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Appendix C: Land Use, Land-use Change and Forestry Sector Emissions Projections

Summary

This report provides projections of carbon dioxide (CO2) removals and emissions from New Zealand’s Land Use, Land-use Change and Forestry (LULUCF) sector, limited to post-1989 afforestation, reforestation and deforestation activities accounted for under the Kyoto Protocol.

The projections cover Commitment Period One (CP1: 2008–2012) of the Kyoto Protocol. The LULUCF projections are an input to the “2008 Projected Balance of Emissions Units” report produced by the Ministry for the Environment. This “net position” report brings together the projected quantity of greenhouse gas (GHG) emissions and removals from all sectors of the economy and is an input to estimating both New Zealand’s and the Government’s forecast liability or credit under the Kyoto Protocol during CP1. Net removals by the LULUCF sector (that is, removals by post-1989 forests minus deforestation emissions) for the period 2008–2012 are projected to be in the range 33.7 – 90.4 Mt CO2. The most likely scenario is projected to be 67.2 Mt CO2. This is higher than the 2007 most likely scenario projection of 58.0 Mt CO2 – due in part to lower expected future deforestation.

The large uncertainty range is mainly due to gaps in information and scientific knowledge. There is also uncertainty around the level of deforestation that will take place between 2008 and 2012 and the level of emissions from deforestation. Uncertainty has been incorporated into the LULUCF projections through the use of scenarios (described in detail later in this report). Measurement and some scientific uncertainty is expected to be reduced when the Ministry for the Environment’s Land Use and Carbon Analysis System (LUCAS) is operational from about 2010. Until then, the LULUCF projections are likely to remain the least certain of all sectors in the net position report.

Table C1: LULUCF projected CO2 removals and emissions (in million tonnes) during CP1 (2008–2012). See Table C3 for further detail.

Contributing factor

Worst-case

Most likely

Best-case

Mean and 95% range of CO2 removals from 10,000 @Risk simulations

64.2

84.1

107.3

Less deforestation emissions

–30.5

–16.9

–16.9

Net removals (total removals less deforestation emissions)

33.7

67.2

90.4

Forecast removals for the most likely scenario are similar to those made in 2007. The range of uncertainty (between worst case and best case) is lower than in 2007 because a different method has been used to estimate uncertainty. Net removals however, are higher in the most likely scenario because forest owners are expected to deforest less area under the proposed Emissions Trading Scheme (ETS) policy for Forestry, if it is implemented as proposed in September 2007. These levels of deforestation are based on a Deforestation Intentions Survey conducted in the period November 2007 to January 2008.

If policy measures are not implemented to manage deforestation, New Zealand’s deforestation liability is likely to increase by a further 14 Mt CO2 to reach 30.5 Mt CO2. Furthermore, if the government does not implement policies to reduce deforestation in CP1 but signals that it may do so after CP1, it is likely that forest owners would bring deforestation plans forward into CP1 to avoid future restrictions or costs. Any additional deforestation brought forward into CP1 would further increase deforestation emissions beyond the worst-case deforestation scenario.

With respect to future policy development it is important to note that:

  1. New afforestation will have little effect on CO2 removals in CP1 because newly established forests will remove very little CO2 from the atmosphere in their early growth years. Afforestation will however remove more substantial levels of CO2 as the forests mature.
  2. Deforestation rates have a substantial effect on New Zealand’s net position in CP1 because the CO2 accumulated over the life of the forest is assumed to be rapidly emitted to the atmosphere.

1   Introduction

Under the terms of the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC), New Zealand has agreed to take responsibility for its greenhouse gas emissions in Commitment Period One (CP1: 2008–2012).

As forests grow they remove carbon dioxide (CO2) from the atmosphere through photosynthetic activity. Under the Kyoto Protocol, Parties must account for CO2 removals by forests established on non-forested land after 31 December 1989 (post-1989 forests). These removal units can be used to offset greenhouse gas emissions from other sectors.

This report provides projections of CO2 removals and emissions from New Zealand’s Land Use, Land-use Change and Forestry (LULUCF) sector, limited to post-1989 afforestation, reforestation and deforestation activities accounted for under the Kyoto Protocol. These LULUCF projections feed into the Ministry for the Environment’s “2008 net position” report.

The five key factors used in these projections are:

  • future deforestation rates and the speed and level of emissions from deforestation
  • post-1989 forest growth rates
  • the proportion of afforestation since 1 January 1990 that may be “ineligible Kyoto forests” (over-planted onto land which was already defined as forest as at 1 January 1990)
  • the potential loss of soil carbon following afforestation of grassland
  • future afforestation rates.

The projections also include error bounds around the existing area of post-1989 afforestation, providing a range of scenarios represented here by “worst-case”, “most likely”, and “best-case” values.

2 Forestry trends and drivers

Forecasts are greatly influenced by recent historic and prevailing conditions. This section summarises the economic and policy environment of New Zealand’s forest industry over the last five to six years.

A high exchange rate, increasing costs (particularly shipping costs), increased competition and changing international markets have adversely affected forest-growing profitability in New Zealand since about 2002.

Recent patterns of forest ownership have changed rapidly, with the largest volume of forest sales since the state forests were privatised in the late 1980s. New Zealand’s largest corporate forestry companies (Fletcher Challenge and Carter Holt Harvey) have both been sold to private investors. Superannuation funds and timber investment management organisations (TIMOs) have purchased large areas of plantation forests, now owning more than one-third of the total planted forest area in New Zealand.

