GISBORNE, New Zealand — Horehore Station, a sheep and cattle ranch, sprawls across 4,000 acres on New Zealand’s North Island, its jagged expanse of uneven hills and steep gullies blanketed in lush green grass.
It is good, productive farmland, despite the rugged landscape. But it soon won’t be a farm anymore.
The land’s owner, John Hindrup, who bought it in 2013 for 1.8 million New Zealand dollars, sold it this year for 13 million, or $8.2 million. His windfall came courtesy of a newly lucrative industry in New Zealand: Forestry investors will cover the property in trees, making money not from their timber, but from the carbon the trees will suck from the atmosphere.
“If you told me this two years ago, I wouldn’t have believed you,” Mr. Hindrup, 67, said of the land’s skyrocketing value.So-called carbon farming has become a key element of New Zealand’s drive to be carbon neutral by 2050. Under a market-based emissions trading program, companies in carbon-intensive industries must buy credits to offset their emissions. Many of those credits are purchased from forest owners, and as the credits’ price has soared, forestry investors have sought to cash in by buying up ranches.
The emissions trading program is New Zealand’s most powerful tool to reduce greenhouse gases. But the loss of ranch land to carbon farming could threaten one of its most iconic industries and change the face of idyllic rural areas. Farmers and agriculture experts have voiced concerns that sheep and cattle ranching, a major employer in many communities and one of the country’s top exporting sectors, is bound for a significant decline.
“We’re talking about a land-use transformation beyond anything that we have seen probably in the last 100 years,” said Keith Woodford, an honorary professor of agriculture and food systems at Lincoln University in New Zealand who is also an industry consultant. “It is a big change in land use, and we just need to be sure that is what we want.”While tiny on a global scale, New Zealand’s emissions were still rising before the pandemic, and it is one of the largest carbon polluters among developed nations on a per-capita basis. The agriculture sector is New Zealand’s largest emitter of greenhouse gases, largely through methane released by animals.
Today’s policy decisions, in response to the long road ahead in addressing climate change, are essentially locking in land use for decades, Mr. Woodford said. Permanent carbon forests must remain planted with trees, and timber forestry that earns carbon credits is required to replant trees after they are harvested — typically at Year 28 — or face a financial penalty.While tiny on a global scale, New Zealand’s emissions were still rising before the pandemic, and it is one of the largest carbon polluters among developed nations on a per-capita basis. The agriculture sector is New Zealand’s largest emitter of greenhouse gases, largely through methane released by animals.
Today’s policy decisions, in response to the long road ahead in addressing climate change, are essentially locking in land use for decades, Mr. Woodford said. Permanent carbon forests must remain planted with trees, and timber forestry that earns carbon credits is required to replant trees after they are harvested — typically at Year 28 — or face a financial penalty.
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