Forests, Carbon and Climate Change

Financial accounting is a useful metaphor for carbon accounting. In both accounting systems there are inputs (e.g., revenue/carbon sequestration), and outputs (e.g., expenditures/carbon emissions).

For financial accounting, an organisation with high turnover (incoming money) may still not have a growing bank balance because they may not have enough surpluses to put into a savings account.

When revenue (incoming) is higher than expenditure (outgoing) the organisation’s surplus increases, and they can sequester this into a term deposit. Conversely, when revenue is less than expenditure, the organisation will have no surplus to put into a term deposit and the bank balance will continue to get smaller. The world is currently heading towards insolvency from a carbon accounting perspective because our emissions are greater than our removals leading to a steady increase of CO2 in the atmosphere. This is changing the climate in ways that are incompatible with growing enough food to feed 9.7 billion people by 2050.

The bank balance is the sum of financial transactions into and out of an organisation. Similarly, the carbon balance is the sum of CO2 movement into a living system through photosynthesis (CO2 capture), and out of the living system through respiration/decomposition (CO2 emissions).

The carbon stored in a tree as wood is only stored there for the life of the tree. This is why carbon accounting is about forests (a population of trees) and not trees as individuals.

When a grassland is forested, the land use has changed from a population of grass to a population of trees. The population of trees will store a higher volume of carbon per hectare than the population of grass for the same hectare. During the period when the forest is growing it is sequestering carbon into wood. This is why carbon credits can be issued to projects that grow new forest, but only for a limited period as the forest grows. The carbon credits represent the additional carbon added to the ecosystem as its biomass increases. When the forest is mature the carbon volume stored will reach a volume limit and stay the same and the ability to issue carbon credits will stop.

Plantation forests that are clear-cut harvested will grow their store of carbon while the forest grows and then release most of that carbon to the air during the 100-year period after the forest is harvested. But if the new plantation forest is always replanted after harvesting it can remain as a living system for hundreds of years (or longer). Here, the average carbon volume stored in the plantation forest land use is still higher than what is stored in the preceding grassland. This is why carbon credits are only issued during the first half of the first rotation in a new plantation forest destined for a clear-cut harvesting and replanting cycle. After that point the carbon gain will be counter-balanced by the carbon lost through harvesting. 

When a mature intact native forest is logged the carbon stored in the forest is released to the air. If the same forest is allowed to regrow to maturity it will eventually recover the carbon volume that was lost – similar to a plantation harvest rotation but typically over a much longer timeframe (e.g., hundreds of years). However, mature intact native forests are often harvested and remain degraded or eventually converted to non-forest land uses. This represents a permanent transfer of carbon to the air. This is a common problem in developing countries where deforestation and forest degradation is a major problem.

Projects that convert productive native forests into permanently protected forests, therefore, deliver carbon benefits by preventing emissions from deforestation and forest degradation in countries where native forest logging occurs. This kind of forest carbon project is helping to protect rainforests in many developing countries including the Pacific Islands. Such projects can help indigenous peoples and local communities reap the benefits of economic development without degrading their ecosystems. This is because they can sell carbon credits instead of wood and where the carbon credits represent the avoided emissions from avoided deforestation or forest degradation.

As can be seen, the forest carbon accounting story is a complex one, but no more complex than many land management challenges. The invitation to all of us interested in preventing dangerous climate change, is to look at how we can help grow new forests and protect existing ones. Here at Ekos this is a daily task for our team and something that we are very proud to be involved with. We are also grateful that for the first time in history there is a financing instrument capable of supporting forest conservation and restoration at scale – this instrument being carbon credits and carbon markets. As forest conservationists, this is why we got involved in the carbon markets in the first place.

Chatting with Ekos: A Peek into Hello Periods Sustainability Journey

Ekos have had the pleasure of working with Hello Period through carbon mesaurement and certification. Hello Period is a New Zealand built and owned sustainable period products organisation. Ekos have interviewed Kat Sprowell, Chief Operating Officer at Hello Period. Read on to learn about Hello Periods sustainability journey!

What motivated you to begin working with Ekos and what do you aim to achieve? 

We design, make and sell high quality, award-winning reusable period care products and are proud to be the world’s only one-stop shop offering a reliable, leak-free option for every person with a period, no matter whether they prefer internal or external products. Our products replace single use period products such as tampons and pads.  

Sustainability is at the heart of Hello Period so working with Ekos was a no-brainer for us. We wanted to ensure we were accurately measuring our carbon footprint, and also come up with ways to reduce and offset any impact as our business grows.   

We believe we’re all in this together in order to bring about the change that is needed, and we want to do our part. 

What have you learnt from working with Ekos on carbon management? Have you seen any benefits? Were there any challenges and how did you overcome them? 

We have learnt about the data collection process, how the information gathered gets analysed and the different areas that potentially have impact that you need to consider.  