There is increasingly greater separation between forest and forest land ownership than has been the case historically. Forest land owners are looking to realise the increase in land value through land sales, often involving conversion to another land-use. For good-quality land near existing farming infrastructure, pastoral farmers are willing to pay significantly higher prices than forest owners and this is resulting in a land use change from forestry to pastoral agriculture.

The net result of these changes and perceptions of forestry future profitability has led to:

  • a major decline in the rate of afforestation: from a 30-year annual average (1976 to 2005) of 42,000 ha to less than 2,000 ha in the year to December 2007: this is the lowest level of afforestation reported since 1945
  • the relatively new phenomenon of deforestation of plantation forest land. In the year ended December 2007, an estimated 19,000 hectares was deforested, predominantly in the Central North Island and Canterbury regions 

3 Modelling methodology

This report provides scenario-based forecasts (projections) of CO2 removals and emissions for the LULUCF sector for the period 2008 to 2012. The projections are based on information available as at March 2008.

Removals from the LULUCF sector are derived from data and assumptions provided by the Ministry of Agriculture and Forestry (MAF) and the Ministry for the Environment (MfE). The modelling was undertaken by Scion (formerly the Forest Research Institute). The underpinning science incorporated in the forest carbon models used in these projections, along with scientific assumptions, comes from work carried out by New Zealand’s crown research institutes, predominantly Scion and Landcare Research.

Scientific uncertainty, knowledge gaps and the range of possible future outcomes (particularly for afforestation and deforestation) are reflected in a scenario-based analysis. The scenarios are labelled worst-case, most likely and best-case. They cover the likely range of major contributing factors to estimating LULUCF sector removals and emissions based on the current economic environment, policy settings, current land-use statistics, and the state of scientific knowledge.

The projected removals were calculated using a spreadsheet simulation model of the post-1989 planted forest estate. The model is based on a carbon yield table which describes the per-hectare carbon stock at each age during the growth of a typical post-1989 forest stand. To calculate the carbon stock in a given year, values in the yield table are multiplied by the forest area at the corresponding age, and then summed. The forest areas by planting year come from afforestation statistics collected by MAF.

The simulation advances through annual time periods (1990 to 2012). Net CO2 removals are calculated as the stock change during CP1 (2008–2012), see Table C2; a more detailed model description is also available in Annex 1.

Table C2: Calculating annual carbon stocks from forest areas using a national carbon yield table. Note: cohorts of planted areas “move down one row in the table” each successive year.

Age

Yield
(t CO2)

1990

1991

1992

Area
(ha)

Stock
(t CO2)

Area
(ha)

Stock
(t CO2)

Area
(ha)

Stock
(t CO2)

0
1
2
3
4
..
..

0.0
9.2
13.9
27.9
45.9

x 15,400

0

x 15,800
x 15,400

0
= 141,680

x 50,200
x 15,800
x 15,400

0
= 145,360
= 214,060

Total area (ha)

15,400

 

31,200

 

81,400

 

Total stock (t CO2)

0

141,680

359,420

Stock increase (t CO2)

0

141,680

217,740

4 Projection results

Table C3 provides a breakdown of the major contributing factors on which the removal and emission projections are based.

Removals from the LULUCF sector for the period 2008 to 2012 are projected to be in the range 33.7–90.4 Mt CO2. The most likely scenario is projected to be 67.2 Mt CO2 (compared to 58.0 Mt CO2 in the previous year’s projection).

Table C3: LULUCF projected carbon removals and emissions (Mt CO2-e) during CP1: comparison of the 2007 “Most likely” projection with the three 2008 scenarios

 

Contributing factor

2008 projections

2007 projection
(Most likely)

Worst-case

Most likely

Best-case

Removals based on afforestation only

 

 

 

 

Kyoto planted forest CO2 removals (based on existing 680,000 ha)

95.5

95.5

95.5

96.8

Future afforestation (2007 to 2012): 0, 5,000, 20,000 ha/yr

0.0

0.2

0.3

0.9

Adjustment factors (assumptions see text)

 

 

 

 

Area of Kyoto forest planted between 1990 and 2006 ± 5%

–4.8

0.0

4.8

0.0

Kyoto forest growth rates

–9.7

0.0

28.3

0.0

Soil carbon change with afforestation

–11.2

–2.9

0.0

–3.0

Ineligible afforestation

–19.3

–14.6

–7.3

–15.7

Total removals, un-adjusted sum of items above

 

 

 

79.0

Mean and 95% range from 10,000 @Risk simulation1

64.2

84.1

107.3

Not estimated

Less deforestation emissions2

–30.5

–16.9

–16.9

–21.0

Removals less deforestation emissions

33.7

67.2

90.4

58.0

Notes:

  1. In 2008 the mean and range have been calculated using Monte Carlo simulation (see the Uncertainty Analysis section for further details). In 2007 the mean and range were calculated by adding the adjustment factors to total removals from afforestation. This earlier approach gave a more conservative estimate of the “Most likely” scenario and the uncertainty range (this is represented by the “Worst-case” and “Best-case” scenarios).
  2. 2. The “Most likely” and “Best-case” scenario values of 16.9 Mt CO2 represent 12,000 ha of deforestation based on the ETS Policy scenario from the deforestation intentions survey. A “No Policy Intervention” scenario presented in the deforestation report was 37,000 ha or 30.5 Mt CO2 and this has been used for the “Worst-case” scenario. For a description of 2007 Deforestation Intentions Survey results refer to Manley, 2008.

