A pioneering deal involving a farm-to-forestry conversion and the subsequent sale of carbon credits from the forests is being heralded as a major win for the Waikato economy and the environment.
Chairman Peter Buckley said the agreement clearly demonstrated the potential economic benefits available to farmers, foresters and those needing carbon credits under emissions trading legislation while also protecting Lake Taupo’s water quality.
"It’s an inspired arrangement that shows the potential of carbon accounting to deliver much wider environmental benefits in New Zealand – hats off to Mighty River Power, Puketapu 3A Incorporation and the Lake Taupo Protection Trust," he said.
Under the deal, the Lake Taupo Protection Trust – funded by the Government, EW and Taupo District Council – has reached an agreement whereby it will compensate two Ngati Tuwharetoa entities for changing their farming operations. This change will achieve a 22,000 kilograms a year reduction in the amount of nitrogen entering the lake. Nitrogen leaching to the lake decreases water clarity and increases algal growth.
As part of the change, one of the Tuwharetoa entities, Puketapu 3A Incorporation, will convert 500 hectares of its farmland to forestry and sell the carbon credits it gains to electricity generator Mighty River Power under the Emissions Trading Scheme. The involvement of both nitrogen reductions and carbon trading is the first of its kind in New Zealand.
"This is the sort of innovation envisaged when Environment Waikato established its Variation 5 land use policy change to protect Lake Taupo," said Cr Buckley.
"Any ongoing net financial gains to the parties involved will depend on a variety of factors but clearly both the Puketapu 3A Incorporation and Mighty River Power see good prospects from the arrangement.
"For its part, EW will continue to support these types of arrangements and will be watching developments to see what implications they have for the regional economy and the environment," Cr Buckley said.
Lake Taupo Protection Trust’s aim is to cut the amount of nitrogen entering the lake by 153,000 kg a year by 2018.
The 22,000 kg reduction being achieved through the deals with the two Ngati Tuwharetoa entities sees the Trust about a third of the way towards its target.