Knowledge is power and going through this process with the Ekos team makes us even more mindful of the impact our business is having which has been a huge benefit. Because our impact is front-of-mind, we are always actively looking at where and how we can make improvements - no matter how small.  It has also been a really valuable catalyst for looking closely at every part of our supply chain and actively starting conversations with our suppliers about how we can reduce our collective impact - so putting it on their radar too.  

The main challenge has probably been finding the time to really dedicate to this work. We’re a small team and when you’re constantly in the hustle of keeping a business growing and ticking over, it’s not always easy to find the time. Having the Ekos team working alongside us to advise and keep us on track is very helpful and motivating. 

What sustainability initiatives are you currently engaged in? and how will these impact your business for a sustainable future? 

Sustainability is at the very core of what we do - every menstrual cup or disc sold diverts over 2000 single-use products from landfill. To date, Hello Period has diverted more than 500 million single-use period products from landfill and waterways around the world, and we are super proud of that. In addition, we have a number of sustainability initiatives on the go that all contribute to reducing our impact on the planet over time, this includes a recycling programme for our cups, compostable product packaging and a commitment to reducing emissions generated through upstream freight. 

What changes have made the biggest impact?  

In terms of changes within the business that have had impact, we are working hard to reduce our reliance on air freight and send/receive shipments via sea whenever possible. It’s much easier said than done but we are really committed to this as it is an area where we can make significant headway in terms of reducing our carbon footprint. We manufacture as much as we can locally as well.  Also these days we are a fully remote working team and we are able to reduce our environmental impact this way too, including no staff commuting to and from the office! 

What might a climate positive business look like?  

For us it looks like a combination of things - looking for new ways of doing things that will  

eliminate or reduce emissions, reducing waste wherever possible, and then offsetting any residual footprint. As a Climate Positive business, we commit to offsetting at least 120% of our measured emissions each year, and also give ourselves specific challenges in terms of targets we want to achieve or new initiatives we want to bring to life. 

What areas have you looked at to make your GHG emissions report more complete? Have you learnt about bettering your data collection? 

The key has been to keep in mind throughout the year that we need to be able to easily access this data and ensure we are capturing everything that is relevant. Our two main emission sources are freight and business travel and so ensuring really good record keeping as we go is important to ensure high quality data. 

What does your company's sustainability look like by 2030?  

Our mission is to divert one billion single-use period products from landfill and waterways around the world by 2030 and we are already over halfway to achieving that target. In addition to that, we think our sustainability journey by the year 2030 looks like embracing new materials and technologies that enable us to reduce our carbon footprint. We have also set ourselves the challenge to reduce our GHG emissions by at least 20% by 2030. 

How do you communicate your actions and certification? 

We communicate this in a number of ways - on our website, we proudly display the Ekos Climate Positive symbol on our product packaging, shareholder updates throughout the year and our annual impact report. 

What are the links between your sustainability and social goals? 

Our vision is to make periods better for people, and the planet. Our sustainability and social goals are inextricably linked. Hello Period was founded on the core values of kindness, inclusivity and respect for the planet and that has always been what drives us. We have a giving programme called Hello Kindness and each year we donate hundreds of products, we partner with The Period Place to improve accessibility for all and we love getting involved with education initiatives. We are also currently supporting a Massey University research project being led by Dr Claire Badenhorst; a ground-breaking study that is looking at whether menstrual blood can be used as a health marker - it’s a world-first study and we are so thrilled to be part of it. 

Hello Period’s CEO & Co-Founder, Robyn McLean.

Southern Kauri Forest Project

Kauri Trees Ltd has started the transformation of 20 ha of pasture on its 28 ha property, planting 7,300 native nurse trees[1] over one third of the pasture in August 2023. A mix of 21 different varieties of indigenous nurse trees will provide weather protection to the Kauri and create light competition to draw them upwards rather than outwards as they grow. The nurse trees were grown in Dunedin by Ribbonwood Nurseries from seeds collected locally. The varieties are consistent with the flora in the existing gullies on the property. “By planting a diverse range of nurse trees, we will mitigate weather events, such as a heavy frost or a dry summer” said Kauri Trees owner Peter Parsons. “The diversity will also create a more natural ecosystem, attracting more native fauna to the forest” he continued.   

Planning started in the lead-up to finalising the purchase of the property in May 2022. “It’s wonderful to move from the planning stage to implementation” stated Peter. Although -46 degrees latitude is much further south than where Kauri typically grow, scientists at Scion advised that with the right preparation, the Kauri trees should grow with minimal losses. The climate will also likely warm in Otago over their 1,000+ year lifetime gradually making them feel more at home. Over the past summer, Kauri Trees sourced 34,000 seeds from three separate locations in Northland, Coromandel and Tauranga. The seedlings are currently being propagated at Ribbonwood Nursery, in preparation for planting from May 2025. “We hope to get around 25,000 stems and will be planting 20,000 Kauri over three planting periods. Based on tree count, we believe this will make it the largest planted Kauri forest in New Zealand” according to Parsons. 

[1] A nurse tree is a tree that can provide enhanced survival to smaller plants by providing it with protection from the sun, wind, and other sources of mortality.

