Land use change can’t stay in the “too-hard basket”, new report says – Expert Reaction

“The PCE report Going with the grain focuses on the challenges that NZ faces with respect to land use change: it’s happening already, climate change will accelerate it, current policy settings will likely lead to perverse outcomes, and we will need properly joined-up solutions to deliver optimal long-term outcomes. None of this is controversial but it does make clear the case for changing the way we think about how these solutions will be developed and implemented. If it is to be, as the PCE suggests, “catchment groups” that should have the appropriate scope and mandate to co-develop catchment-scale plans, then they will be rather different from the “catchment groups” we know today. While the deliberately local focus remains, the new catchment groups will sit between national and regional policy frameworks and the private property rights of local landholders. As the PCE notes, farm boundaries are frequently unhelpful with respect to dealing with environmental issues: externalities do not respect fences. To be effective, these new catchment groups will need:

• To represent the interests of the all the stakeholders in the catchment (especially mana whenua, and including urban communities)
• To be appropriately empowered and resourced over the long term
• To be supported by rural professionals
• To be supported by scientists who act as ‘knowledge brokers’ to connect with data and expertise as required. They can also identify knowledge gaps where science input can be directed

“The PCE report does not develop a vision of what catchments should look like and what changes farmers might be required to make. Each catchment will need to determine that for themselves. But it does make clear the imperative to do something properly joined-up, and to do it now!”

No conflicts of interest.

“Going with the grain, the just released report from PCE, sets out the complex challenges that NZ must navigate in attempting to address the multiple environmental problems facing rural NZ. Land use change will continue, driven by multiple factors, including the need to prevent further degradation and in response to a changing climate. The report acknowledges that land use change will inevitably involve difficult decisions and trade-offs between environmental, economic and social priorities.

“One recurring theme through the report is the need for data: it notes central government must enable farmers and regulators to have access to inexpensive, high-quality environmental information and underwrite it as a public good. Data behind a pay wall is not helpful.

“One source of data that has recently become available is the Data Supermarket. The Whitiwhiti Ora (Land Use Suitability) programme in the Our Land and Water National Science Challenge has developed the Data Supermarket to make new high-quality data available for land managers and their rural professionals. The datasets are intended for use by those providing advice on land-use change options in New Zealand. Guidance documents, such as for tree species selection and ETS look-up tables, are suitable to support on-farm decisions. The datasets in the Data Supermarket contain a wide range of datasets with information on suitability, yield maps, climate change impacts and economic information.”

Conflict of interest statement: The Data Supermarket is the product of research that my colleagues and I worked on for the Our Land and Water National Science Challenge.

“The report by the PCE on land use change is timely and effectively challenges prevalent myths in the agribusiness sector. The inclusion of Māori perspectives and principles throughout the report, particularly the integration of Te Ao Māori and Te Ao Pākehā perspectives on resource management, is a highlight. This approach provides a unique Aotearoa perspective and underscores the importance of Māori rights and interests.

“The report emphasises the role of international consumer expectations in driving environmental change, a crucial point that has significant implications for Aotearoa’s agribusiness sector that relies heavily on exported goods.

“An integrated approach to environmental management is essential to address the challenges of improving freshwater quality, mitigating climate change impacts and alleviating biodiversity decline. The report provides useful case studies that promote local catchment management groups as an essential component for addressing these issues. The recommendation to include mana whenua alongside the community as key stakeholders in these groups is crucial, emphasising the role of
mana whenua as Te Tiriti partners.

“While market-based mechanisms maybe less appealing to some, the report’s treatment of Māori rights within these mechanisms is commendable. The commitment to using proceeds from these mechanisms for habitat restoration on marginal land is sensible and should be explicitly stated to ensure transparency in resource allocation.

“Overall, the report successfully balances various perspectives, integrates Māori principles, and addresses critical environmental and agribusiness issues, making it a valuable and comprehensive document.”

Conflict of interest statement: Dr Awatere was a reviewer for the report.

“Major, non-marginal change to productive land use in Aotearoa New Zealand is crucial for long-term sustainability. As the latest report from the PCE makes clear: “the way we use the land needs to change.” The report provides valuable insight into the opportunity to realise economically, socially and culturally, and environmentally sustainable outcomes, and the scale and scope of the challenge. Land use decisions occurs within a dynamic decision context. First, climate variability and extremes, including higher temperatures, increased evapotranspiration, and more frequent and severe catastrophic weather events, will require farmers, foresters, and growers to adapt to maintain productive, functional systems. Second, not only must primary industries adapt to changing climatic conditions, but there is also a need to respond to changing regulatory settings, market risk, financial shocks, and input scarcity, all while maintaining a social licence to operate and public support. Many of these changes are incremental, however this may be insufficient and more transformational options—including land use change—may be needed. This complexity and uncertainty presents significant challenges – not only for planning and policy making, which is often fragmented between local, regional and central government, but for individual land owners and managers.

“Results from modelled scenarios from the Mataura catchment in Murihiku Southland and the Wairoa catchment in Te Tai Tokerau Northland, for example, which supplement the main report, highlight the potential benefits of changes in land use, but also make clear these are characterised by trade-offs elsewhere, including productivity, profitability and investment requirements. Furthermore, land use decisions must account for the social contexts that inform farmer decisions, and the structural factors – including environmental conditions, such as soil type – that may enable or constrain land use change.

