How New Zealand’s climate struggle is threatening its iconic farmland

GISBORNE, New Zealand — Horehore Station, a sheep and cattle ranch, sprawls across 4,000 acres on New Zealand’s North Island, its jagged expanse of jagged hills and steep ravines covered in lush green grass.

It is good and productive farmland, despite the rugged landscape. But soon it will no longer be a farm.

The land’s owner, John Hindrup, who bought it in 2013 for NZ$1.8 million, sold it this year for NZ$13 million, or $8.2 million. His windfall came courtesy of a lucrative industry recently in New Zealand: forestry investors will cover the property with trees, making money not from their wood, but from the carbon the trees will absorb from the atmosphere.

“If you had told me this two years ago, I wouldn’t have believed you,” said Hindrup, 67, of skyrocketing land values.

So-called carbon farming has become a key element of New Zealand’s push to become carbon neutral by 2050. Under a market-based emissions trading program, companies in carbon-intensive industries they must buy credits to offset their emissions. Many of those credits are bought from forest owners, and as the price of credits has skyrocketed, forest investors have tried to cash in by buying ranches.

The emissions trading program is New Zealand’s most powerful tool for reducing greenhouse gases. But the loss of ranch land to carbon farming could threaten one of its most iconic industries and change the face of idyllic rural areas. Farmers and agriculture experts have raised concerns that sheep and cattle farming, a major employer in many communities and one of the country’s top export sectors, is destined for significant decline.

“We’re talking about a transformation of land use beyond what we’ve probably seen in the last 100 years,” said Keith Woodford, honorary professor of agriculture and food systems at Lincoln University in New Zealand, who is also a consultant. of the industry. “It’s a huge land use change, and we just need to make sure that’s what we want.”

The country’s emissions trading program is the only one in the world that allows companies to offset 100 percent of their emissions through forestry. (The United States has regional carbon trading initiatives, but no national program.) New Zealand has gone so far into carbon farming in part because it is not doing enough to reduce emissions.

While small on a global scale, New Zealand’s emissions were still rising before the pandemic, and it is one of the largest carbon polluters among developed nations on a per capita basis. The agricultural sector is New Zealand’s largest emitter of greenhouse gases, much of it through methane released by animals.

Today’s political decisions, in response to the long way to go to address climate change, are essentially blocking land use for decades, Woodford said. Permanent carbon forests must remain planted with trees, and timber forestry earning carbon credits must replant trees after they are harvested, usually in year 28, or face a financial penalty.

The number of ranches sold to forestry interests has already skyrocketed, with many of the sales going to foreign buyers from places like Australia, Malaysia and the United States. In 2017, cattle and sheep farms sold entirely for forestry totaled about 10,000 acres, according to a report commissioned by Beef + Lamb New Zealand, an industry group. Two years later, the figure was 90,000 and, although sales fell early in the pandemic, they are expected to have increased in 2021.

Land sales have grown as the price of carbon credits has tripled in the last three years, reaching NZ$80. The increase reflects an imbalance between credit demand and supply, as New Zealand’s emissions remain high, as well as the influence of speculators who expect carbon credit prices to continue rising as the country faces the need to further tighten climate policies to achieve their commitments.

At current prices, the credits can generate carbon farming income of more than NZ$1,000 per acre per year, compared to $160 from sheep and cattle ranches.

David Hall, a climate change policy researcher at Auckland University of Technology, said the price of credits is likely to exceed $100 in the coming years, but it will take a price of more than $200 to drive changes in climate. the transport sector. that are necessary to achieve the goal of carbon neutrality.

It’s unclear how many trees New Zealand needs to meet that commitment. It will depend in part on how quickly the country transforms into a low-emissions economy, with technological advances reducing the need for carbon farming.

Under current projections, the country’s Climate Change Commission pegged the figure at 2.7 million acres of carbon forest by 2050, but other models saw a need for more than 13 million acres, about 70 percent of the area. occupied by sheep and meat farms in New Zealand. .

Cutting 2.7 million acres from the sheep and beef sector could translate into a loss of NZ$2 billion a year in exports, Woodford said. Meat and wool are New Zealand’s second largest export category, totaling around $12 billion, or 15 percent of total exports.

Without an obvious industry to fill the export gap, the exchange rate would come under downward pressure, eventually driving up import costs for New Zealanders, Woodford said. “This by itself is not going to cause a catastrophe, but it is certainly significant,” he said of the loss of large areas of cattle and sheep farms.

For rural communities, carbon farming risks creating “green deserts” of trees that generate few jobs. Permanent carbon forestry provides about one job a year for every 2,500 acres after planting, according to a report by Te Uru Rakau, New Zealand’s forestry department. Timber forestry generates dozens of jobs during planting and harvesting, but few during the nearly three decades in between. Cattle and sheep farming provide regular and seasonal employment of about 13 full-time jobs per 2,500 acres.

Horehore Station, the ranch that was recently sold, employed three people full-time and many others part-time, such as shearers, fencers and helicopter pilots, Hindrup said. Then there were the truck drivers, cafe owners, and others who were indirectly dependent on income from the ranch.

“It’s just going to demolish those communities, decimate those regional economies,” said Kerry Worsnop, a farmer and council member from Gisborne, one of a dozen areas concerned about converting ranches to forest.

A report from a business advisory firm found that if all of the steepest and most challenging land in the Gisborne area were turned into a permanent carbon forest, almost half of its jobs, around 10,000, would evaporate.

Farmers face a number of pressures from New Zealand’s environmental goals. The government has considered rule changes that would take some pressure off rural land sales, but backed off in the face of opposition from Maori landowners. As more farmers sell their land, operating costs will rise for those left behind as they share expenses like veterinary care, said Toby Williams of Federated Farmers, an industry group.

In addition, the agricultural sector will soon face a financial penalty for its emissions after being exempted from the carbon trading program. And new environmental regulations have sparked farmers’ protests in which they have clogged city streets with tractors.

“It just wasn’t worth my mental health, my physical health,” said Charlie Reynolds, who sold his ranch this year after facing a $250,000 fencing bill to comply with new regulations.

Ultimately, the degree to which New Zealand’s ranches are converted to carbon forests will be determined by farmers’ choices. Some are planting their own properties in trees. Others earn income from both livestock and carbon by converting underutilized ranch areas, such as erosion-prone ravines, into forest.

Niven Winchester, an economics professor at Auckland University of Technology, said parts of the economy that contribute significant amounts of greenhouse gases, such as agriculture, should be reduced.

“As a society, we have to do something about climate change,” Winchester said, “and it’s going to be expensive.”

Leave a Comment

Your email address will not be published.