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Out on a limb: How to fix New Zealand's flawed forestry policy

Shane Jones. Image/Getty Images/Listener illustration

Shane Jones’ megaphone diplomacy in the cause of his Billion Trees has run smack into the still-controversial decision to rely heavily on carbon-sink forests to mitigate the country’s greenhouse-gas emissions.

Regional Economic Development Minister Shane Jones is openly surprised to find himself somewhat backfooted on what initially looked like an almost-cornily good-news policy: more trees.

Concerted earbashing from farmers during this June’s Mystery Creek Fieldays, about the growing trend in premium farmland being sold for forestry, and the widespread impression that it’s the result of state subsidy, has already triggered a backtrack. Jones, who is also Forestry Minister, and Agriculture Minister Damien O’Connor immediately called a press conference offering conciliatory changes and promising more monitoring of farm sales.

Jones’ forestry officials have had to go back to the drawing board to reconsider the parameters of his One Billion Trees Programme, and he may yet have to make a pitch to Cabinet colleagues for changes to the Climate Change Response (Zero Carbon) Amendment Bill and its emissions trading scheme (ETS) about rules for carbon-sink forests.

Macro alias: ModuleRenderer

“That’s the tiger I’ve got by the tail,” he says, wonderingly. “What we thought we were doing [with the Billion Trees] was encouraging the investment in forestry in those parts of the landscape that really need to go back into trees – right tree, right place.”

The policy, and the ETS, he now says, “might be a bit undercooked”.

Jones’ megaphone diplomacy in the cause of more forestry has run smack into the still-controversial decision to rely heavily on carbon-sink afforestation to mitigate the country’s greenhouse-gas emissions. Billion Trees is not the same policy and has a different purpose – regional jobs and growth and better land use, rather than greenhouse-gas mitigation. And foreign investors in carbon-sink forestry cannot get grants or subsidies through the Billion Trees programme. But there’s enough in the middle of the Venn diagram between the two categories of forest to have generated quite a storm.

Where there are dairy cows, will there be trees? Photo/Getty Images

The immediate political peril is that the incentive to carbon farm through forests will become so great – the Productivity Commission’s low-emissions report envisaged carbon pricing at $200 or more a tonne, and other expert projections as high as $300 – that productive land will increasingly be turned over to Pinus radiata. The commission predicted “marginally profitable” farmland would be converted. The farm sector worries that we’re beyond the margins already. New lobby group Fifty Shades of Green, formed to contest the Government’s forestry push, estimates 30,000ha of farmland has been sold into forestry in the past year.

North Island forestry land prices have risen from $6656 a hectare to $13,128 in the year to April, a further symptom of carbon-forest investors outbidding farmers.

Just to further steer investment towards good farmland, the Government was forced to effectively “red zone” about 7% of the landscape against forestry after the Tolaga Bay floods disaster last year, when debris from recent forestry felling caused catastrophic damage. It’s as though one perfect storm has reached forward through time to create another. The forests were planted in part to remediate the district’s serious erosion problems, highlighted by the ravages of Cyclone Bola 30 years earlier. The forestry fix now stands to become an annual problem, given likely increased rainfall. The Government’s solution has been to ban forestry on marginal land, thus increasing the likelihood of investors converting productive land to forests.

David Parker. Photo/Getty Images

Soil protection rules

And another thing: Environment Minister David Parker is planning a crackdown on land-use rules in a bid to protect specially productive soils. Since last year, he has been working on a National Policy Statement that could potentially prevent some productive land going into forestry – but not, as farmers perceive it, in time to stop an escalating number of conversions already afoot, which the nation could later regret.

As always, a hot-button issue is foreign buyers. The loosening of Overseas Investment Office criteria for forestry investment has not, as Jones says, brought forth a Klondike-like rush, but the rural community is pretty convinced it will.

For the Opposition, every day’s a field day as it finds more evidence of forestry indiscriminately supplanting agriculture. National’s agriculture spokesman Nathan Guy says the Government seems indifferent to the loss of good productive land. Aside from the obvious potential cost to the economy, the conversions are already “hollowing out” local communities, as farms are permanent employers and much more intensive than forests. If just four farms go in a district, the consequences can be enough to tip its overall viability; its ability to attract the likes of teachers, vets and doctors.

Todd Muller. Photo/Supplied

National’s climate-change spokesman, Todd Muller, says the party is hardly opposed to greater forestry. “And it’d be fantastic if we could get to the point of exporting more wood products.” But National believes the Government’s approach will be damagingly disruptive to the rural economy and fail to give the agriculture sector credit for already being the world’s most emissions-efficient.

