4.0 Overview of the updated Draft Forestry Regulations
4.3 Carbon assessment methodology
What is carbon assessment?
Carbon assessment is the process of assessing the amount of carbon held within the live biomass of a tree (the trunk, branches and roots) and the dead biomass (the dead wood sitting on the forest floor- also known as woody and fine litter and organic soil carbon). Carbon is to be assessed using either of two methods - a look-up table approach or a measurement approach. The first draft of the forestry regulations (13 February 2008) described the look-up table approach for deforestation of pre-1990 forests. The new draft extends the look-up table approach for emissions and removals from post-1989 forests.
What will the forestry regulations describe for carbon assessment?
The forestry regulations will ultimately describe when and how these two approaches (look-up table and measurement) are to be used to assess carbon in pre-1990 and post-1989 forests. The measurement approach is not yet covered in the regulations but will be included in the forestry regulations in relation to post-1989 forest land at a future date as technical details are finalised.
What is the look-up table approach?
Look-up tables have been prepared to enable pre-1990 forest participants to determine emissions from deforestation and for post-1989 forest participants to determine their net carbon stock changes (that is, removals during forest growth and emissions during harvest).
The look-up tables for Pinus radiata were prepared by modelling the carbon content of an average forest, of a particular species, age, and region. Tables for other exotic species will apply nationally and not regionally because there is not enough data available to predict regional variations for the minor exotic species. Further tables will cover emissions from the post harvest decay of the below ground biomass (the roots) and the woody and fine litter left on the forest floor.
A look-up table approach for measuring carbon stock change is:
- simple to apply
- affordable to forest landowners
- achievable in the available timeframes
- administratively simple
- able to be applied retrospectively.
What is involved in the measurement approach?
The measurement approach is proposed to be introduced in subsequent regulations. It involves sampling a forest using standard forest inventory procedures where measurements of tree diameter and height are taken within sample plots randomly spread across the forest. It will also be necessary to determine wood density.
The field data collected will be used in a series of empirical equations to calculate total tree volume, total forest biomass (both above and below ground) and hence total carbon stocks. A mechanism will be provided to extrapolate these figures backwards to 1 January 2008 and forwards to mandatory emission return dates. A MAF ETS website will allow participants to calculate their carbon stocks using their field measurements. The measurement approach is more expensive than the look-up table approach because it requires field measurements but it provides a more accurate site specific calculation of total carbon.
The method by which wood density is to be determined is not yet finalised. If the method requires samples (either wood cores to measure density directly or the prediction of density from soil samples and mean annual temperature) there will be an additional cost, but this will be minimised if the samples are taken at the same time as the field measurements. On report back, after the consultation period, the regulatory impact statement will provide more analysis of all the costs to participants of the density option and of the measurement approach as a whole.
4.3.1 Carbon assessment for deforestation of pre-1990 forests
Under the Bill if passed, forest landowners will need to report deforestation that occurs from 1 January 2008 onwards for forests on pre-1990 forest land. They will therefore need to know the size of their potential deforestation liability for the purposes of planning and financial reporting as soon as possible.
What is proposed for deforestation of pre-1990 forests?
Under the draft regulations, forest landowners will use the look-up table approach to calculate emissions resulting from deforestation of exotic forests. The look-up tables provide total carbon content expressed in tonnes of CO2 per hectare at a given age of the forest. Because deforestation involves a change of land use away from forestry the look-up table assumes that all carbon (above and below ground) is emitted on harvest. A measurement approach for carbon assessment in pre-1990 forests is not proposed at this stage.
What information must I provide with a pre-1990 emissions return?
Participants must collect and report the following information as part of their emissions return:
- forest area cleared
- forest type cleared
- age of forest cleared
- region (for pinus radiata)
- legal description of the land
- a geospatial file of the area cleared.
4.3.2 Carbon assessment for post-1989 forests
Under the Bill if passed, post-1989 forest participants that elect to join the ETS will be required to submit a mandatory return detailing net carbon stock changes at the end of the compliance period (2012). Participants will also be able to submit optional interim returns at yearly intervals.
What is proposed for post-1989 exotic forests?
