Climate of change: Big business sets up decarbonisation funds

Sunday, 17 March 2019

Radiata pine seedlings waiting to be planted to sequester carbon from the environment.

Big corporates are lining up to prove their carbon credentials, responding to a huge shift in public, and political opinion.

The Warehouse has gone carbon neutral by buying carbon credits and planting native trees to 'offset' the carbon it emits selling us stuff.

Air New Zealand has signed up to the Dryland Carbon partnership with Genesis Energy, Contact Energy and Z Energy to plant mainly 'exotic' trees like radiata pine to offset emissions.

And SkyCity and NZ Post have both set up carbon action funds to research ways of cutting their carbon footprints.

* The Warehouse says it's now carbon neutral

Anthony Beverley, chief executive of Dryland Carbon, said radiata pine was very effective for sequestering carbon.

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TIPPING POINT PASSED

Anthony Beverley, chief executive of Dryland Carbon, came up with the idea in 2011, but it was only in the past 18 months, that the idea was welcomed.

'Since 18 months ago, it was pretty clear New Zealand had a different way of doing things,' he said.

'There was a general recognition this is serious, and we really need to hold hands on it.'

Government sends out strong messages to corporates, and companies who want to stay in favour in Wellington, need to listen.

Native bush is where native fauna thrive.

And there's a chain reaction. When a business like the Warehouse goes carbon neutral, it sends a message to its suppliers, said David Walsh, chief executive of New Zealand Post, which is a major supplier of services to the retailer's growing e-commerce business.

But the change of climate on carbon isn't just the result of a Labour/Green government, Beverley said.

In 2015, the banning of cheap carbon credits pushed the carbon price up in New Zealand turning it from a minor inconvenience to a major cost.

The price of carbon went from the sub-$5 a unit 'no price', said Beverley, to around $25.

Suddenly Dryland Carbon was economically viable, and with predictions for the future carbon price in New Zealand being anywhere from $52 to $200, companies now have some significant future risk to manage.

CONSENSUS REACHED

Genesis chief executive Marc England said employees favoured companies which were working towards decarbonising.

Figures from UMR Research show 2018 was the year in which, for the first time, more New Zealanders were convinced that man-made climate change was backed by scientific consensus, than there were people who still thought there was a scientific debate about it.

Genesis Energy chief executive Marc England said stakeholders including employees, Iwi and investment funds, including the NZ Super Fund, were all advocating for action from corporates.

CASE FOR OFFSETTING

England said the company had halved its carbon footprint in the past decade, but that offsetting was part of tackling climate change.

David Walsh, chief executive of New Zealand Post said the state-owned group had set a target to be zero carbon by 2030.

'It's got to be a bit of everything. You have got to reduce the output, and you have got to increase the absorption.'

The Potsdam Institute for Climate Change says offsetting global carbon emissions is no viable option to counteract emissions from fossil fuel burning because the plantations would need to be so large, they would eliminate most natural ecosystems or reduce food production.

But within the tree-planting offsetting there are the two competing strategies of planting native trees, being used by the Warehouse, and planting exotics.

'Exotics sequester a whole lot of carbon massively more than indigenous forests,' said Beverley. 'That's a fact of life.'

But though radiata pine forests are no longer be seen as unfriendly to all of New Zealand's native birds, neither have they the reputation as supporting much biodiversity.

SkyCity's environment manager Courtney Simpson said by putting a price on carbon, the company was putting a 'hard cost' on emissions of $25 per tonne of carbon.

And, Beverley said, government agencies were concerned fertile land would be planted out with forests.

But he said Dryland Carbon was targeting marginal land, so agriculture should not be displaced.

DECARBONISATION FUNDS

Walsh said NZ Post had opted not to offset, describing offsetting as a 'soft answer'.

'We know if we did a carbon offset, it would be $1.5 million a year,' he said.

That money was being used to create a decarbonisation fund to research ways NZ Post could cut its emissions. Already, it is investing in testing electric courier vans.

SkyCity, which operates casinos in Auckland, Hamilton, Queenstown and Australia, was doing something similar, charging itself a $25 'levy' for every tonne of carbon it is responsible for its decarbonisation fund.

It aims to be carbon neutral in New Zealand by the end of the year, with its Australian operations following next year.

The company also set up a scheme which staff can use to buy carbon credits to offset their own carbon footprints.

Chairman Rob Campbell and chief executive Graeme Stephens have gone carbon neutral.

SkyCity's environment manager Courtney Simpson said by putting a price on carbon, the company was putting a 'hard cost' on emissions of $25 per tonne of carbon.

Stephens said: 'The fund enables us to proactively allocate capital to projects that will meaningfully reduce our emissions over time, whether that be new technology, LED lighting or upgrading particular facilities.'