ETS an opportunity for Marlborough

Last Modified: 20-2-2019 14:10

Like it or loathe it, we're living in a post ETS (Emissions Trading Scheme) world. The intent is noble, but the implementation is rather dubious, however it was going to happen one way or the other as both main political parties had plans to implement some form of ETS. Labour spent quite a bit time, money, and carbon emissions flying Ministry of the Environment staff around the country holding climate workshops, and while National did some tweaking, the ETS is law.

For a sparsely populated region like Marlborough where transport costs are a given, at first glance the ETS looks pretty bad for our region, with already low average wages, and fuel usage in primary production, however there is a potential opportunity which could provide big returns for Marlborough.

Forestry is already one of Marlborough's big three industries along with wine and aquaculture. Up until now, most of the region's forestry has been Pinus radiata monoculture. Radiata pine is fast growing and provides a quick return, but it's not the best timber, and quite a lot of places in the world grow it. With the ETS providing a return for trees while they grow, now there is a much greater incentive to plant slower growing but higher value timbers. New Zealand has a natural monopoly on a number of indigenous timber trees which produce exceptional timber, but are slow growing. If there's a return to be had just by leaving these trees in the ground, then it makes much more sense to plant these high value species.

In spite of the incentives, not everyone may want to wait as long as it takes to harvest some of our native trees, and there also the rather short sighted issue with the current ETS that does not differentiate between the uses of felled trees. Timber used to make furniture or houses is a carbon sink, and these uses are actually better than leaving trees to mature, eventually die, and rot in the ground, but presumably it was too complicated for bureacrats to make felling trees for furniture or housing tax exempt. Fortunately, there is a way for forest owners to have their cake and eat it too. A number of exotic hardwoods provide both excellent timber in addition to useful crops. Walnut, chestnut and cork oak produce useful renewable crops without needing to fell the trees. Of course they produce high value timber as well when mature, but it's not necessary to fell the trees to receive a return.

The Marlborough District Council has significant forestry holdings through Marlborough Regional Forestry, which have already received around $3.4 million in carbon credits, a significant win for ratepayers. With some forward thinking, as ratepayer owned forests reach maturity and are harvested, replanting with new high value species Marlborough rate payers could be onto a win-win situation. Perhaps smart wineries, with their ongoing demand for oak barrels may also see the opportunity to invest in their long term future and gain additional return growing their own barrels.

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