A further fear is that in a few decades, overseas investors could move on without accountability for land or forest remediation, leaving a sizeable proportion of New Zealand’s land saddled indefinitely with tracts of depleted or dying, uneconomic forestry.

Jones says he understands why farmers are telling him it’s unfair that their legacy sector will be sacrificed so that the likes of Air New Zealand and Shell can offset their emissions. “Of course, they are also coming from a position of self-interest. At the same time, the cockies won’t want the Government telling them who they can sell their land to. They’ll want to get the best price.”

Nathan Guy. Photo/Supplied

But if Jones wants to recalibrate the Billion Trees’ settings, let alone the hard-won coalition decision that forged the ETS, he has to please what is possibly a tougher crowd than the rural lobby: the Cabinet committee that oversaw the policies. Neither Parker, also Labour’s Economic Development Minister, nor Green ministers James Shaw and Eugenie Sage are noted for their receptivity to special pleading from the farm sector in the face of climate-change transitional pain. The fifth member is O’Connor, whose nickname, Jones notes, is “Minister Chainsaw”.

Still, reluctant as they might be to soften or change any of the courses they’ve set in this intensely complex policy area, the political risk is considerable. The farmland-conversion issue is just one potentially perverse incentive that, between Billion Trees and the ETS, could bedevil the Government’s best intentions. The trade-offs already made sit badly with many MPs. There is a sinking cap on allowable emissions. Major emitters in the economy – the Major Energy Users Group, which includes Pacific Aluminium, Lion, Fonterra and Ravensdown – thus have a reducing allocation, but say if the carbon and electricity pricing and/or time-frame are squeezed too hard, their bosses will simply move what activities they can from New Zealand, but that won’t mean they emit less. We could get our emissions down that way, but not the planet’s.

Like a cat mithering at the front door, farmers are ambivalent over whether to be in or out, resistant to being made to join the ETS, mutinous about methane policy, but indignant that they can’t get the benefits of their considerable plantings to offset the methane emissions from their farm.

One of the Government’s new concessions is to look at letting farmers aggregate their plantings for carbon-accounting purposes, so shelter belts, riparian planting and shady, hilly parts of farms can be counted. Mānuka now also qualifies for the Billion Tree grants, combining valuable nursery qualities with its lucrative honey by-product.

Julie Collins. Photo/Supplied

As O’Connor says, there’s probably not a single farm that wouldn’t benefit from having more trees. Of New Zealand’s 8.6 billion hectares of sheep and beef farmland, 1.4 billion are already planted in forestry and scrub. Since the new grants scheme started in November, money has been allocated to 54 applicants for 2200ha more, and there are nearly 100 applicants in the pipeline.

These are mainly smallish plantings and mainly natives. For practical reasons such as seedling availability and growing conditions, the exotic-native mix is expected to be the reverse of the intended one-third/two-thirds ratio, but Te Uru Rākau (Forestry New Zealand) chief executive Julie Collins has said grants will nevertheless continue to be skewed towards natives.

Her ministry is also urgently working with the real-estate sector to gather real-time data on farmland sales.

The ETS, however, has had a long and painful political gestation. The Government’s blunt political calculation may be that big business and farmers don’t vote Labour or Green anyway, so the temptation is to tough out the criticism.

But Jones’ New Zealand First’s voter heartland is the provinces. It can’t afford to get further offside, and nor can the other two parties be as electorally comfortable if NZ First isn’t re-elected.


Bicultural country

The Government might steel its nerves to disrupt $45 billion of agricultural exports, from 50,000 farmers who generate 300,000 jobs. But what might tweak Labour and Green antennae are the overall social and conservation effects of potentially letting forestry get out of whack with other sectors and environmental factors.

Wairoa Mayor Craig Little has spoken of his fears that this supposedly bicultural country will come to be dominated by “monocultural” pine trees and magpies, and conservation groups have also expressed misgivings.

Jones admits insufficient thought has gone into such issues.

“The deeper question is, if carbon-forest investment is going to roll out, ought there not be a mixed regime so we don’t lose [productive land]? I think people would prefer to see forestry working with farmers. We don’t have a regulation in mind for preventing them or making them work together.

“Do we have a situation where carbon farmers have to integrate native trees in their plan? It’s not Government policy, but [forestry officials] are looking at that. At the moment, it’s unfettered. Subject to compliance with land use, you can plant the whole thing in pine trees and if you want carbon sooner rather than later, your choice is [much faster-growing] pine trees. So I accept for a lot of cockies that is a hard thing to compete against.”

The next battleground is the ETS’s select committee, likely starting within weeks. Jones is urging all his critics to make their case there, saying he is open to promoting further changes.

This article was first published in the July 6, 2019 issue of the New Zealand Listener.