Ultimately participants will have the ability to assess carbon stocks for post-1989 forests using either the measurement approach or the look-up table approach. There will be rules that govern when each method can be used and these are described below.
The look-up table approach should be ready for use soon after the legislation is passed. The measurement approach is more complex and will not be ready for use before early 2009. Participants who are required to use the measurement approach will therefore be able to use the look-up approach initially and then switch to the measurement approach when it is available with no loss of entitlement.
Which assessment method can be used for post-1989 exotic forests?
Participants with total post-1989 forest land holdings registered of more than 50 hectares of exotic species will be required to submit a mandatory return using the measurement approach at the end of the compliance period.
During the intervening period, participants in the ‘greater than 50 hectare' category may also submit voluntary interim emission returns at not less than yearly intervals. When the look-up table approach is used, reconciliation will be carried out when the next submission using the measurement approach is made, with any under or over payment corrected.
In contrast, participants with total post-1989 forest land holdings registered of less than 50 hectares of exotic species will be given the option of using either the look-up table or the measurement approach for their mandatory emission return at the end of the compliance period. Post-1989 participants in this ‘less than 50 hectare' category would need to decide which approach they wished to use before they make their first mandatory emission return, and would then need to use that same approach for all subsequent mandatory emission returns until a specified period after harvest. Once a measurement approach is used, the participant will need to use forest specific data to recalculate the opening carbon stock balance when they entered the ETS.
The following matrix summarises which assessment method may be used where total post-1989 forest holdings in the ETS are greater or less than 50 hectares.
| Less than 50 hectares | Greater than 50 hectares | |||
|---|---|---|---|---|
| Interim return |
2013 mandatory return |
Interim return |
2013 mandatory return |
|
| Look-up Tables | Yes | Yes | Yes | No |
| Measurement | Yes | Yes | Yes | Yes |
Why provide a look-up table method as an alternative to the measurement method?
The cost per hectare of the measurement approach increases as the forest size decreases and could become a disincentive to participation for small forest owners. The compliance cost of the measurement approach is estimated to vary between $190/ha/event for 10 hectare forests down to $15/ha/event for the largest forests (i.e. forests over 10,000 hectares). The look-up table approach, in contrast is less costly because no field measurements are required, but can be less accurate because national average, rather than site specific parameters are used in the tables. For these reasons participants with smaller forests will therefore be given greater flexibility over choice of carbon assessment method.
Why are there different rules governing which carbon assessment method can be used?
As the data in the look-up tables is based on national or regional averages the results will under or over estimate carbon stocks if the site parameters differ from the national averages used in the tables and will, in some instances, over or under allocate NZUs. In order to reduce the risk of manipulation of the results and hence the risk to the Government over-allocating NZUs, there needs to be a limit on the size of a forest that can use the look-up method for the mandatory return.
Officials estimate that 91% of potential post-1989 participants fall below the proposed 50 hectare threshold and collectively own around 30% of the estimated total post-1989 forest estate. The 50 hectare threshold therefore allows a large number of owners who are more likely to find the compliance cost of the measurement option onerous, to use the simpler and less expensive look-up table method.
What is the difference between the pre-1990 and post-1989 exotic look-up tables?
The post-1989 look-up tables are developed from the same data as the pre-1990 look-up tables in Schedule 4 but with two variants:
- Pre-1990 look-up tables begin at age 9 years as the legislation requires that emissions from deforestation of forests younger than 9 years are calculated from the age of the previous forest. Post-1989 look-up tables begin at age 1.
- Pre-1990 look-tables are based on second rotation tables as deforestation after 2008 will mostly be second rotation forest (second rotation tables contain carbon from the gradual decay of the residual carbon from the previous rotation). Post-1989 look-up tables are for first rotation forest and the harvest scenario is handled in a different way.
What information must I provide with a post-1989 emissions return?
Post-1989 forest land participants must collect and report the following information for their registered forest area and any area cleared since the previous return:
- forest area
- forest type
- age of forest
- region (for Pinus radiata)
- date of harvest
- description of harvested area.
Will liability for carbon stock losses be limited by credits received?