Native nurse trees planted at the site.

Growing trees as a permanent protected forest rather than for harvesting requires a different approach to planting. “We didn’t want regular rows and columns of trees, so we engaged local company Habitat Restorations Aotearoa, who specialises in conservation planting, to undertake contour planting of the rolling land” said Peter. The pasture has been separated into three areas using the existing fence lines. Planting will be undertaken in August and May each year, finally being completed in May 2026. Spreading planting over time reduces the risk of tree loss due to adverse weather and provides the necessary time for both the nurse trees and the Kauri to grow. As the Kauri grow, they will crowd out most of the nurse trees and dominate the forest. 

“We are going to record the GPS location of each Kauri tree and fit a radio frequency identification (RFID) tag to each so we can capture individual tree growth data” Peter told us. This will provide researchers with a unique data set and show any tree growth differences between the seed sources. “Any tree growth performance differences are less useful if we don’t have clear seed provenance, so fitting an RFID tag to each tree will result in more reliable records that might support useful future scientific publications”. With a better understanding of both the process and the results of this project, other landowners may decide to follow Kauri Tree’s lead with their own Kauri plantations. More information is available from the website www.kauritrees.nz.

Ekos is assisting Kauri Trees Ltd with the registration of this project into the New Zealand Emissions Trading Scheme. We applaud the work Peter is doing, his passion for the environment and innovative approach to creating this project.

Images credit: Peter Parsons

The Abatement Tree

The backbone economic logic underlying emissions trading is called the ‘marginal cost of abatement’. ‘Abatement’ here refers to reducing GHG pollution. The ‘marginal cost’ is the cost of the next piece of abatement that you do in a carbon reduction exercise. One way to conceptualise the marginal cost of abatement is to use fruit harvesting as an analogy.

An apple tree is covered with apples. But the cost to harvest the apples changes as you harvest them. After you walk around picking the low fruit, the low fruit are now all gone. You then need to jump to harvest the next layer up the tree, which requires more effort per apple. Then after those have all been harvested you need to use a ladder. Through time the harvesting effort per apple goes up a lot to the point where getting those last few apples takes a lot of effort (and cost) per apple.

The same happens with emissions reduction (abatement). One thing we discover when we measure our carbon footprint is that our abatement opportunities fall into different cost categories. Some are below zero (they save you money when you do them – such as reducing flights). Some are above zero but below the carbon price per tonne of CO2 abated (such as insulating a house). Others are both above zero and above the carbon price per tonne of CO2 abated. These are the low, medium, and high fruit on the ‘abatement tree’.

It is also worth noting that harvesting (abating) the highest fruit can be either a) prohibitively expensive – where harvesting this fruit would require the organisation to go bankrupt, or b) may be impossible at this stage on existing technology? For example, it is not possible to remove the embedded GHG emissions from the concrete manufacturing process for the concrete in your building. Or, for example, whilst reducing emissions by maximising efficiency within your fleet, it may not be achievable to convert your fleet to fully electric in the short term. Another example: it may not be possible or feasible at this stage to use a refrigerant that is not a greenhouse gas in your fruit processing plant.

Combatting climate change means getting the biggest beneficial bang for buck (the four ‘b’s) for every dollar invested in abatement. This means starting with harvesting all the low and medium fruit on the abatement tree across the entire economy. Ideally, climate policy and emissions trading are designed to do exactly that – harvest all the low and medium fruit and some of the high fruit. Unfortunately, the New Zealand Emissions Trading Scheme is not designed for this, but the voluntary carbon market is. Going Net Zero Carbon for example, is a voluntary action and falls under the voluntary carbon market.

When it comes to the cost of harvesting the highest fruit, however, a cost-benefit analysis would likely show that the four ‘b’s are not delivered by harvesting those highest fruit. The four ‘b’s are delivered when we stop harvesting high-cost abatement on our tree and instead pay to cause a higher volume of lower cost abatement on someone else’s tree. This is what carbon offsetting is.

The catch here is that someone else (i.e., the carbon offset project) needs to demonstrate that they could not deliver that abatement without the financial incentive in the form of the revenue from selling the carbon credits. This is called ‘additionality'. A good example is converting marginal farmland into permanent restorative forest cover. Here, the farmer cannot afford to turn off the revenue tap from that farmland (otherwise they will go bankrupt) and so they keep farming. But a forest carbon project allows the farmer to convert from one revenue stream (agricultural produce) to another revenue stream (carbon credits from permanent forest). 

The goal is to combat climate change by doing as much abatement as we can and getting the biggest volume of abatement delivered by the limited funds available. We measure and reduce, and what we cannot reduce ourselves we either stop (still a good thing to do), or we decide to go the extra distance and take responsibility for the emissions that were too expensive or impossible to eliminate (an even better thing to do). Taking responsibility for these emissions involves carbon offsetting and, in the process, causing additional good to our planet – helping to recloak our whenua. When we choose a restorative forest carbon project to support (like any project supported by Ekos) then we will also contribute to biodiversity conservation, water quality, and climate resilience.