5 Model assumptions

5.1 Future afforestation (plantations)

The average new planting rate over the last 30 years has been 40,000 hectares per year. In the period 1992 to 1998 new planting rates were high, averaging 69,000 hectares per year. Since then new planting has declined, to less than 2,000 ha in 2007.

Figure C4: New forest planting, 1920–2007

This line graph shows new forest plantings from 1920 to 2007, in thousands of hectares. Plantings first peaked in 1930 (37,000 ha), reduced to nil in the mid-1940s and increased again to stabilise in 1975–1985 (c. 50,00 ha). A sharp drop in 1990 was followed by a peak in 1994 to 98,000 ha, reducing to near nil in 2007 Data:

Year

Area planted (000 ha)

1920

1

1925

14

1930

37

1935

12

1940

2

1945

0

1950

3

1951

3

1952

3

1953

3

1954

4

1955

5

1956

5

1957

5

1958

5

1959

5

1960

6

1961

7

1962

9

1963

11

1964

14

1965

13

1966

15

1967

17

1968

21

1969

23

1970

26

1971

29

1972

33

1973

44

1974

44

1975

45

1976

49

1977

39

1978

43

1979

44

1980

38

1981

45

1982

49

1983

51

1984

56

1985

48

1986

40

1987

30

1988

20

1989

21

1990

16

1991

15

1992

50

1993

62

1994

98

1995

74

1996

84

1997

64

1998

51

1999

40

2000

34

2001

30

2002

22

2003

20

2004

11

2005

6

2006

3

2007

2

Table C5 shows the afforestation rates used in the 2008 net position projections.

Table C5: Future plantation afforestation (hectares)

Calendar year

Worst-case

Most likely

Best-case

2008

0

5,000

10,000

2009

0

5,000

15,000

2010

0

5,000

20,000

2011

0

5,000

25,000

2012

0

5,000

30,000

Average (2008–2012)

0

5,000

20,000

The most likely scenario assumes annual afforestation of 5,000 hectares. The best-case scenario assumes average afforestation of 20,000 hectares per year between 2008 and 2012. The worst-case scenario assumes no further afforestation occurs after 2007. These assumptions are identical to those in the previous year’s projections.

Afforestation rates may increase once the new forestry schemes (Forestry ETS, Permanent Forest Sinks Initiative (PFSI) and an Afforestation Grants Scheme) are fully implemented. Other than PFSI, these schemes have not commenced and there is currently no empirical evidence indicating any significant increase in afforestation. The best-case afforestation scenario provides an increased afforestation scenario. As previously noted, because of the very young age any forests established between now and 2012 will only sequester very small amounts of CO2 in CP1. However, these forests will remove increasing amounts of CO2 as the forests mature.

5.2  Kyoto forest area

Kyoto forest areas have been estimated from the National Exotic Forest Description (NEFD) database. This combines data from a survey of major forest growers undertaken by the Ministry of Agriculture and Forestry, a Small Forest Growers survey completed by AgriQuality in 2004, and estimates of new planting based on data obtained from nursery surveys (Eyre, 1995). The total area of planted forests in the NEFD database is estimated to be accurate to ±5 per cent.

5.3  Growth rates (plantations)

The most likely scenario uses a national carbon yield table developed from the NEFD yield table database. The NEFD yield tables better represent the growth of forests on traditional forestry sites. The generally held view is that post-1989 plantation stands are likely to have higher growth rates than earlier plantings.

Analysis of forest growth data suggests that fully stocked stands planted after 1 January 1990 show a 15–35 per cent improvement in productivity over stands currently being harvested: this is the result of genetic improvement, better site quality and improved forest management. The upper end of this range was used to develop the best-case scenario, which is based on a growth model projection for pruned radiata pine growing on an ex-pasture site. Compared with the NEFD-based yield table, the higher yield table has:

  • higher volume at maturity
  • lower carbon for a given stem volume (trees on fertile ex-pasture sites have lower wood density and therefore lower carbon content per unit of volume)
  • a higher rate of growth in the second half of the rotation.

The worst-case scenario yield table was set at 10 per cent lower than the NEFD yield table. This assumed:

  • no increase in volume productivity over stands currently harvested
  • no reduction in wood density (and therefore carbon) due to ex-pasture sites
  • the same pattern of growth as assumed by the NEFD-derived yield table.

These assumptions have not changed from those used for the 2007 projections. The growth rate scenarios are indicative only. Accurate estimation of forest CO2 removals requires representative sampling of Kyoto forests. A statistical representative sample plot network has begun to be established across New Zealand’s Kyoto forests as part of the Ministry for the Environment’s Land Use and Carbon Analysis System (LUCAS) project.

5.4  Changes in soil carbon

Soil carbon levels vary with climate, land use and soil type. Most pasture to radiata pine afforestation occurs on erosion-prone hill country where soil properties are inherently variable. Work is underway to improve New Zealand’s approach to determining changes in soil carbon with afforestation, which at present is done by using:

  1. the soil paired plot database; and
  2. the New Zealand Soil Carbon Monitoring System (SCMS).

