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Under the New Zealand Emission Trading System (NZETS), post-1989forestry land (the exotic or indigenous forest land that was not used forplantation on 31 December 1989) in New Zealand is eligible for reward foreach tonne of CO2-eqv sequestrated by reverting from pasture to indigenousscrub. We use the Land Use in Rural New Zealand (LURNZ) model to conduct2 simulations assuming that one tonne of CO2-eqv costs $25; The referencecase is that no one has entered the NZETS, the other scenario is thatthe whole agriculture sector and indigenous forest (but not plantation) haveentered the ETS. Each simulation estimates the amount of land use changesin dairy, sheep-beef and scrub from 2008 to 2015. By comparing these simulations,we identify the current use and the area of land that may revertto indigenous scrub. The results suggest that 224,000 more hectares of post-1989 forestry land will be protected into scrub under NZETS than withoutthe system. After applying a land use allocation algorithm, the most likelyreversion may take place on marginal sheep-beef land.
