Although the rate of forestry conversions has slowed due to policy uncertainty and despite touted government plans to limit forestry on sheep and beef land, the livestock population, particularly sheep, appears to be heading irrevocably downwards.
At 23 million there are now just one-third the number of sheep compared with the peak in the 1970s.
The sector has worked wonders in increasing the value of the flock through better lambing rates, heavier lambs and higher product returns in spite of the collapsing wool price. But sluggish world markets and agriculture’s position as public enemy No 1 in generating greenhouse gases and harm to the environment risk putting New Zealand’s best-known export under existential threat.
The reality is that sheep are now in danger of no longer being reared in sufficient numbers to retain a critical mass.
Four research programmes funded by the Our Land and Water (OLW) Science Challenge initiated under a previous government have all reached a common conclusion: the best and easiest way to meet our 2050 goals of reducing long-lived GHGs and improving water quality is to convert three-quarters of all sheep and beef farms progressively to pine forests.
The summary report of the OLW programmes recognises this may not be acceptable to New Zealand as a whole because of the impact on rural communities, whether from loss of employment and rural services or on downstream and coastal settlements from forestry slash, in which case the authors say a conversation is needed to decide what alternatives are available. Unfortunately the only thing not in question appears to be the 2050 goal of net zero for CO2, which is obviously sacrosanct.
At this point I began to question my sanity. We, the taxpayers, have funded a scientific research programme whereby several different groups of scientists have been beavering away for several years to discover there is only one solution to the problem under current policy settings. In short, this entails destroying what has been the backbone of New Zealand’s economy for 150 years.
The phrase “under current policy settings” provides the one get-out clause to this impending disaster. The question is therefore what the current government intends to do to amend the policy settings. In reply to my question about progress on limits on forestry offsets, Trade Minister Todd McClay’s office said, “Policies are still being worked through. The government is seeking to incentivise a balance of land uses to achieve improved outcomes for agriculture, forestry and the climate while considering the impact across the rural economy.”
It is looking at proposals to limit the types of farm conversions that can be entered into the Emissions Trading Scheme (ETS). It is considering a moratorium on farm conversions on land classes 1-5 entering the ETS, a limit of 15,000 hectares on Land Class 6 and no limits land classes 7 and 8.
The limits on Land Class 6 are critical, as Beef + Lamb NZ analysis shows the majority of sheep and beef farms sold into forestry over the last couple of years are Land Class 6, which is the backbone of the sector, making up most of the grassland used for sheep and beef. If there are no limits on Land Class 6 conversions below 15,000ha, the government’s proposals would in effect mean no change.
Simon Upton, Parliamentary Commissioner for the Environment, has submitted his reaction to the government’s second emissions reduction plan, saying his greatest concern is “the plan’s reliance on the New Zealand ETS, which in its current form suppresses carbon prices, discourages gross emissions reductions and incentivises the planting of large areas of land in pine forests.”
He points out when the ETS was established it was supposed to be an interim measure to allow new low emissions technologies to be developed, but these don’t yet exist, which means forestry carbon offsets have become the easiest way for fossil fuel polluters to offset their emissions.
He cites several problems with this approach, including the loss of productive land to forestry and the effect on rural communities, the long-term removal of land for alternative purposes and the potential for unlimited carbon offsets to push the carbon price below the level needed to encourage gross emissions reduction and develop new technologies. Upton was unequivocal about the need to limit forestry offsets.
The present trend, driven by the need to meet net zero targets in pursuit of our climate change obligations, leads inevitably to the progressive decline of our rural communities and the industries that service them.
Alliance Group chair Mark Wynne says land use change as a result of normal economic and climate factors has always occurred naturally, but it is important to distinguish between this and what he terms a macro trend that is irreversible.
His issue with the present macro trend is that it is driven by the artificial nature of the carbon market, which is set by the ETS. This has resulted in 200,000ha of sheep and beef land sold for forestry conversion in recent years, equivalent to 1.4 million livestock units.
He is not concerned by seasonal fluctuations or decisions by farmers to plant appropriate land with trees, especially steep hill country, as this will eventually qualify for carbon credits in the ETS, which will enable farmers to offset their emissions.
But he warns of the long-term effect of wholesale conversions on rural communities and the industries, such as meat processors, that provide employment. The age of sheep and beef farmers means succession planning is a major issue with outright sale to the highest bidder often the only option.
He has three main problems with the present policy settings that he would like to see addressed: the ability to offset 100% of emissions, which no other country apart from Kazakhstan allows; that overseas polluters can buy land here to offset their overseas pollution; and the impact of exotic plantations on our biodiversity.
Wynne echoes BLNZ’s plea for the government to introduce changes that sensibly control the amount and class of land that can be sold for afforestation. The sector awaits the outcome of these deliberations with bated breath, but without any great expectation of serious change rather than tinkering round the edges.
