Before human settlement 1000 years ago New Zealand was almost entirely covered with primeval forest up to the mountain timberline with an estimated 80% total forest cover.
Polynesian and European settlers have removed two thirds of the original forest, converting large areas to grassland causing major environmental damage. Today forests cover about 25% of the country.
New Zealand has extremely high levels of soil loss due to erosion. At least 10% of the 12 million hectares currently in pasture is farmed unsustainably due to erosion.
New Zealand Emission Trading Scheme (NZ ETS) became law in November 2008 and includes forestry. New Zealand leads the world in developing domestic legislation that specifically provides for forests to be grown for carbon sequestration and storage, notably the Permanent Forest Sink Initiative scheme (PFSI).
Permanent Forest Sink Initiative (PFSI)
The PFSI is a carbon forestry mechanism designed and regulated by the New Zealand Government to promote the establishment of permanent forests for carbon sequestration on previously cleared and now unforested land. To be eligible the projects must comply with Kyoto Protocol forestry rules.
The mechanism enables land owners to earn Kyoto compliant emission units for carbon sequestered in these forests during the Kyoto first commitment period from 01 January 2008 to 31 December 2012. Projects must comply with Kyoto Protocol forestry rules. PFSI forests are required to be maintained as continuous canopy cover forests for a minimum of 99 years. Limited, low intensity harvesting is permitted on an individual tree or small coupe removal basis.
These restrictions and other obligations are recorded in a covenant between the Crown and the landowner and registered against the land title. The landowner is liable to the Crown for any decreases in the post-2007 forest carbon pool. For example, if forest biomass loss occurs because of illegal harvesting or by natural reversals such as fire or windthrow, the land owner must surrender Kyoto compliant AAUs to the Crown. The key distinction between NZ ETS post-1989 registered forests and PFSI forests is they are managed under a sustainable forest management regime principally for the purpose of carbon sequestration and long term carbon storage and cannot be clearfelled at any time.
Although ERA is not working directly in New Zealand, we have bought and sold or transferred more than 300,000 PFSI tonnes.