The first method estimates soil carbon change with afforestation from the analysis of the soil paired plot database – a cache of purpose-collected data intended to be used as validation of the SCMS estimates. Data from localities where afforestation has taken place estimate soil carbon loss to be 4.7 ± 2.6 t C/ha, the most likely scenario. This dataset contains several outliers, all of which indicate substantial carbon losses. Excluding these outliers from the calculation leads to an estimated loss of –0.2 ± 2.5 t C/ha (ie, a small gain) at the 95 per cent confidence level. Excluding these outlier plots needs more analysis; meanwhile the best-case scenario assumes no soil carbon change.

In the second method, the New Zealand Soil Carbon Monitoring System is a model that uses historical soil data from the National Soils Database (NSD). These data are coupled with the key factors that influence soil carbon. The SCMS generates estimates of soil carbon change associated with afforestation as well as for a range of other land-use changes; the system has been described in peer-reviewed, international journals. Model predictions for localities where most of the change from pasture to radiata pine land-use occurs, have recently been scrutinised by the developers and officials: they now suspect that the predicted soil carbon reduction associated with afforestation is overstated, mainly due to the limited number of historic soil data in such localities (erosion-prone hill-country). The estimate produced by the SCMS (a loss of 18 ± 11 t C/ha) is considered to be the worst-case estimate of soil carbon change with afforestation.

5.5  Ineligible planting

Initial investigation has suggested that some plantation afforestation since 1 January 1990 may have occurred on land that, from a definitional perspective, already met the adopted New Zealand forest definition. Under carbon accounting rules, such land does not qualify as Kyoto forest as the land was already deemed to be forest as at 1 January 1990.

The estimates of the proportion on “ineligible” exotic forests used in the 2006 and 2007 LULUCF projections were 16 per cent (most likely), 8 per cent (best-case) and 21 per cent (worst-case). These values have continued to be used in the 2008 net position calculations.

The most likely and worst-case figures were based on the use of two national classifications to test the representativeness of a pilot mapping project in Nelson-Marlborough, in terms of post-exotic forest planted into possible forest land. The two sources of data were the 1987 Vegetation Cover Map and the 2001/02 Land Cover Database. Spatial intersection of these indicated the likely area of post-1989 forest planted into possible forest land being: nationally 16 per cent; Marlborough region 21 per cent; and the Gisborne region 15 per cent. Anecdotal information suggested that the levels could be as low as 8–10 per cent, and this was used for the best-case scenario.

Table C6: Percentage of existing forest (shrubland) ineligible under the Kyoto Protocol

 

Worst-case

Most likely

Best-case

Percentage of post-1989 afforestation onto shrublands that could already have met New Zealand’s Kyoto Forest definition

21%

16%

8%

Forest industry commentators have stated that the value of ineligible Kyoto forests is too high. However, in the absence of further quantitative information the 2008 projections use the 2006 estimates again. Preliminary analysis suggest that the proportion of ineligible forests may be reduced once land-use mapping for the LUCAS project has been further progressed.

A closely related issue is the requirement under the Kyoto Protocol to account for emissions from burning and decay of scrub biomass that is cleared for afforestation. That is, if the previous land use does not meet the definition of forest but still contains significant carbon stocks, then the carbon stock change due to afforestation must be accounted for.

5.6 Future deforestation (plantations)

Since 2004, a trend of not replanting forest after harvesting, and in a number of cases converting immature forest to pasture, has clearly emerged. New Zealand has traditionally had dynamic land-use change patterns so changes in land use are not unusual. The scale of conversion has been high because agriculture returns, particularly for dairy farming are better than for forestry. It is estimated that 19,000 hectares of plantation forests were deforested in the year ended December 2007.

The most likely scenario in these projections assumes that deforestation emissions will be 16.9 million tonnes CO2 during CP1. This is based on the ETS Policy scenario from the 2007 Deforestation Intentions Survey. This scenario assumes that the proposed ETS policies are implemented as proposed in the Climate Change (Emissions Trading and Renewable Preference) Bill, and results in 12,000 hectares of deforestation between 2008 and 2012.

The “best-case” scenario value is the same as the most likely scenario while the “worst-case” scenario assumes an emission liability of 30.5 Mt CO2; this is based on the “No Policy” scenario from the 2007 Deforestation Intentions Survey.

All deforestation is assumed to be from mature (28-year-old) radiata pine releasing approximately 800 tonnes of CO2 per hectare. It is likely that some areas that will be deforested will not be mature radiata pine. However, there is insufficient data to more accurately forecast deforestation emissions at this stage.

If the government does not implement policies to manage deforestation in CP1, some forest owners are likely to bring future deforestation forward into CP1 if they believe policy measures could be introduced post-2012.

No allowance has been made for deforestation of indigenous forest or shrubland that meets New Zealand’s adopted Kyoto forest definition. There are currently no national statistics available on the clearance of either indigenous forest or shrubland (that meets the forest definition). A Landcare Research (Stephens et al, 2001) report provided estimates for the area of clearance of indigenous forest and scrub between 1989/90 and 1996/97, using visual interpretation of ground cover from satellite images. Complete coverage for New Zealand was not achieved as there were insufficient cloud-free images for much of Northland, southeast Wairarapa, the northwest and southwest of the South Island. For the areas that could be mapped, 1,809 hectares or 0.03 per cent of the total area of indigenous forest was cleared between 1990 and 1996; 1,409 ha or 0.05 per cent of the total area of scrub was removed between 1990 and 1996.

