GDC investigates selling carbon credits

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GISBORNE District Council will investigate selling some of its carbon credits which have a current total value of $2 million.

The decision came after the finance and audit committee listened to a presentation from Callum Thompson of Graham and Dobson.

The committee adopted recommendations to instruct the chief executive to obtain an assessment of the safe level of carbon stocks within the council’s post 1989 forest estate and investigate options for realisation of pre 1990 carbon credits.

The council has 863 hectares of land and 51,780 NZ emission units credits in pre-1990 forests for which the land cannot be deforested without a significant penalty.

Much of this land is erosion prone and is in the 3A overlay area. It would require replanting anyway, the committee was told.

The council has 429 hectares and 74,000 units in post 1989 forests on which credits must be surrendered if the stored carbon level dropped because of harvesting or an event such as fire.

Mr Thompson said as the landowner the council was responsible for the credits even if the forest was managed by someone else.

He recommended investigating the opportunities to realise value from the pre-1990 credits which had a current market value of $983,820 and have the safe carbon level assessed for the post 1989 ones that had a market value of $1.4 million.

It could consider carbon opportunities as part of the review of the Pamoa Forestry right (where the council has a joint venture with Juken NZ.)

Council land at Waingake

The presentation involved the council land at Waingake and other small forest holdings and did not include the credits held by Gisborne Holdings Ltd at Tauwhareparae, some of which have been sold.

Graeme Thomson said the council had to be careful that it did not cash in on all its credits and future generations had to wear the responsibility for that and did not get any gain out of them.

Rehette Stoltz asked if there was a possibility the emission trading units scheme might be scrapped in the future. Mr Thompson said politically the world was moving to extend this sort of thing.

Pat Seymour said unlike the council, a private landowner could operate differently and sell their credits for profit if they were going to replant.

The value of the credits had gone from $25 about 20 years ago then disappeared down to very little because it was cheap to buy units from other countries. They were now at $19.

Robert Hunter said if the council sold its credits they were committing to replanting in perpetuity. One risk was they did not know what things would be like in 50 years time. The credits could rise to $100, pr a disease could strike and the council could face a huge repayment bill.

Mr Thompson said for pre-1990 forests the council was relatively safe. They did not have to replant in pine trees, they could allow the land to revert or plant something that would stabilise the hills.

Graeme Thomson said this was an opportunity that was too good to ignore. The council should be in a comfortable position as long as it established the safe level for the post 1989 forests. The money could be used in an investment so the capital was there for the future.

Shannon Dowsing said the council had about $1 million of credits it could sell. That was not a huge amount, it was not going to make a great investment.

Rehette Stoltz said she was happy to move the recommendations. The council needed to get all the details, then it could make a decision. ​

GISBORNE District Council will investigate selling some of its carbon credits which have a current total value of $2 million.

The decision came after the finance and audit committee listened to a presentation from Callum Thompson of Graham and Dobson.

The committee adopted recommendations to instruct the chief executive to obtain an assessment of the safe level of carbon stocks within the council’s post 1989 forest estate and investigate options for realisation of pre 1990 carbon credits.

The council has 863 hectares of land and 51,780 NZ emission units credits in pre-1990 forests for which the land cannot be deforested without a significant penalty.

Much of this land is erosion prone and is in the 3A overlay area. It would require replanting anyway, the committee was told.

The council has 429 hectares and 74,000 units in post 1989 forests on which credits must be surrendered if the stored carbon level dropped because of harvesting or an event such as fire.

Mr Thompson said as the landowner the council was responsible for the credits even if the forest was managed by someone else.

He recommended investigating the opportunities to realise value from the pre-1990 credits which had a current market value of $983,820 and have the safe carbon level assessed for the post 1989 ones that had a market value of $1.4 million.

It could consider carbon opportunities as part of the review of the Pamoa Forestry right (where the council has a joint venture with Juken NZ.)

Council land at Waingake

The presentation involved the council land at Waingake and other small forest holdings and did not include the credits held by Gisborne Holdings Ltd at Tauwhareparae, some of which have been sold.

Graeme Thomson said the council had to be careful that it did not cash in on all its credits and future generations had to wear the responsibility for that and did not get any gain out of them.

Rehette Stoltz asked if there was a possibility the emission trading units scheme might be scrapped in the future. Mr Thompson said politically the world was moving to extend this sort of thing.

Pat Seymour said unlike the council, a private landowner could operate differently and sell their credits for profit if they were going to replant.

The value of the credits had gone from $25 about 20 years ago then disappeared down to very little because it was cheap to buy units from other countries. They were now at $19.

Robert Hunter said if the council sold its credits they were committing to replanting in perpetuity. One risk was they did not know what things would be like in 50 years time. The credits could rise to $100, pr a disease could strike and the council could face a huge repayment bill.

Mr Thompson said for pre-1990 forests the council was relatively safe. They did not have to replant in pine trees, they could allow the land to revert or plant something that would stabilise the hills.

Graeme Thomson said this was an opportunity that was too good to ignore. The council should be in a comfortable position as long as it established the safe level for the post 1989 forests. The money could be used in an investment so the capital was there for the future.

Shannon Dowsing said the council had about $1 million of credits it could sell. That was not a huge amount, it was not going to make a great investment.

Rehette Stoltz said she was happy to move the recommendations. The council needed to get all the details, then it could make a decision. ​

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Lorraine Varga - 10 days ago
Selling carbon credits just encourages those who want to buy them to opt out of making the hard decisions in order to reduce their own carbon emissions!

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