“Land use change decisions require: knowledge of options and their implications, values to assess the options, and rules that enable implementation. Developing insight into the decision context can help identify opportunities to shift structural factors that influence individual and collective decision-making processes, options, and choices. By drawing attention to the diverse values that influence land use change decisions, and the associated opportunities, limits and trade-offs, this work this report makes a valuable contribution to the discussions and debates about the future(s) we want in Aotearoa New Zealand, recognising that land use is complex, multidimensional, and that change will not be strictly linear.“

No conflicts of interest.

“The report aptly details the multi-faceted problems and barriers to implementing successful land-use policy for the enhancement of our environment. The suggestion for locally empowerment in involvement and management of these challenges is valuable, especially for managing ‘hotspots’ of environmentally at-risk land.

“The call for funding for publicly available data on land-use and land-use systems is vitally important as data access and continuity is an ongoing challenge to the success of New Zealand science.

“The report rightly urges caution in the dependence on carbon forestry without considering the downsides of loss of option value on our productive landscapes and increasing fire-risk under climate change. Current incentive structures would promote large transitions from sheep and beef farms especially with carbon pricing such as the levies proposed in He Waka Eke Noa went ahead. The consequences for a large transition of land into forestry have not been well considered nationally.

“The suggestion, however, that permanent carbon forests should be removed from the ETS on the basis that they may not be permanent (due to the potential for poor management, fire risk, etc.), may be extreme. Reducing emissions is certainly more valuable than sequestering due to the cited risks, and there is a further downside of off-sets in allowing polluters to not reduce their emissions.

“However, removing one of New Zealand’s only emission reduction options, while policies like He Waka Eke Noa are delayed potentially indefinitely seems counterproductive. Offering no incentives for planting trees outside of production forestry.

“The report rightly highlights that the incentive for increasing the environmental performance of our agriculture may come from our consumers abroad, but not the potential for environmental and sustainable production to be rewarded by consumer purchasing behaviour, thus adding value to our exports and covering some of the costs of mitigation for producers.”

Conflict of interest statement: “No conflicts of Interest. Is a current member of the A2 Farm Sustainability Fund Investment Committee”

“As a Finance academic with a strong interest and expertise in Sustainable Finance and particularly in Emissions Trading Schemes, I will focus on this aspect of the report and the release:

• ‘The costs of a successful transition would be lower if we removed barriers that are impeding progress, such as, progressively removing forestry from the NZ ETS and creating a separate mechanism (or emissions trading scheme) to manage biogenic methane emissions.‘

“Overall, this is a welcome recommendation as the glut New Zealand Units (NZUs) in the Emissions Trading Scheme have subdued the effectiveness of the scheme to be effective. One of the major sources of this supply is the credits awarded for forestry sequestration, which has predominantly been through exotic pinus radiata forests, which come with a host of risks and negative side effects. There is an argument for maintaining native forest regeneration in the ETS, as this is much more costly, so it can not so easily replace emission abatement and comes with risk reductions and positive side effects. It is really interesting to note in the case study report that if you price emissions for agriculture, but don’t phase out forestry from the ETS you just end up with a lot of land converted to pine forestry, a trend that is already underway and will only be exacerbated if agricultural emissions are priced and forestry sequestration is not restricted.

“Out of the modelled Scenarios, number 5 seems to be the most favourable for environmental outcomes. I would suggest having a single price for emissions (by converting methane to CO2e) rather than managing multiple market mechanisms, as even managing one has proven politically challenging.

“Emissions from agriculture have not been priced in the 15 years that the ETS has been around and the planned inclusion of these emissions into the ETS or a separate pricing mechanism has been delayed many times. I believe agricultural emissions should be priced in the ETS, by using global warming potential factors to calculate the CO2 equivalent warming potential of methane emissions, while initiatives such as regenerative agriculture and new technologies could be rewarded and supported by some of the revenues raised. As per one of the modelling scenarios, this revenue can also be used to fund research and technology initiatives to reduce emissions from agriculture. The reason I would incorporate the net emission effect of those activities for farms initially is because their emissions effects are hard to measure, but they are extremely important, so should be rewarded and supported. If we implement a split gas scheme with different prices for the same warming potential we will create arbitrage opportunities and other perverse unexpected outcomes. Arbitrage opportunities are created when there are different prices on the same commodity in two markets, so we can sell in the higher price market and buy in the lower price market, generating a profit without risk.

“An example of other perverse outcomes is a farmer who has to pay a methane levy could offset the cost of that by planting pine trees on part of their land and receiving NZUs, but because NZUs price is higher than the methane levy CO2 equivalent price, they would be able to sell these credits and offset the cost by planting less trees than would offset the actual emissions.

“I am happy to provide more detailed comments on aspects of this report that I have expertise in, but hope these initial comments may start an interesting conversation/article.

“Some notes on the scenarios:

“A split gas system where methane is priced at $0.11 per kg is equivalent to a $4.40 NZU price and in a high price scenario a $1.06 per kg methane is equivalent to a $42.4 NZU price. Both of these are lower than current NZU prices and would create interesting economic incentives which could be counterproductive. Hence bringing these gasses into the ETS and fixing some of the issues (forestry and industrial allocation) in the ETS would make much more sense. The 2060 projected price of $3.19 and $7.97 could be converted to CO2e price of 127.6 and $318.8 in the low and high levy respectively. Why have two prices for emissions?

“Lastly, I would say the overall message of an integrated approach to the policy/subsidy/pricing mixis a great suggestion, as the whole policy mix is important and policies can provide synergies or actually detract from each other, as seems to be currently happening.”

No conflicts of interest.