It is thought that under current legislation (eg, Resource Management Act 1991, Forests Act 1949 amended 1993) and/or codes of practice (eg, The NZ Forest Accord 1991) any significant deforestation of indigenous forest is, in practice, difficult to do. But until improved national mapping of forest area change is available, the actual level of indigenous forest and shrub land clearance remains uncertain until LUCAS is operational (see below).

6 Data limitations

There are acknowledged limitations in some of the data used in the LULUCF sector projections due to information gaps and scientific uncertainty. The Ministry for the Environment commenced implementing the Land Use and Carbon Analysis System (LUCAS) in 2005. LUCAS is being designed to provide more robust inventory data specifically for Kyoto carbon accounting purposes. This is a long-term and large-scale project that will not be fully operational until 2010. Installation of forest carbon inventory plots in plantation forests was delayed until 2007 because of a forest owners’ ban in protest over the Government’s climate change policies. This ban was lifted in October 2007. A full complement of inventory plots in post-1989 forests are planned to be measured during the 2008 calendar year.

Until LUCAS is generating data, existing forest resource information such as the National Exotic Forest Description database and the Land Cover Database (LCDB) continue to be used for projecting CO2 removals, even though these data sources were not designed for forest carbon accounting purposes. Hence some information essential for carbon accounting purposes are not currently available. The NEFD describes the pre-1990 forests (with ownership dominated by larger forest growers’ forests) well. NEFD information on plantation forests established since 1992 by a large number of smaller-scale forest owners is of poorer quality. Information on carbon stock changes in New Zealand’s 6.5 million hectares of indigenous forest and 2.6 million hectares of shrubland remains scant.

7 Uncertainty analysis

A Monte Carlo analysis was carried out using the @Risk software (Palisade Corporation). The ranges for afforestation factors in Table C3 were represented by Triangular probability distributions, with the worst-case values set to the 97.5th percentile of the distribution and the best-case emissions level set to the 2.5th percentile (except for future afforestation where the low value – associated with zero hectares of afforestation – was set as the distribution minimum). The uncertainty analysis used 10,000 iterations to derive the 95th percentile range of predicted values from 64.2 to 107.3 Mt CO2. Deforestation emissions were then deducted to give an uncertainty range of 33.7 to 90.4 Mt CO2 (Table C3).

In 2007 the mean and ranges had been calculated by adding all the adjustment factors to total removals from afforestation. This earlier approach to estimating uncertainty gave a lower most likely value and a wider uncertainty range (difference between the best-case and worst-case scenario). AEA Technology conducted a review of the 2007 Net Position Forecasts and recommended that Monte Carlo Simulation be used in future to estimate uncertainty.

8 Forest climate change policy

8.1 Introduction

Climate change policy development has been fluid for most of this decade. Until 2002 no national policy existed and the Kyoto Protocol had not been ratified. The New Zealand Government signed the Kyoto Protocol in 2002 and following the ratification by Russia in 2004, the Kyoto Protocol came into effect in 2005. In October 2002 the Government announced its broad climate change framework with respect to forests. This involved the Government using forest sink credits earned from post-1989 afforestation activities to offset increased greenhouse gas emissions from other sectors, and capping its liabilities for deforestation of pre-1990 forests at 21 million tonnes CO2.

In late 2006 the Government promulgated its Sustainable Land Management (SLM) proposals and entered into a round of consultation with stakeholders. In the SLM proposals, the Government signalled its continued intention to use post-1989 afforestation credits to offset increasing emissions from other sectors of the economy; and that it would encourage afforestation through:

  • an afforestation grant scheme
  • giving growers a choice between being part of the afforestation grant scheme or devolution of the sink credits (and their associated liabilities) for all post-2007 afforestation
  • that both these proposals would work alongside the Permanent Forest Sink Initiative.

Deforestation of non-Kyoto forests would be discouraged by either:

  • a flat charge on land-use change from forestry to another use, for the loss of stored carbon
  • a tradeable permit regime where the government allocates tradeable deforestation permits to forest land owners and those who deforest are liable for emissions above the level of permits they hold
  • centrally determined deforestation levels where the government passes legislation to prevent deforestation of land unless government approval has been granted (to ensure total deforestation remains within a government-established target)
  • Resource Management Act controls on deforestation: a national environmental standard would require local authorities to prescribe limits for greenhouse gas emissions for the explicit purpose of controlling deforestation.

8.2  Development of the Emissions Trading Scheme

After considering feedback from the Sustainable Land Management consultation, the Government announced that it would establish a New Zealand Emissions Trading Scheme (ETS). The Government proposed that the ETS would cover all sectors and all gases but the sectors would commence participation within the scheme in a staged manner. The Government announced that forestry would be the first sector to enter the scheme: owners of post-1989 afforestation would be able to receive New Zealand Units if they chose to opt into the scheme (noting that owners who received credits would also be liable for CO2 emissions from harvesting and other events). The Government also proposed, effective from 1 January 2008, that any forest owner deforesting non-exempt pre-1990 forest would need to surrender New Zealand Units to cover the deforestation emissions. As part compensation for this, pre-1990 forest owners would also receive an allocation of free units. A number of deforestation exemptions are also proposed, for example forest owners with less than 50 hectares of pre-1990 forest as at September 2007 can apply to be exempt, as are owners deforesting less than 2 hectares of pre-1990 forest during Commitment Period 1.