The ETS will limit the liability for carbon stock losses due to harvesting, deforestation and natural events to the units issued on that piece of land from 2008. This provision is part of the Kyoto Protocol and is referred to as the AR Debit Rule, or the Fast Growing Forest Fix (FFF). New Zealand will not have to surrender more units (as a result of harvesting, deforestation etc) than it receives for carbon sequestration in forests over the first commitment period (2008-12) of the Kyoto Protocol.
How will the ETS calculate the units received on a post-1989 forest since 2008 for a particular piece of land?
In order to apply this rule, a method will be developed to record an auditable trail of NZUs issued and surrendered in relation to any particular piece of forest land. It will mean that whenever an emission return is submitted that involves a reduction in carbon stock in some piece of the forest land (for example when part of the forest is harvested) the participant will also have to calculate the total credits issued on that particular piece of land since 2008. If the total units received since 2008 are less than the emissions due to harvesting the participant's liability will be capped at the lower figure.
The process to calculate and record units issued against a particular piece of land will introduce some complexity to the process. The final details of this process have not yet been determined and will be the subject of further consultation at a later date. In the meantime responses are invited on the design principles that are outlined here.
It is proposed that:
- If a post-1989 forest participant has elected to use the look-up table approach, the calculation of credits from 2008 can be made from the look-up tables using the age of the forest in 2008 and at the time of filing the return, as well as the area of the piece of land that has reduced in carbon.
- If the participant has elected to use the measurement approach (once it has been established) the participant will be required to divide their forest land holding into carbon assessment areas (CAA) which could be defined as areas of similar age class and species. The participant will record a carbon stock balance allocated against each CAA from 2008 until the date of the current return. This option may require that the participant nominate the CAAs within their land holding at the date of their first return rather than at the registration date.
The FFF liability provisions will ensure that the carbon stock balance allocated does not fall below zero, that is, the participant is not held liable for more than the credits received on that part of their forest land holding (the CAA).
What is proposed for post-1989 indigenous forests?
Indigenous forests require a different assessment methodology to that used for exotic forests. The remoteness, rugged terrain and a lack of homogeneity in a large part of the eligible indigenous forests would mean that a measurement approach would be prohibitively expensive. There is also significantly less data available on indigenous growth rates than there is for exotic growth rates. In addition, carbon sequestration rates are low compared to exotic forests, especially given the young age of eligible post-1989 indigenous forests.
Research work using available data indicates that indigenous sequestration rates do not vary significantly amongst broad vegetation types, especially during the first 30 years of the forest life. Carbon will therefore initially be calculated for an indigenous forest using a single sequestration rate of 3 tonnes CO2/ha for all post-1989 indigenous forests. (This is reflected in the look-up table for indigenous forest in Table 2 of Schedule 5).
Results from the future measurement of actual sample plots within indigenous forest, being carried out by the Ministry for the Environment as part of the LUCAS program, will provide a more accurate assessment of this figure. By that stage the results of further research work will be available and a decision can be made to increase the rate if the results indicate that such an increase is warranted. It is proposed that, subject to the Bill permitting this, indigenous forest owners would then be able to adjust their cumulative returns over the first compliance period on the basis of the new sequestration rate.
Officials will continue to investigate the feasibility of a measurement approach to assess carbon sequestration in indigenous forests as a future alternative to the proposed flat rate.
How will research inform carbon assessment?
A long-term research programme is required to fill the current gaps in our knowledge base for the measurement approach. Until better information exists, the methodology will use the best available models and functions.
A science programme will aim to provide as much new data as possible before the end of the first compliance period (2012). This will be incorporated into improved models and processes for final measurements at the end of the first compliance period.
How will stakeholders be involved in development of the measurement approach?
A stakeholder group consisting of end-user representatives has been established and the Māori Reference Group Executive will consider and provide feedback on the forestry aspects of the ETS design. A group of technical experts has been established to provide feedback on the technical aspects of the proposed methodologies.
Contact for Enquiries
Sustainable Land Management and Climate Change
MAF
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PO Box 2526, Wellington
Tel: 0800 CLIMATE (254 628)
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