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Carbon Forestry Could Save Marginal Farms

Sunday, July 03, 2011:

Cash from carbon makes forestry a much more attractive proposition than livestock farming on poorer hill country according to a collaborative study led by Crown Research Institute Scion for Waikato Regional Council. The study examined three aspects: the opportunity to the land owner, the opportunity to Waikato Regional Council, and investment structures for carbon forestry.

Generally it showed that by planting fast growing exotic trees now, landowners could expect positive cash flows from carbon within 5 years, depending on individual circumstances.

Study leader Graham West from Scion says that by providing an early cash flow from the sale of carbon credits, carbon forestry overcomes the typical 30-year delay in getting a return from forest planting. The study shows that for pruned Radiata pine, timber returns are around $90/ha/year on today’s prices. By combining timber returns with revenue from carbon, returns can increase more than five-fold to between $160-$520/ha/year for carbon prices of $7.50/t CO2-e to $30/t CO2-e.

“The economic benefits of carbon forestry are generally very positive as long as the appropriate sites are targeted,” says Mr West. For poorer classes of land, particularly eroding hill country, carbon forestry offers a number of financial and environmental advantages. The relative returns with livestock farming depend on livestock carrying capacity, the importance of current cash flow, tree species and management.

Waikato Regional Council senior manager John Simmons says the outcome of better land use offers great opportunities for the Waikato region. “Council sees opportunities for regional landowners to benefit from aggregation of credits, and is proposing a regional scheme whereby Council acts as facilitator between landowners and investors,” says Mr Simmons.

“Carbon forestry has for the first time made the cash flow possible to build resilience into farm incomes and help with succession. By aiding land use change, the typical challenges each generation of hill country farmers face of debt, erosion, and scrub reversion can be substantially mitigated.” These findings arise from a report written for Waikato Regional Council by Scion in collaboration with AgResearch and Hardwood Management Ltd. A copy of the report can be obtained from www.waikatoregion.govt.nz/carbonstrategy.

Study leader Graham West will be presenting at the country’s first Carbon Forestry event, Carbon Forestry 2011 planned for Auckland on 13-14 July. The event is already attracting huge interest from forestry, financial and investment companies. Full details on this year's carbon forum can be found on www.carbonforestryevents.com.

Credit: www.fridayoffcuts.com

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