The legislation required to enact the Emissions Trading Scheme is contained in the Climate Change (Emissions Trading and Renewable Preference) Bill (2007) that at the time of writing was before Parliament’s Finance and Expenditure Select Committee. Until the Bill becomes law and the associated regulations are in place, the treatment of Forestry in the ETS will not be finalised.

These projections assume that the Bill will be passed as proposed. The main outcomes of the proposed policies will be:

  • Post-1989 forest owners who opt into the ETS will receive New Zealand Units and therefore the Crown will not be able to use these devolved units to offset increased emissions from other sectors.
  • The Crown will also devolve 21 million units (minus an allocation for exemptions) in CP1 to owners of pre-1990 forests. It is proposed that an additional 0.8 million units are allocated for the removal of “weed” trees.
  • Non-exempt owners of pre-1990 forest who deforest will be required to surrender New Zealand or Kyoto Units to cover deforestation emissions.

8.3 The Permanent Forest Sinks Initiative

The Permanent Forest Sink Initiative (PFSI) provides an opportunity for landowners to establish permanent forest, and obtain tradable Kyoto-compliant emission units (Assigned Amount Units or AAUs) in proportion to the carbon sequestered by their forests.

8.4 Accounting for Article 3.4 forest management

New Zealand has opted not to account under Article 3.4 of the Kyoto Protocol, which covers additional LULUCF activities in the first commitment period, such as forest management.

Under Article 3.4, New Zealand would have to account for carbon stock changes in its indigenous forests as well as its pre-1990 planted forests. At present, carbon stock changes in New Zealand’s indigenous forests are unknown, but available data suggest that the carbon stocks are likely to be in a steady state or possibly in slight decline.

An assessment in 2001 (Baisden et al, 2001) of the significance to New Zealand of Article 3.4 forest management activities, estimated their contribution to be between –92 and +11 Mt CO2-e over the CP1. If New Zealand accounted for forest management under Article 3.4, it would also have been subject to a cap restricting the maximum amount of carbon dioxide removals it could claim in CP1 to 3.7 Mt CO2 – but potential emissions and the related liabilities would remain uncapped. The substantial costs of measuring New Zealand’s entire forest estate did not warrant securing a maximum of 3.7 Mt CO2 over the first commitment period.

9 Review of past projections

Since 2005, greenhouse gas projections have been subject to a number of reviews, the most comprehensive being two AEA Technology (United Kingdom) reviews. These reviews identified a number of improvements for producing future projections, most of which have been incorporated; the overall finding of the 2005 projections was that “the methodologies employed to project emissions and sinks across the different sectors [are] generally sound and reasonable in their approach”. AEA Technology noted the uncertainties inherent in all countries’ approaches to projecting future greenhouse gas emissions, and that it is “not uncommon” for projections to change on re-analysis. The reviewers recognised that many of their recommendations built upon improvements already in train. AEA Technology’s key conclusions for the LULUCF sector review were:

  • methodologies and input assumptions are reasonable and the resulting removal and emission projections are of a good standard
  • a single document should be produced for any future projection estimates that provides a detailed basis and sources for all calculations
  • four key issues will require further consideration to minimise uncertainty in future projections:
    1. reasons and drivers for the downward trend in new forest planting
    2. the areas of post-1989 forest planting at a national scale into existing shrublands that meet the Kyoto Protocol definition of forest
    3. estimation of areas deforested and drivers for this process
    4. time patterns of loss of carbon soil after afforestation
  • the New Zealand Carbon Accounting System (now called Land Use and Carbon Analysis System) will provide valuable data in assessing removals and emissions for land use land-use change and forestry.

Issues 1 and 3 above have been addressed. For Issue 1, a report examining the financial returns from forestry and its relationship to forestry planting rates has been published (Horgan, 2007). This report is available on the Ministry of Agriculture and Forestry’s website. In respect to Issue 3, deforestation intentions surveys were undertaken in 2005, 2006 and 2007 (Manley, 2006 and Manley, 2008) examining major forest owners’ deforestation intentions and examining where deforestation is taking place and why. The survey results have been incorporated in the present projections. The 2006 and 2007 deforestation intention survey reports are also available on the MAF website.

Issues 2 and 4 are expected to be informed by data and analysis undertaken within the Ministry for the Environment’s LUCAS project.

10 References

Baisden WT, Beets P, Carran RA, Clark H, Ford-Robertson JB, Francis GS, Maclaren P, Marshall H, Manning MR, Newton PCD, Saggar S, Tate KR, 2001. An Assessment of the Significance to New Zealand of Article 3.4 Activities under the Kyoto Protocol. Contract report prepared for the Ministry of Agriculture and Forestry.

Eyre J, 1995. Predicting and Measuring New Planting from Nursery Surveys. New ZealandJournal of Forestry, August 1995, pp 45–46.

FRI (Forest Research Institute), 1995. IFS/FOLPI Database and Utilities, Interactive Forest Simulator Manual. FRI Software Series No 19.

García O, 1981. IFS, an Interactive Forest Simulator for Long Range Planning. New ZealandJournal of Forestry Science 11: 8–22.

Horgan G, 2007. Financial Returns and Forestry Planting Rates. Ministry of Agriculture and Forestry report.

Jaakko Poyry Consulting, 2003. SmallForestOwners Yield Table Evaluation. Unpublished contract report prepared for the Ministry of Agriculture and Forestry.

