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        CARBON CREDITS with particular reference to trees on Maori Land. [Agriculture is a whole new subject, also detrimental to many Maori land owners.]        
               
                 
        At the 8 November 2007 Emissions Trading hui in Hamilton it was acknowledged that there were winners and losers in the proposed Emission Trading Scheme (ETS) within Maori land owners.  The key aspects of the current proposed scheme are that all exotic forests planted before 1990 are in the scheme.  The Government is proposing to allocate 39 carbon credits for each hectare of such forests.  For a forest aged around 28 years, the carbon credit "cost" of not re-planting (ie de-forestation) would be around 870 carbon credits, the future price of which is totally unknown.        
        While there is no proposal currently to "compensate"  indigenous forest owners with an allocation of Carbon Credits, such an option is being explored.  Native bush and scrub with the potential to grow to over 5 metres and covering 30% or more of a given land area in 1990 has been used by the Government as part of New Zealand's "carbon sink".  The Carbon Credit liability for any clearance is with the Government but RMA issues arise for harvesting/clearing native bush.        
        Disclaimer:  For the sake of simplicity, the calculations are based on constant growth from year one to "maturity".  It is also assumed that there is no further growth after the maturity year, which is also obviously not in line with the real situation, however it is sufficient for estimating the impact of the Climate Change policy on land owners.

This whole subject is highly complex and we may have mis-interpreted some aspects of the ETS and other provisions.  If there are any errors or omissions we would welcome feedback.  To email us, click on the hyperlink below.  
       
        feedback@carboncalcs.com          
        KEY ASSUMPTIONS                    
                       
          2007  Start price $   (the Government has used $15 in its analyses but that is under the current market price.)        
                           
          Carbon Credits price growth pa Inflation                      
                 
                     
                 
        Note: All the light coloured cells are user-definable.          
        Assumptions:            - sequestration rate Pine   Scrub   Native          
                 
        Sequestration       tonnes of CO2/ha at maturity          
                 
        Number of years              
                 
        Sequester rate*       tonnes of CO2/ha per year        
             
        * this is an average over time.  Forests under 8 years sequester very little carbon and the sequestration rates differ throughout the rest of the rotation however these assumptions given an "order of magnitude" indication.          
             
        Proposed allocation of Carbon Credits for pre-1990 exotic forest   per hectare        
             
        Suggested allocation of Carbon Credits for pre-1990 native forest   per hectare        
             
        Key dates:   Pre-1990   This applies to exotic and indigenous forest/bush.              
        1990   The reference year for carbon emissions and the carbon sink stock-take.        
          Post 1989   This applies to exotic and indigenous forest/bush planted in 1990 and beyond.            
          2002   This is the reference year for deforestation of pre-1990 forest without penalty.            
          2008   1 January is the beginning of the first commitment period under the Kyoto convention.            
             
                 
        Carbon Credit future price       =   in real terms            
          1990         De- forestation liability $          
        Pre -1990     Year planted tonnes of CO2/ha   Analysis year   tonnes of CO2/ha   Area (hectares)   Allocation $     Per hectare $        
                                 
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                Initial sale year         Proceeds from total annual sales          
                                 
        Post-1989   [Not before 1990]   Carbon credits/yr         Area (hectares)   Initial sale $ *     De- forestation liability $   Per hectare $        
                                 
                         
                           
                           
                           
                           
                           
                           
                           
                               
                           
                       
                         
                   
                   
          Revenue            
            Carbon credit allocation - pre-1990          
                                 
          Initial sale of post-89 Carbon Credits            
                                 
                       
                           
              =   /ha        
                       
                       
                               
          Pre-1990 forests   =   /ha        
                           
                  Post-1989 forests   =   /ha        
                           
            =   /ha        
                     
            =   /ha        
             
                                                           
                                                           
  1   1