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Promotion of afforestation in New Zealand’s marginal agricultural lands through payments for environmental services

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  • West, Thales A.P.
  • Monge, Juan J.
  • Dowling, Les J.
  • Wakelin, Steve J.
  • Gibbs, Holly K.

Abstract

Several payments for environmental services (PES) schemes to promote large-scale afforestation are currently operational in New Zealand. In addition, the country has the only national greenhouse gas (GHG) Emissions Trading Scheme centred on forest carbon credits in the world. These market-based instruments are paramount in promoting the changes in land use required to achieve New Zealand’s GHG-emission targets under the Paris Agreement, as well as to pave the way towards the goal of a low-carbon economy by 2050. We estimated the impacts of PES schemes on the profitability of Pinus radiata forestry to identify low-productivity grasslands where afforestation is likely to financially offset the current land use (i.e., mainly sheep-and-beef farming), under the assumption of constant returns to scale. We find that even without PES, 56% of these agricultural lands present lower economic returns than forestry. When PES are considered, results suggest that, depending on the PES schemes and carbon prices, 77–100% of the low-productivity grassland areas could financially benefit from afforestation. If realized, afforestation of those lands could result in the long-term removal of 1.2–1.5 Pg CO2 from the atmosphere.

Suggested Citation

  • West, Thales A.P. & Monge, Juan J. & Dowling, Les J. & Wakelin, Steve J. & Gibbs, Holly K., 2020. "Promotion of afforestation in New Zealand’s marginal agricultural lands through payments for environmental services," Ecosystem Services, Elsevier, vol. 46(C).
    • Handle: RePEc:eee:ecoser:v:46:y:2020:i:c:s2212041620301546
    DOI: 10.1016/j.ecoser.2020.101212
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    References listed on IDEAS

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    1. Ackerschott, Adriana & Kohlhase, Esther & Vollmer, Anita & Hörisch, Jacob & von Wehrden, Henrik, 2023. "Steering of land use in the context of sustainable development: A systematic review of economic instruments," Land Use Policy, Elsevier, vol. 129(C).
    2. Thomas Wilson & Miles Grafton & Matthew Irwin, 2023. "Comparing the Carbon Storage Potential of Naturally Regenerated Tea Trees with Default New Zealand Carbon Look-Up Tables: A Case Study," Agriculture, MDPI, vol. 13(4), pages 1-12, April.
    3. Kaine, Geoff & Edwards, Peter & Polyakov, Maksym & Stahlmann-Brown, Philip, 2023. "Who knew afforestation was such a challenge? Motivations and impediments to afforestation policy in New Zealand," Forest Policy and Economics, Elsevier, vol. 154(C).

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