Manley B, 2004. Review of NEFD Yield Table Structure. Unpublished contract report prepared for the Ministry of Agriculture and Forestry, Canterprise, University of Canterbury.

Manley B, 2006. 2006 Deforestation Survey. Canterprise, University of Canterbury.

Manley B, 2008. 2007 Deforestation Survey. Canterprise, University of Canterbury.

Ministry of Agriculture and Forestry, 1996. NationalExotic ForestDescription Regional Yield Tables as at 1 April 1995.

Ministry of Agriculture and Forestry, 2007. A National Exotic Forest Description as at 1 April 2006.

Stephens P, Heke H, Sutherland A, Shepherd S, Pinkney T, 2001. Estimating Clearance of Indigenous Forest and Scrubland between 1989/90 and 1996/97. Landcare Research, unpublished contract report prepared for the Ministry of Agriculture and Forestry.

Wakelin S, 2007. Carbon Inventory of New Zealand’s Planted Forests – Calculations revised in October 2007 for New Zealand’s 2006 Greenhouse Gas Inventory. Scion. Unpublished contract report prepared for the Ministry of Agriculture and Forestry.

Wakelin S, Paul T, Beets P, Kimberley M, 2008. 2008 Net Carbon Uptake Projections (2008–12) – Land Use, Land-Use Change and Forestry. Scion. Unpublished contract report prepared for the Ministry of Agriculture and Forestry.

Annex 1: Description of the LULUCF net position models

A1   Model for projecting net removals

A1.1  Background

Article 3.3 of the Kyoto Protocol allows the net changes in greenhouse gas emissions by sources and removals by sinks resulting from afforestation, reforestation and deforestation since 1 January 1990 to be used to meet the commitments of Annex B parties. Sources and removals are to be measured as verifiable changes in carbon stocks in each commitment period. The carbon stocks to be accounted for are above-ground biomass, below-ground biomass, dead wood, litter and soil organic carbon.

The Land Use and Carbon Analysis System (LUCAS) is being developed and implemented so that New Zealand can meet its international obligations for reporting under the Kyoto Protocol. The LUCAS project will report emissions and removals of greenhouse gases across the carbon pools for forests planted since 1 January 1990 (= post-1989) and any land deforested over the first commitment period of the Kyoto Protocol (CP1: 2008–2012). The basis for estimating stock changes in the biomass and dead organic matter pools will be a representative sample of the Kyoto Forest estate taken at or near 1 January 2008 and repeated at 31 December 2012.

Because the LUCAS carbon monitoring plots have yet to be established, an alternative approach is used to project CP1 net CO2 uptake. This is hampered by the absence of a spatial database of post-1989 planted forest areas. This report is based on the methodology used to estimate carbon stocks in planted forests for UNFCCC reporting since the early 1990s.

A1.2  Methodology used in this report

Projected removal units from afforestation and reforestation since 1 January 1990 are calculated as the difference between modelled carbon stocks on 1 January 2008 and 31 December 2012. The base data for calculating carbon stocks are the Ministry of Agriculture and Forestry’s estimates of annual afforestation area since 1990, and a national carbon yield table derived from the National Exotic Forest Description regional yield tables.

The national carbon yield table provides carbon stock estimates by age on a per hectare basis for all non-soil forest carbon pools. All forest areas planted in the same year are pooled and modelled as a single forest area for that planting year. The model keeps track of these planted areas as they mature, and generates annual estimates of carbon stock by multiplying planted area by the carbon yields per hectare at the appropriate age (see Table C2). This approach is the same as that employed by routinely-used forest estate planning simulators, such as IFS (Interactive Forest Simulator: García 1981).

Soil organic carbon stocks are estimated in the same way as forests, except that a separate national soil carbon yield table reflects changes in soil organic carbon resulting from afforestation of pasture. These changes are modelled as occurring gradually, rather than instantly at the time of afforestation. Values in the yield table start from a high point representing steady-state soil organic carbon under pasture, then decline before stabilising at a steady-state planted forest level.

Projected emissions from deforestation are determined by estimating the difference between pre- and post-deforestation carbon stocks on land deforested post-1989. Pre-deforestation stocks are calculated by multiplying the area assumed to be deforested by the per hectare carbon stock value in the national carbon yield table at the nominal deforestation age of 28 years. The Intergovernmental Panel on Climate Change (IPCC) methodology allows for an instantaneous loss of carbon at the time of harvest, or a gradual change over time (eg, through decay of residues). The model allows either option to be applied.

A1.3  The model

Three Microsoft Excel spreadsheets are used to calculate carbon removal and emission units: afforestation, soil carbon, and deforestation.

A1.3.1    Afforestation calculations

This spreadsheet model multiplies the area of forest planted each year post-1989 by the appropriate value in the carbon yield table. This is done for each year in the simulation (1990 to 2012).

The first spreadsheet allows combinations of post-1989 afforestation rate with alternative carbon yield tables. Afforestation rates are varied to allow for different scenarios. These include the modelling of future afforestation rates, and the adjustment of forest areas to deduct ineligible forest areas planted onto existing forest land (ie, shrubland that met New Zealand’s forest definition). In the latter case, the over-planted proportion is removed from the calculations. The carbon stock for each planting year cohort is calculated annually from the time of planting to 2012, by multiplying the area by the yield table values at the appropriate age. Each year, carbon stocks are summed across planting cohorts to give the total annual carbon stock. Projected removal units are calculated as the stock change during the commitment period, defined as the stock as at 31 December 2012 minus the stock as at 31 December 2007. Carbon stocks include all living biomass, dead wood and litter, but exclude soil organic carbon.

