Carbon offsets – keeping it real!

by frog

Simon Johnson is a conservationist, tramper, accountant, former DoC worker and resource management consultant. Simon also blogs periodically at Hot-Topic.co.nz. In this guest post he writes about carbon offsetting from the point of view of a carbon forest.

I am one of the trustees of a small 47-hectare carbon forest sink and native re-vegetation project and mountain bike park, “Project Rameka”, in the east Takaka hills in Golden Bay.

It’s really a response to climate change made by two of my old friends, Bronwen Wall and Jonathan Kennett, who bought the land in 2008. Bronwen and Jonathan decided to apply their experience organising native planting projects in Wellington to climate change after reading the 2007 fourth report of the International Panel on Climate Change (IPCC).

It’s been embraced enthusiastically by the Golden Bay community who do the planting, pest control and track work through Project Rameka Inc

The land is owned by a trust and I am one of the trustees. I did the early accounting for the trust and prepared the application to get the land into the Permanent Forest Sinks Iniative (PFSI).

In return for a 50-year covenant restricting the land use to forest, we receive about 800 carbon credits assigned amount units per year for Project Rameka. These units started life as part of New Zealand’s 1990 baseline amount of carbon credits under the Kyoto Protocol.

How many credits we get is based on the amount of carbon withdrawn from the atmosphere by the trees. Thanks to the Golden Bay weather, plants grow really quickly. So we really are storing carbon. We have seen 3cm annual growth rings in the few pines we have removed.

For a couple of years we didn’t do anything with the units. They sat in our account at the NZ Emissions Unit Register (the ‘bank’ for carbon credits). We initially thought the units could be a revenue stream to fund more traps or native seedlings. However the many donations to the project have always kept ahead of the costs.

We also thought that if we owned these units then we would be keeping them out of the hands of emitters so possibly we might even be reducing New Zealand’s emissions as well as sequestering carbon.

As we began to understand the New Zealand emissions trading scheme (NZETS), we realised that the good done by the Permanent Forest Sink Iniative couldn’t make up for the design flaws in the NZETS, as they are joined at the hip. Both schemes create and use carbon credits that are bought, sold and have prices. We could say that the PFSI and the NZETS are both limbs connected by the blood flow of carbon credits to the body, the international carbon trading market.

So when we were approached by Kevin Hague to offset his greenhouse gas emissions, we didn’t say yes straight away. We had a bit of a discussion about it. Trying of course to avoid MEGO; “My Eyes Glaze Over”, as we would rather be talking about this winter’s planting plan than carbon trading. After much discussion we had two options.

One option was to say no, we don’t want a bar of “carbon offsetting”.

We were aware that the Tyndall Centre’s Kevin Anderson has said that “offsets are worse than doing nothing.”

Selling our units as “offsets” could imply that we accept that international Kyoto-style emissions trading and offsetting and schemes like the NZETS are sufficient responses to climate change. That clearly isn’t the case. We would agree with James Hansen that the UNFCCC and Kyoto processes have not and will not achieve the magnitude of emissions reductions the science tells us is necessary. We think the NZETS is a joke as it has no cap on the number of units given free to emitters and it allows unlimited use of cheap units from the much larger international carbon market.

The other option was acknowledge the problems with the NZETS, and come up with our own version of offsetting in negotiation with Kevin Hague. And that’s what we did.

Why did we do this? Well, we know that Kevin’s flying is not for a weekend of shopping in Melbourne, but part of the essential price of putting the Green message to the public. We support the Greens as the only party with good policy on climate change.  The fact that the Green MPs offset their flying emissions does have real political value.

This struck home to me back in June this year when I went to a talk about the ‘Rio+20′ conference. Kennedy Graham described the conference’s failure to address climate change as a “double crisis,” an environmental crisis and a crisis of international governance.

Neophyte Minister of the Environment Amy Adams defended business-as-usual and patronised Kennedy saying he was too idealistic. Someone asked Adams if she offset her flying and what she did personally to reduce her emissions. She completely fluffed her answer. Moral victory to Kennedy who we know had offset his air travel to Rio.

What does this offsetting look like?

We cancel, not sell, our AAUs, in return for payment from Kevin. A sale means the unit can be resold many times before being used by an emitter in the NZETS to allow emissions. Cancelling means the unit legally ceases to exist.  It can never be used by an emitter. We could insist on a higher price per tonne of GHGs than the current NZ market price, which has recently been less than the price of a cup of coffee.   With Kevin we settled on $25 per tonne, which was the price discussed when the NZETS was being amended in 2009.

We also let our Golden Bay network know we are getting money for offsetting from Kevin Hague. The Project Rameka team had no problem and immediately came up with new trapping and planting projects for the money. As ever they exceeded expectations. They went out and bought the traps and installed them before any money had changed hands!

So far we have not agreed to provide any offsetting service to anyone but Kevin Hague. We have been asked a few times to offset discretionary personal overseas travel and we have said no. Flying that doesn’t seem that essential doesn’t tick all the boxes the same as our arrangement with Kevin Hague.

Since we started our offsetting arrangement with Kevin, the price of carbon has continued to decline and the NZETS has been made even more ineffective. The Government has permanently excluded agriculture from the NZETS and has extended the two-tonne-for-one-unit discount for emitters. Tim Groser remains welded to the idea of “lowest international cost”.

As far as commercial carbon foresters are concerned, the NZETS has gone pear-shaped because of the price collapse.

Carbon foresters have seen the value of their forests decline by 90%. Pine seedling planting in nurseries has declined by millions and forest clearance for dairy conversions in the North Island looks like starting all over again.

Brian Fallow, the Herald economics editor, describes the NZETS and NZ’s climate change policies as a shambles and a disgrace.

It appears the only people trading forest carbon in New Zealand that are happy at the moment are the Rameka Trustees and Kevin Hague.

We are happy as we are supporting the Greens, getting a realistic carbon price for our units and recycling the proceeds into more carbon-sequestering re-vegetation.

Kevin has said to us that he appreciates being able to go for a bike ride at Rameka where his flying is offset, and he also appreciates that we let him know what his money was spent on. He said to us “It felt real”. If only we could get the rest of New Zealand’s climate change and emissions trading policies just as real in terms of being the right incentive to reduce greenhouse gas emissions.

frog says