Auckland, 16 May 2016 - More than 1.3 billion trees need to be planted in New Zealand forests to meet environmental and climate change obligations, say Jeremy Keating and Warwick Searle, Directors of Agribusiness at CBRE New Zealand and members of the New Zealand Institute of Forestry.
Planting trees is one of the most effective ways of contributing to the targets New Zealand signed up to at the historic signing of the Paris Agreement on climate change last month, says Jeremy Keating.
“No matter how much emissions are cut, without more trees in the ground we won’t get to where we want to go. And we stand at a historic moment right now, as the next four to six years will bring the owners and managers of a significant area of forests to a key decision point around future land use.”
Considerable amounts of forestry land was planted in the early 1990s; the so-called ‘wall of wood’, says Keating.
“Because forestry crops have a typical 27 year rotation, the plantings of the early-mid 1990s are nearing maturity, so we could see an additional 250,000 hectares harvested over the next 10 years over and above the usual area harvested. And there’s no certainty that this land will go back into trees.
“The sector needs to not only replace those plantings, but significantly grow New Zealand’s land area under trees. Another key issue is that much of these plantings were by retail-type investors through syndications and private forests. These investors are unlikely to have the appetite to invest in a second rotation.”
The Pure Advantage report, Our Forest Future argues that planting huge new blocks of permanent native forest and fresh high-carbon commercial forests could avoid large areas of land being lost to erosion, help off-set agricultural emissions and put the country on course for a net-zero greenhouse gas future.
“Our Forest Future argues for a new national forest strategy that would ultimately create 1.3 million hectares of new forest,” says Warwick Searle, who adds that in pre-European times, 85% of the country was covered in trees but today only around 30% remains planted.
“Although radiata pine currently comprises 90% of all New Zealand plantation forests, the tens of thousands of hectares that are set to become available over the next few years create opportunities to widen the thinking.
“The number one issue is who is going to invest in putting trees in the ground, and what are they going to plant? Land prices are key. This is a class of land that will really attract radiata or manuka planting. It could attract sheep or beef uses, but they would only take up a fraction of the land available and the economics will rarely stack up, as the blocks are in quite remote locations with challenging topography.”
So, could manuka be an answer? In some instances yes, says Keating.
“There has been significant interest and private equity move into the beekeeping industry over the last few years, thanks to the prices that manuka honey can achieve. However, there are tricky issues to solve around the placement of hives - what’s known as the ‘boundary hiving’ issue. The solution could require a code of conduct within the industry, or even legislation, before it can move ahead at real scale and give parties the confidence to invest in large scale manuka planting.”
What’s more likely and needed in the short term says Keating is investment in traditional forestry planting, although new models are coming through to create attractive investment opportunities.
“In our work to advise on property transactions throughout the country across a range of land uses, we’re seeing renewed traction gained through long term Forestry Rights, particularly where landowners have some form of equity stake in the trees rather than straight rental returns.
“A great example of this positive way forward has been shown at Woodhill Forest, where a deal has just been signed with the landowners Ngā Maunga Whakahii o Kaipara Investment Limited and a large scale forester to create a long-term, multi-rotation lease of the land with Matariki Forests to invest in planting going forward.”
“NZ Inc. needs balanced and sustainable land use. As we have seen with the recent dairy downturn, we need the diversity of beef, sheep, honey and forestry to make better use of all of our land classes and ensure we are economically resilient. Forestry is a terrific long-term opportunity for NZ Inc.
“We therefore appeal to land owners of all types to consider the long-term investment and environmental opportunities offered by forestry. Trees need to be planted in massive numbers and there are many ways in which to become involved.
“Whatever forest owners and managers decide to do, forward planning and decisive action is required, together with an ETS framework that adequately rewards forestry for the carbon sequestered, because the only thing that will get us to our national environmental obligations and economic goals is to plant trees.”
View the New Zealand Herald article here
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