Guy Trafford
With the interest and concerns over the amount of New Zealand pastoral land going into forestry it prompted me to look over the ‘ditch’ to see if comparable interest was being generated over there. Australia has not progressed their emissions reduction policy to the same degree as New Zealand to the point where many have criticised the Federal Government as being irresponsible for the lack of progress.
It has actually got to the point now where the recently negotiated Free Trade Agreement (FTA) with the UK is being questioned due to Australia’s failure to make progress on what they agreed to do under the Paris climate agreement. The UK had removed any requirements to the Paris Agreement in the FTA whereas there was an expectation from the UK opposition parties that there would be inclusion of reduction policies in any such agreements.
Ed Miliband, Labour’s (UK opposition) business secretary, said the government should be doing more to put pressure on Australia to come forward with stronger commitments on greenhouse gas emissions before Cop26, rather than watering down a trade agreement. He said: “Australia is one of the world’s biggest polluters and key to the goal of limiting global warming to 1.5C. But rather than piling pressure on them, the UK government has simply rolled over.”
So, a tacit warning to New Zealand that when conjuring up FTA’s, words may not be enough and action supporting the words (policies) are required. In reality with the latest policies being rolled out in New Zealand and the wide inclusion into the ETS programme New Zealand should be on safer ground than most countries although the exclusion of Australia having to meet similar requirements does provide them with trade advantages, at least in the short term.
However, back to land going under trees in Australia compared to New Zealand, the lack of a well-developed ETS market in Australia seems to have resulted in less motivation to develop the carbon farming sector in Australia. Given that land is cheaper over there plus potentially easier access for harvesting, if that is considered to be part of the income stream, it is surprising there is not greater evidence of widespread plantings.
However, that is not to say that there is not some activity starting to emerge.
Relating to land ownership individuals or businesses can apply to the government to receive carbon credits to match mitigating programmes they have. Credits come in the form of Australian Carbon Credit Units (ACCU’s) which are instigated at 1 unit per tonne of CO2e.
Eligible activities that landholders can undertake to produce carbon credits include:
- changes to livestock management
- protecting native vegetation at risk of clearing
- regeneration or reforestation of native vegetation
- improving soil carbon
One example which has come to prominence is in Western Australia (WA) where a 700,000ha cattle property, Bulga Downs Station has become one of the first privately owned Australian farms to create and sell 125,000 carbon credits, two years after a Human Induced Regeneration (HIR) project was developed.
In this case land identified as being suitable for ‘carbon production from trees was fenced off and watering spots spread out to create a situation where there was less stocking pressure on regenerating trees and shrubs. This should also make the stocking system more resilient in droughts years.
The programme is pegged to run for 25 years and over that period with guesstimates done on the future price of carbon they estimate AU$36 million able to be generated.
It appears that the Federal Government also allows livestock farmers to receive credits for reducing livestock emissions and the example shown has beef cattle herd management projects reduce the overall emissions intensity of pasture-fed beef cattle herds. Changes are made to herd structure and new management actions are implemented to improve herd productivity. Landholders or managers earn carbon credits through the emissions reduced per kilogram of beef produced.
Activities that improve herd performance and reduce emissions intensity include reducing the average age of the herd, reducing the proportion of unproductive cattle within the herd, or changing the number of cattle in each livestock class within the herd. Given that farmers are not held liable for their emissions it seems a good deal.
One of the reasons given that not more tree planting options have been used is a federal rule that prevents tree plantings in many areas. The restriction is driven by rainfall.
Rainfall criteria are based on long-term average annual rainfall as per the “CFI rainfall map”.
- if rainfall is more than 400 mm per year, plantations can occupy an area no more than 100 hectares, or 30 per cent of a farm (whichever is the smaller)
- if rainfall is less than 400 mm per year, plantations can occupy an area no more than 300 hectares, or 30 per cent of a farm (whichever is the smaller).
Carbon uptakes by trees are diverse across Australia with the below table providing some idea. Total sequestration (Seq.) and mean annual value of carbon offsets generated from sequestration activities over the period from establishment until storage equilibrium (Equil.) is reached ($/ha/yr). Offset values have been adjusted for withholding a 5% risk-of-reversal buffer from sale.
Australian forestry interests are lobbying the federal government to try and get the rules changed.
Another disincentive in Australia is the ability of Australian emitters to purchase (cheap) international CER credits (not possible in New Zealand). This ability has kept the ACCU credits at lower demand and therefore cheaper. However, it is looking likely that this ability is going to be discontinued and already ACCU’s are starting to increase in value with the latest price at AU$22 per tonne of CO2e. This pales in comparison to New Zealand credits which are now in the mid-NZ$60s.
Land values in Australia are diverse but generally lower than New Zealand with an Australian Rural Bank report putting Queensland agricultural median price for land at AU$5,000/ha and NSW at AU$6,000/ha although larger blocks are considerably lower. It is likely that Australian carbon returns will continue to ratchet up and with a bit of Federal action this could occur quite rapidly. So, perhaps it may divert some of the international attention New Zealand is experiencing over to there.
New Zealand forests over similar 30-year time frames can sequester between 300 -400 tonnes of carbon per ha.
New Zealand farmers do have the option of incorporating the mixed livestock and carbon farming with trees. Although in New Zealand’s case, credit will only be given for the carbon sequestered by trees not any livestock reductions. The aerial photograph below is an example of poplar trees which were planted around 20 years ago at about 100 trees per ha.
It is believed they meet the criteria of :
- Reach at least 5meter height at maturity
- 30% minimum of canopy caver
- Minimum of 30sq metres of canopy cover per ha.
In this case Veronese were planted on the steeper and more wind exposed areas with Kawa on the lower slopes. There are likely improved varieties available now.
These trees were pruned up to approx. 5 metres in the later summer providing more stock feed and potentially enabling the trees to be used for timber if desired. The trees were established by two metre poles with sleeves on for protection from sheep, and cattle withheld for two years while the trees established.
The aim at the time was to protect the hill face from erosion and enable the main access track to be kept intact. It was pretty successful, and livestock could fully integrate with the trees after two years with little loss of feed. Certainly, less than would have been lost through erosion.
Guy Trafford is a university lecturer (Ag Mgmt) at Lincoln University New Zealand. The article was originally published in interest.co.nz
