No Minister

Billionaire Tree Huggers

I see some foreign reports about how planting a trillion trees or so around the world could do a great deal to plateau humanity’s GHG emissions in the atmosphere.

It’s an appealing idea for AGW fanatics who are running headlong into resistance on simply substituting fossil-fuels with power from windmills and solar panels, mainly because of unforeseen – at least by them – costs arising from the physics of energy production. The same physics constantly boasted about as being an unarguable basis for AGW catastrophe, other scientific variables barely getting a look in.

The resistance comes less from the small number of dreaded Climate Change Deniers – who can be easily demonised – than from ordinary voters who say that they care about GHG emissions, but still want the lifestyle and civilisation generated thereby. That group comprises two sets of people. First, those rich enough not to care about the increased costs of a Remuera Tractor, since they can take the hit in their stride and the vehicle itself is so useful getting up the mountains to the ski lodges, and being well protected from all those ants choking the streets.

My ride, Darlings!

The second group who are resisting this are people who aren’t that rich: middle and low-income folk. Taking the hit is not a good look and although they’re still quiescent in New Zealand in terms of votes, their resistance is that of passive-aggression, where they’re simply not cooperating with the game to the degree needed.

In the US the same tug of war is occurring between the environmental wing of the Democrat Party, who point to polls saying how concerned Democrat voters are about AGW – and their dismay at how little the Democrat bigwigs are featuring it in the debates. We will see if that changes.

Given all this, the obvious thing for any Left party to do is stick the costs to people who likely won’t vote for you anyway and are small in number.

In NZ that means traditional farmers and the provinces that depend on their wealth generation. The imposed, artificial costs will be many and varied, but one of the hidden costs has to do with this idea of beating AGW emissions by planting trees: a 2017 Green plan that nicely fit the AGW model, Winston Peter’s desire for eternal political life, and the similar desire of his deputy, Shane Jones, by offering a carrot to provincial voters.

It’s not propaganda that foreign companies already own about 70% of NZ forestry and that the new incentives to plant trees will make it even easier for them to buy farms to do so instead of running stock – or arable farming or horticulture. It will also mean that even more forestry will become foreign owned. In terms of the various international accords these foreign outfits – specifically the nations in which they’re based – will be able to offset their carbon emissions with the trees they plant here.

As Professor Woodford points out:

The carbon price could in time go to $100 or even higher. Even if it only goes to $40 per tonne, or even less, then the forests may never be harvested. The EU price is already over $40.

For big foreign entities, the notion of having within their portfolios some New Zealand forests for carbon farming looks very attractive. As part of a balanced portfolio, any risks can be managed. In relation to the low returns on equities that can be earned elsewhere in the global economy, the returns look truly stunning.

An overseas entity can buy the land, plant it in trees, receive some Government subsidies, and then sit back and take the stream of income from carbon credits over the next 28 years. And then write off the original investment in the same way that a spent mine is written off.

Sweet! A great deal for foreign corporates and rich people. Class warfare at it’s finest.
And this is already happening: recently farmland totalling more than 7000 hectares in Eketahuna was sold and another group of farms in Wairoa amounting to some 10,000 hectares – all to foreign interests and all for conversion to trees.

The starting point for carbon farming is to recognise that credits can only be claimed for one rotation of trees, typically around 28 years under New Zealand conditions for radiata pine, or longer for slower growing natives

At the end of the first rotation, the carbon credits that have been claimed throughout the growth cycle are a liability attached to the land title.  This means that the land can in all likelihood never be used for any other purpose than carbon forestry. This is because the carbon unit liabilities associated with the previous carbon credits would have to be repaid based on current value thereof.

In other words, we get an initial Meth hit from the incoming flow of funds to buy the land – and then spend the next 28 years in detox as we pay the foreign owners for the forestry carbon credits to balance off our own emissions elsewhere in the economy.
According to the NZ Forestry Bulletin, Jones’ billion trees mean 50,000 hectares a year will have to be taken out of production. But to achieve the Productivity Commission’s goals, 100,000 hectares need to be taken out of farm production each and every year for three decades.
That’s three million hectares: almost one third of our total farmland and judging by current sales and conversion data it’s not going to be crap land good for nothing else, but productive, food-producing soil.
This does not look like a good deal for New Zealand, but if you’re already rich it probably doesn’t matter, and if you’re both rich and foreign it really doesn’t matter.

Written by Tom Hunter

July 9, 2019 at 11:29 pm

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