The Carbon Calculator provides users with tool to examine the potential viability of “carbon farming”—revenue derived from the storage of carbon that occurs when grazing land reverts to manuka/kanuka scrubland. Under the Kyoto Protocol, and present Government initiatives, it is expected that carbon stored in woody vegetation will have significant value, and once audited will be able to be sold on national or international markets. At present, the calculator is implemented only for hill country the Gisborne/East Cape region. The Calculator estimates both the amount of carbon stored, and it’s value for a given price estimate. Also provided for comparison are typical figures for gross margin returns for the two most common uses for hill country land: sheep/beef farming, and plantation forestry based on Pinus radiata.
The Carbon Calculator is derived from measurements of carbon stored in manuka/kanuka stands of various ages. In general, the stands have established naturally in hill-country areas, following removal of stock from marginal grazing lands. The stands also cover a range of site conditions in terms of fertility and rainfall. A typical sigmoidal-shaped growth curve has been fitted to the set of measurements, and adjusted to reproduce average carbon storage at sites in the Gisborne and Tolaga Bay areas. For manuka/kanuka stands in this area, growth is most rapid from about 7 to 30 years, and by 50 years has slowed very considerably. If suitable seed sources are available, and stock are excluded, an indigenous broadleaved understorey should eventually develop in manuka/kanuka stands, and will finally grow to overtop the kanuka in old stands. This begins the process of full reversion to indigenous forest.
Calculations are based on four inputs:
Estimated carbon price—dollars per tonne carbon dioxide.
Years after establishment—time since reversion began, that is usually time since livestock removal.
Annual rainfall—in mm.
Site fertility—a rating from low to high. Most mudstone (“papa”) hill country in the Gisborne/East Cape region has higher than average natural fertility if there is a history of fertiliser application, although steeper country underlain by harder rocks (argillites) would have only average fertility. Where sandstone occurs, fertility is likely to be medium-low if there is a history of fertiliser application, or low otherwise. A fertility rating of “high” would only be applicable for mudstone-derived soils with continued fertiliser application.
Use the slider bars to enter the Estimated carbon price, Years after establishment, and Annual rainfall. Click on one of the five option buttons to select a Site fertility rating in steps from low to high.
The figures for regionally-averaged gross margin returns (i.e. revenue, less costs, before tax) are taken from two sources:
Sheep/beef farming: data supplied by the Ministry of Agriculture and Forestry’s farm monitoring unit, for the land category “Gisborne large hillcountry”. The 10-year average carrying capacity for this land type is 7.8 stock units per ha, with a 10-year average inflation-adjusted (to 2001/02) gross margin of $16.96 per stock unit after stock revaluations. Further details can be found at http://www.maf.govt.nz.
Exotic forestry: revenue from farm forestry blocks varies greatly with site steepness, access, distance to ports or mill, and stand size. P.F. Olsen Ltd, Gisborne, quote current values in the range of $10 to $16 per tonne stumpage (i.e. net of all costs) as being typical for farm forestry, with about 600 tonnes per ha being a typical harvest figure. This is equivalent to a gross margin in the year of harvest in the range $6000 to $9600 per ha. Assuming a risk-free interest rate of 5.5%, and a 27 year rotation, stumpage in the range $10 to $16 per tonne corresponds to an equivalent annual gross margin return of about $100 to $160 per ha. We take as a typical figure stumpage of $14 per tonne, equivalent to an annual gross margin of about $140 per ha. Neither this calculation, nor the calculation of the gross margin for “carbon farming” of manuka/kanuka scrubland, take account of either the costs of debt-servicing of the capital value of land or inflation. It should be noted that the calculations above are based on current (2004) stumpage values.
Exotic plantation forestry, although having the greatest potential economic returns for Gisborne hill country, involves substantial risk because of the time to harvest, as well as requiring on-going investment for management and the ability to forego cashflow. Manuka/kanuka reversion, by contrast, is lower risk since the time to first cashflow is reduced, and capital costs associated with establishment are low. Nonetheless, exotic forest, particularly if managed, accumulates more carbon than manuka/kanuka scrubland, and so potentially could also be used as the basis of carbon farming. However, if this forest is harvested at any stage, most of the carbon will be considered to no longer be stored, and much of the revenue previously received from carbon farming of exotic forest would have to be repaid. At this stage, there are no data available to calculate the amount of carbon stored in a strictly un-managed exotic forest, although it is likely to exceed that in manuka/kanuka scrubland—but whether by a sufficient amount to cover costs associated with land preparation and planting is currently uncertain.
For further assistance with using this Calculator, for more explanation about it’s design, or to make suggestions for improvement, please contact:
Dr
Craig Trotter
Landcare
Research
Private
Bag 11 052
Palmerston
North
Email: trotterc@landcareresearch.co.nz
Ph: (06) 356 7154
Last revised: 28 April 2004