10 Feb 2010
A pioneering deal involving a farm-to-forestry conversion and the subsequent sale of carbon credits from the forests is being praised by everyone involved.
Under the deal, the Lake Taupo Protection Trust – funded by the government, Environment Waikato and Taupo District Council – has agreed to compensate two Ngati Tuwharetoa farming operations for reducing the amount of nitrogen entering the lake by 22,000 kilograms a year. Nitrogen leaching to the lake increases algal growth and decreases water clarity.
Environment Waikato chair Peter Buckley said the agreement clearly demonstrated the potential economic benefits available to farmers, foresters and those needing carbon credits under emissions trading legislation while also protecting Lake Taupo’s water quality. “It’s an inspired arrangement that shows the potential of carbon accounting to deliver much wider environmental benefits in New Zealand – hats off to Mighty River Power, Puketapu 3A Incorporation and the Lake Taupo Protection Trust,” he said.
As part of the change, a Tuwharetoa entity, Puketapu 3A Incorporation, will convert 500 hectares of farmland to forestry and sell the carbon credits it gains to electricity generator Mighty River Power under the Emissions Trading Scheme. The involvement of both nitrogen reductions and carbon trading is the first of its kind in New Zealand.
The Puketapu 3A Incorporation has a history of responsible environmental management on its properties, winning several farm environment awards in 2006 for its operations at Moerangi Station. The station, which is understood to be one of the two properties involved, is in located in the catchment of the Kuratau River which drains into the southwestern corner of Lake Taupo.
“This is the sort of innovation envisaged when Environment Waikato established its Variation 5 land use policy change to protect Lake Taupo,” said Cr Buckley.
“Any ongoing net financial gains to the parties involved will depend on a variety of factors but clearly both the Puketapu 3A Incorporation and Mighty River Power see good prospects from the arrangement.
“For its part, EW will continue to support these types of arrangements and will be watching developments to see what implications they have for the regional economy and the environment,” Cr Buckley said.
Environment Minister Nick Smith said the deal demonstrates the importance of the relationship between the Crown and Maori on afforestation.
“The ETS provides the financial incentives for landowners to improve the environment by planting trees and reducing nitrate pollution. The parties in this afforestation project have made it plain it would not be occurring if the government had not settled the ETS last year. This complex scheme encourages those that burn fossil fuels to contribute to forest planting."
Lake Taupo Protection Trust’s aim is to cut the amount of nitrogen entering the lake by 153,000 kg a year by 2018. The 22,000 kg reduction being achieved through the deals with the two Ngati Tuwharetoa entities sees the Trust about a third of the way towards its target.
Source: Environment Waikato, NZ Government, Ballance media releases
