Carbon Calculator; spatially variable (perhaps aggregated to broader regions) carbon stock values for specific ages based on the combination of Landcare s Carbon Calculator and LENZ rainfall and soil productivity data; and differentiated carbon stock values, depending on whether the age of manuka / kanuka is known (well documented or post 2007 planting or reversion) or unknown (undocumented or pre-2008 planting or reversion). Details of how those carbon stock assessment options could be presented in a look-up table are provided in Appendix 1. Manuka / kanuka forests often contain other species and do not revert evenly across a site. The further development of the above options for inclusion in the regulations would need to consider these issues 18. The proposed options offer estimates that are fairer than the default rate of the draft regulations. They seek to achieve a pragmatic balance between accurate assessment and implementation costs, and therefore remain conservative. As research continues, more accurate carbon stock assessment methodologies for indigenous forests should be considered for inclusion in the regulations when they become available. 11

12 Appendix 1: Sample look-up tables for manuka / kanuka forests The options presented in sections of this report for carbon stock assessment in manuka / kanuka forests could be presented as follows in regulatory look-up tables. The sample look-up tables below are illustrative. They do not aim to represent the whole life span of forests or to provide definitive figures for inclusion in the regulations. 1. Sample look-up table for national carbon stock values based on the most conservative carbon sequestration rates determined for a given forest age with Landcare s Carbon Calculator. Sample table A: Carbon stock per hectare for Douglas Fir, exotic softwoods, exotic hardwoods, manuka / kanuka and other indigenous forests in tonnes CO2e. Age Douglas Fir 19 Exotic Softwoods 19 Exotic Manuka / Hardwoods 19 kanuka 20 Other indigenous forests Spatially variable (perhaps aggregated to broader regions) carbon stock values for specific ages based on the combination of Landcare s Carbon Calculator and LENZ rainfall and soil productivity data. 12

13 Sample table B: Carbon stock per hectare for manuka / kanuka planted (or reverting) in LENZ category 5 soil (high fertility) in tonnes CO2e 21 - age of forest is known. Age 22 Manuka / kanuka carbon stock (tonnes CO2e) on land with soil fertility 5 (highest) Rainfall mm Sample table C: Carbon stock per hectare for manuka / kanuka planted (or reverting) in LENZ category 1 soil (low fertility) in tonnes CO2e age of forest is known. Age 22 Manuka / kanuka carbon stock (tonnes CO2e) on land with soil fertility 1 (lowest) Rainfall mm Differentiated carbon stock values, depending on whether the age of manuka / kanuka is known (well documented or post 2007 planting or reversion) or unknown (undocumented or pre-2008 planting or reversion). Sample table D: Carbon stock per hectare for reverting manuka / kanuka in LENZ category 5 soil (high fertility) in tonnes CO2e age of forest is unknown. Rainfall mm Yearly carbon rate (tonnes CO2e) on land with soil fertility 5 (highest) for manuka / kanuka of unknown age 23 Sample table E: Carbon stock per hectare for reverting manuka / kanuka in LENZ category 1 soil (low fertility) in tonnes CO2e age of forest is unknown. Rainfall mm Yearly carbon rate (tonnes CO2e) on land with soil fertility 1 (lowest) for manuka / kanuka of unknown age 23 13

14 References Carnus J-M., Parrotta J., Brockerhoff EG., Arbez M., Jactel H., Kremer A., Lamb D., O Hara K. and Walters B Planted forests and biodiversity. In: Conference papers of the United Nations Forum on Forests intersessional experts meeting, New- Zealand: March [Accessed 23 June 2008] Cawthron Institute Scoping report for an environmental assessment of the New Zealand Emissions Trading Scheme and closely related measures. Cawthron Report No Department of Conservation (DOC), Ministry of Agriculture and Forestry (MAF), Ministry for the Environment (MFE) and Ministry of Fisheries (MFish). Why we value biodiversity. Wellington: DOC, MAF, MFE and MFish. [accessed 17 June 2008] Landcare Research Carbon Calculator. x [18 June 2008] Office of the Parliamentary Commissioner for the Environment (PCE) Review of the scoping report for an environmental assessment of the New Zealand Emissions Trading Scheme and closely related measures. Wellington: PCE. Trotter C. (Landcare Research). 10 June Re: General enquiry: QA. to S. Killerby (Office of the Parliamentary Commissioner for the Environment). 14

15 Endnotes 1 Cawthron Institute, Climate Change (Emissions Trading Scheme and Renewable Preference) Bill [Accessed 23 June 2008] and draft Climate Change (Forestry Sector) Regulations Regulations-2008.pdf [Accessed 23 June 2008] 3 DOC et al. 4 Carnus et al., Office of the Parliamentary Commissioner for the Environment, Costs could for example arise from the determination of forest age and species composition. 7 Commentary on the exposure draft of the Climate Change (Forestry Sector) Regulations, including an overview of other aspects of the Emissions Trading Scheme. [Accessed 18 June 2008] 8 Landcare Research, The calculator has a slight bias towards Gisborne growing conditions in that approximately half of the measurement plots are in that region. [C. Trotter, Landcare Research, pers. Comm., 10 June 2008] Considering that Gisborne is in a relatively low soil fertility and rainfall area of the country, this bias leads to underestimated carbon stock values. This means that, despite the bias, the calculator is an appropriate tool to estimate conservative carbon stocks on a national scale. 10 It has been assumed that reversion of manuka / kanuka occurs uniformly. 11 Calculator calibrated for sites with high soil fertility (LENZ soil category 5) and high rainfall (1500mm per year) - upper bound for carbon accumulation. 12 Calculator calibrated for sites with low soil fertility (LENZ soil fertility category 1) and low rainfall (800mm per year) - lower bound for carbon accumulation. 13 In the long term the cycle of growth and decomposition reaches equilibrium in most forests, resulting in an approximately balanced uptake and release of carbon. 14 That is the slopes of the brown curves b are greater than the slope of the red curve c during the early life of the manuka/ kanuka forest (the first 30 years approximately). 15 Lower bound-upper bound based on regional variability of carbon sequestration rate. 16 Lower bound-upper bound based on variability in soil productivity and rainfall. 17 Those examples do not account for registration and verification costs. 15

16 18 This could be accounted for in the definition of what constitutes a manuka / kanuka forest or through the inclusion of a homogeneity corrective factor. 19 Values as per the draft regulations. 20 Values as per the most conservative carbon sequestration rates determined for a given forest age with the Landcare Carbon Calculator. 21 Values determined as per the Carbon Calculator applied to different rainfall and soil fertility rates. 22 Age is calculated based on the year since reversion began / planting. 23 Constant carbon sequestration rate based on the mean carbon sequestration rate estimated with the Carbon Calculator and averaged over the first 23 years of life of the forest (23 years represents the age range of post-1989 forests by the end of CP1). 16