The Horehore Station sheep and cattle farm occupies 1,600 hectares on the North Island of New Zealand. Its jagged hills and steep ravines are covered in fertile green grass. It is productive agricultural land of good quality, but it will soon cease to be a farm.
The owner, John Hindrup, bought it in 2013 for NZ$1.8 million (BRL 5.8 million) and sold it this year for 13 million (BRL 41.9 million). The profit is due to a new and profitable industry in the country: investors will plant trees all over the land and make money not from the sale of wood, but from the carbon that the trees will suck from the atmosphere.
This crop has become a key element of New Zealand’s drive to become carbon neutral by 2050. Under an emissions trading program, companies in carbon-intensive industries must buy credits to offset their emissions.
Many are purchased by forest owners, and as the price of credits has risen sharply, forestry investors have started to buy farms to plant trees.
The loss of farmland to carbon farming, however, could jeopardize one of the country’s main economic activities and transform the appearance of idyllic rural areas. Farmers, ranchers and analysts have been expressing fears that sheep and cattle ranching, one of the biggest employers and major export sectors, is headed for a sharp decline.
“It’s a land-use transformation that surpasses anything seen in the last hundred years,” says Keith Woodford, honorary professor of agronomy and food systems at Lincoln University. “We need to make sure this is what we want.”
The New Zealand emissions trading program is the only one that allows companies to offset 100% of their emissions from forestry. The country has bet so heavily on carbon farming in part because it hasn’t been doing enough to reduce its emissions.
They are minimal on a global scale, but they were still on the rise before the pandemic; in per capita terms, the country is one of the biggest carbon polluters among developed nations. The agricultural sector is the largest national emitter of greenhouse gases, largely due to the methane expelled by animals.
Woodford says current decisions, taken in response to the long road to combating climate change, are essentially setting out that land use will not change for decades. Carbon forests must remain planted with trees, and logging in these locations involves a replanting obligation — often 28 years later — or a financial penalty.
The extent of farmland sold to forestry interests has already greatly increased, with many of the sales made to foreign buyers from countries such as Australia, Malaysia and the US.
In 2017, cattle and sheep farms sold in their entirety for reforestation totaled about 4,000 hectares, according to a report by Beef + Lamb New Zealand, a livestock organization. Two years later, the figure had already reached 36,500 hectares. Sales declined at the start of the pandemic, but are expected to have picked up again in 2021.
They have also risen while the price of carbon credits has tripled in the last three years, reaching 80 New Zealand dollars (R$ 260). The increase reflects an imbalance between supply and demand, as emissions in the country remain high, and the influence of speculators — as the country needs to tighten its climate policy in order to fulfill its commitments.
At current prices, the credits can generate income of over NZ$1,000 (BRL 3,200) per year for 0.5 hectare of carbon cultivation, compared to NZ$160 (BRL 515) for 0.5 hectare of farms. of sheep and cattle.
David Hall, a researcher at the Auckland University of Technology, says that in the next few years the price of credits will likely exceed NZ$100 (R$320), but that it will take a price of more than 200 dollars (R$640) to motivate changes. in the transport sector needed to achieve the goal of carbon neutrality.
It is unclear how many trees New Zealand needs to have to achieve this goal. It will depend in part on how quickly the country converts to a low-emissions economy, with technological advances that reduce the need for carbon cultivation.
By current projections, the New Zealand Climate Change Commission estimated the number of 1.1 million hectares of carbon forests by 2050, but another model identified the need for more than 5.3 million hectares – or 70% of the area currently occupied. by sheep and cattle farms in the country.
The elimination could mean the loss of 2 billion New Zealand dollars (R$ 6.5 billion) a year in exports, according to Woodford. Meat and wool are New Zealand’s second largest export category, accounting for 15% of the total.
For rural communities, carbon farming risks creating “green deserts” of trees that generate few jobs. According to a report from the forest management department, permanent carbon cultivation guarantees one job per year for every 1,000 hectares post-planting. Reforestation for logging generates dozens of jobs during planting and harvesting, but very few in the nearly three decades between. Raising cattle and sheep ensures 13 full-time regular and seasonal jobs per 1,000 hectares.
Horehore Station employed three people full-time and many more part-time, such as shearers, fence builders and helicopter pilots, according to Hindrup. And there were also truck drivers, cafe owners and others who depended indirectly on farm income.
“It will demolish these communities, decimate regional economies,” says farmer Kerry Worsnop, a councilor for Gisborne. A recent report concluded that if all the steepest terrain in the region were converted to permanent carbon forest, half of the jobs (10,000) would disappear.
New Zealand’s environmental goals are putting different pressures on farmers. The government has considered changing the rules to cool sales of rural land, as well as combating concerns about the potential harm that carbon farming could do to biodiversity. But he backed off in the face of opposition from Maori landowners.
Soon, after being exempted from the carbon trading program, the agricultural sector will face financial penalties for its emissions. And new environmental regulations are prompting protests by farmers, who have filled city streets with their tractors.
“It got too much for my mental and physical health,” says Charlie Reynolds, who sold his farm this year after facing a NZ$250,000 bill to build fences to meet the new regulations.
Ultimately, the extent to which New Zealand’s farmland converts to carbon forests will be determined by farmers’ choices. Some are planting trees on their land. Others make money from both livestock and carbon, reforesting underutilized areas of their farms.
