While the report does not reflect a regional position, the intent was to better understand the impacts of carbon farming and encourage ongoing conversations about the opportunities and challenges presented by the Emissions Trading Scheme (ETS).
The Tairāwhiti Economic Action Plan (TEAP) Operations Group endorsed releasing the report publicly.
Considering the social, economic and environmental impacts of permanent carbon farming, the report also outlines the unintended consequences that could be detrimental for Tairāwhiti.
Due to carbon prices, the financial returns for permanent carbon farming (until maturity) are now, on average, surpassing farming and production forestry.
About 188,051 hectares of land in Tairāwhiti is exotic forestry, with 54% of this planted post-1989 and therefore eligible for permanent carbon farming under the ETS. Of that 54%, there is 57,673 hectares of exotic forest currently registered in the ETS, meaning a further 47,000 hectares could be registered.
This region may be more heavily impacted by permanent carbon farming due to the high percentage (83%) of Land Use Capability (LUC) 6-8 grassland. If all LUC 6-8 grassland and post-1989 forestry went into permanent carbon farming, over time up to 10,000 jobs may need to transition to other work as the only real employment with permanent carbon farming is in the first year of planting.
Even with high carbon prices, not all eligible land will transition to permanent carbon farming as this depends on landowner intent which can change over time." However, for every 1,000 hectares that transitions, on average seven direct jobs and ten indirect jobs will be lost." The number of jobs lost per 1,000 hectares would decrease with continuous cover forestry.
The average wage is also $29,000 less than production forestry and $13,800 less than livestock farming.
Current ETS regulations are heavily stacked against transitioning to native forest, despite the positive biodiversity outcomes and potential for significant employment if the transition process is done properly.
Without regulation, there is a risk of under-investment that could result in poor transition and minimal employment outcomes.
The TEAP Operations Group will provide the report to Government ministers, asking they specifically consider the Tairāwhiti region in relation to the national emissions reduction plan and ETS changes.
The full report can be viewed here.
PublishDate: 24 September 2021