A1.3.2    Soil carbon calculations

The second spreadsheet models the impact of afforestation on the soil organic carbon pool, including both the magnitude of the change in carbon per hectare and the rate of soil carbon change over time. Projected removal units are calculated as the soil carbon stock change during the commitment period (for converted pasture and planted forest combined) and confirmed by the sum of emissions over the same period.

A1.3.3    Deforestation calculations

The third spreadsheet models variations in deforestation rate and alternative treatments of post-deforestation residues. It is assumed that deforestation occurs in pre-1990 planted forests following a normal harvest at age 28 years. The merchantable stem component is modelled as an instantaneous emission of carbon, but tracked separately from harvest residues. The latter may be emitted instantly, or allowed to decay under alternative decay rates. In addition, the proportion of instantly emitted versus decaying residues can be adjusted.

Projected removal units are calculated as the sum of annual emissions over the commitment period. Emissions and removals associated with land uses after deforestation (ie, agriculture and lifestyle blocks/settlements) have not been modelled.

Removals and emissions are both calculated in the three spreadsheet models described above based on stock differences, where the stock is the product of areas multiplied by yield table values. The estimates of afforested and deforested areas are key variables, as are the values in the carbon yield table, which is described in the next section.

A2 National average carbon yield table

Projected removal units are calculated using a national area-weighted average carbon yield table for New Zealand’s planted forests. This yield table formed the basis for the 2006 UNFCCC planted forest carbon inventory (Wakelin, 2007). The process used to construct the yield tables is outlined in Figure C7.

Figure C7: Deriving the national average yield table

 

A2.1  NEFD volume yield tables

National Exotic Forest Description yield tables are prepared periodically to support wood availability modelling carried out by the Ministry of Agriculture and Forestry. The latest set of yield tables (MAF 1996) was used for both the 1996 and 2000 Wood Supply Forecasts. The yield tables have been reviewed (eg, Jaakko Poyry Consulting, 2003; Manley, 2004) and a new set is in preparation.

A2.2  Regional carbon yield tables

The process used to derive a carbon yield table for each NEFD yield table is described in more detail in Wakelin (2007). The two main steps are:

  1. Convert NEFD yields net of mortality to gross yields.
  2. Use C_Change to firstly convert stem volumes to stem biomass, and then to convert stem biomass to stand biomass.

The first step is required because C_Change requires both gross and net increments as inputs. Gross volume increment is used to calculate total dry matter production; the difference between gross and net volume is used to derive carbon in annual tree mortality, and the resulting dead carbon is added to the dead component carbon stock. An analysis of Permanent Sample Plot (PSP) data held by Scion was made to determine the relationship between net and gross volume for each broad NEFD regime. The PSP data was also used to determine pruning and thinning schedules for each regime.

Inputs to C_Change include the NEFD stem volume yield tables, wood density classes for regions and species, and silvicultural regime details. C_Change is used to:

  • derive stem wood biomass increment from volume increment and density
  • apply an increment expansion factor to convert this to total carbon fixed
  • partition the total carbon to live biomass pools
  • calculate transfers from live to dead pools from mortality functions and regime details (ie, pruning/thinning)
  • apply decay functions to estimate carbon loss from dead pools.

The output from C_Change is a carbon yield table corresponding to each of the 89 NEFD crop types, with estimates of carbon per hectare by age class for each pool.

Note that these carbon yield tables assume:

  • volume growth that is species-specific, based on the species and species groups used in the NEFD yield tables
  • broad wood density classes differentiated by species (and by region for radiata pine)
  • regime assumptions (particularly initial and final stocking) that are based on radiata pine PSP data
  • carbon partitioning based on radiata pine relationships, as data for other species is limited.

A2.3  Area-weighted national average yield table

A national aggregate age class distribution was produced by using the IFS/FOLPI software utility AVGYLD (FRI, 1995) to calculate an area-weighted national crop type yield table and associated age class distribution from the individual NEFD crop types as at 1 April 2005.

A2.4  Issues

The underlying assumption is that the national average carbon yield table is representative of stands planted since 1 January 1990. Obviously the growth of individual stands will vary (see growth rate section earlier in this report).

The main problem with using the NEFD yield table as the basis for carbon yield tables arises from the relatively narrow focus of the NEFD Steering Committee. Yield tables are:

  • prepared as a basis for wood availability studies, ie, yields at the range of rotation ages modelled (20–40 but more typically 26–30 years)
  • based mainly on areas that will be harvested in the short to medium term from the large forest owners’ resource.

This means that:

  • yields and increments may not be accurate at other ages – for instance, NEFD yield tables may over-predict yield (and therefore carbon) at young ages
  • yield tables do not necessarily reflect future growth rates
  • yields may not be applicable to the small growers’ estate
  • the yield tables were prepared in 1995 for the NEFD crop types that existed at that time. Suitable yield tables do not exist for some of the crop types found today – eg, for production-thinned Douglas-fir, the waste-thinned yield table had to be used in East Cape and southern North Island
  • regime differences may not be explicitly captured in the yield tables at the time of silviculture, unlike yield tables produced using a stand growth simulation model.

Nevertheless, the NEFD yield tables are likely to remain the best published source of growth data suitable for national carbon modelling purposes until LUCAS is fully implemented.