The fervour with which global warming, Kyoto and carbon credits are now discussed politically and within mainstream media nationally and internationally begs the question of what carbon value is stored in New Zealand forests. Before I attempt to answer that a basic overview of the global warming industry is appropriate.

The global warming industry springs from the contention that human activity has increased the release of “greenhouse gases” in to the atmosphere forcing an increase in temperatures around the globe. Carbon dioxide is the greenhouse gas most closely linked with human activity and measurement and monitoring of carbon volume changes has become the universal measure of environmental effort.

The greenhouse gas affect is this; as greenhouse gases such as carbon dioxide increases in the atmosphere then these gases act as a skin in the atmosphere trapping heat from escaping into space. Human activity that leads to these increases include the burning of fossil fuels, the proliferation of grazing animals (belching releases methane gas) and the burning of rainforests. Conversely, the establishment of forests pulls carbon out of the atmosphere, a good thing from a global warming perspective.

The Kyoto protocol is a government to government agreement sponsored by the United Nations that sets targets for carbon emissions across stated commitment periods. Where a country betters a target they are considered good international citizens and get paid for their “credits”, where they miss the target they get penalized and must pay for the carbon overrun. Acceptance of the Kyoto protocol has been voluntary and while Europe, including Russia has made the commitment, the United States, Australia and China have not. Consequently, two international markets have developed for carbon credits, the Kyoto credits (centered on Europe and government endorsement) and the “grey market”(centered on North America and commercial evolution). The European trading scheme (supported by all members of the EU) trades at a premium over the more speculative grey market is discounted (as there is no international standard for this market). The universal definition of a carbon credit is one tonne of CO 2.

New Zealand has ratified Kyoto and, unfortunately, appears certain to undershoot its emission target for the first commitment period (ends in 2008). As such NZ will be one of the baddies that has to purchase credits while setting in train policies to reduce its emissions or improve its sequestration. The New Zealand government has also created a level of controversy by claiming the credits associated with forests whether they are state owned or not. Forest owners have universally decried this as institutional theft of property rights and this has occurred at a time when forest area in New Zealand is reducing, exacerbating the carbon deficit the country faces.

It is also worth noting that while the global warming and carbon credit industry is huge internationally there is still strong contention that the scientific basis for linking human emissions to increase in world temperatures is not well proven and current temperatures are not as high as world temperatures in mediaeval times. Irrespective of the science, the reality is that environmental accounting is entrenched at a political level, is strongly promulgated by the United Nations and is here to stay.

The science of carbon monitoring is also a little hazy and there is a dichotomy between trading credits and the means used to define the credits. In New Zealand the calculation of carbon credits is evolving as this is written and the next part of this series will provide insight into how carbon monitoring will be applied in New Zealand forests.

Article File Note: Andy Dick is a Senior Consultant with Interpine Forestry, currently reviewing carbon monitoring and valuation strategies for the NZ and the International forest industry.

For more info on what Interpine is doing with Carbon Assessment see the following articles: