In October 2017 Shane Jones' distinctive Shakespearean voice could be heard booming throughout the land as he crowed triumphantly about his 1 billion trees in the Billion Trees Planting Programme. Less than three months later, not a single tree has been planted and the government is on track to come up 90% short of their target of doubling the rate of planting over 10 years.
The issue isn't so much that there isn't enough land available for Forestry Minister Shane Jones to plant these trees on. Rather it's that neither New Zealand First or Labour bothered to ask the public service during the coalition negotiation process whether it was in fact possible.
The "Billion Trees Planting Programme" has been a bit of a disaster right from the get go. The ambiguously worded coalition agreement between Labour and NZ First had everyone thinking that 100 million new trees would be planted each year by the government. Within days, and after realising they'd massively over promised what they were going to do, the government had to walk back the 1 billion trees figure. They hastily tried to explain that what they really meant all along was that they wanted to double the rate of existing planting across both the forestry and conversation sectors. It was now going to be 500 million additional trees on top of the 500 million trees those sectors were already expected to plant over the next decade.
That was still a big, ambitious goal, but it was half of what the coalition agreement had led everyone to believe was going to happen.
Now it looks like the government is going to struggle to even make 10% of that revised target over that decade. It's hardly surprising, with the government believed to have costed the programme at $2 billion over the 10 years, the economic of it look a little tight.
With the Billion Trees Planting Programme expected to need an additional 500,000 hectares, and forestry land selling in December 2017 for an average of $7,713 per hectare, the value of the land alone for those 500 million trees is around $3.8 billion, well over double the $2 billion figure being floated around. That's also before we take a conservative 2005 figure of each hectare of forestry planted in radiata pine costing around $1500 by its first prune - we're looking at a total cost of $4.6 billion.
Thankfully, the reality is that the government isn't likely to have to shell out $4.6 billion. Instead they're more likely to try and subsidise existing land owners, whether it's forest owners, farmers, DOC, or Iwi. Taking that figure of $1500 per hectare of radiata pine, with the $2 billion the government could effectively offer a subsidy of around $4 per tree, effectively meeting half of the value of the land - providing it's only land suitable for forestry that we're talking about.
That all starts to fall apart if there's not enough spare forestry land available. More broadly around the primary sector, the average land sell price per hectare was $29,000. At a shade under four times the price of forestry land, the cost of the Billion Trees Planting Programme is going to rapidly spiral out of control or, much more likely, the Billion Trees Planting Programme is going to fall flat on its face with landowners unwilling to convert more productive land to tree plantings given the increasing opportunity cost involved. I also doubt the inclusion of agriculture into the ETS will be enough to mitigate this.