Lake Taupo Protection Trust
laketaupoprotectiontrust.org.nz
The Lake Taupo Protection Trust exemplifies New Zealand’s pioneering approach to environmental issues. The trust was constituted by the Government, Taupo District Council, Ngati Tuwharetoa and Environment Waikato and Environment Waikato to protect Lake Taupo’s water quality, and, through a number of mechanisms’ it assists land owners to reduce the nitrogen impact of their activities on the lake. Combined with a newly developed regulatory system and nitrogen prediction techniques it provides an active case study on how to reduce diffuse pollution to New Zealand waterways.
Scientists agree that Lake Taupo is under threat from increasing nitrogen leaching from land uses in the lake catchment area. The leakage of nitrogen in the Lake Taupo catchment is primarily due to animal urine from grazing. The Lake Taupo Protection Trust has been tasked with achieving the permanent removal of 20% of manageable Nitrogen from entering Lake Taupo and will accomplish this through land use change to lower nitrogen leaching land uses. At its disposal is a fund of $81.5million over a period of 15 years.
The backdrop to this project has been Environment Waikato introducing new policy and rules to manage land use in the catchment, with most farming practices controlled or requiring consents. There are also tighter controls for new urban development and sewage outfalls in the Lake Taupo catchment.
At a fundamental level, the Lake Taupo Protection Trust can be seen as a vehicle to reduce the inequities that would otherwise occur if landowners were forcibly regulated into changing land use to less nitrogen intensive activities without payment for the resulting reduction in land value and return on investment.
Initially, Environment Waikato evaluates (benchmarks) each property based on detailed farming information for the property over the years 2001 – 2005 and calculates a nitrogen discharge allowance using the ‘Overseer’ computer model. Effectively this discharge becomes a cap on the amount of nitrogen that is consented to be leached from the land.
The Overseer model calculations attribute discharges to various land uses. For example farming can entail discharges of anywhere from approximately 15kg per hectare per annum of nitrogen upwards, whereas a less intensive activity such as forestry is attributed 3kg per hectare per annum of nitrogen.
The benchmark level is taken as the highest nitrogen leaching year from the years 2001 to 2005. Originally the benchmark was to be the average level from the five year period, however at the Environment Court this was changed by agreement to the highest year. This change is advantageous to the landowner who now may have surplus nitrogen to sell or use as their highest year level may be in excess of what they need on an ongoing basis.
A typical transaction with a landowner involves the negotiation of a price for the change in land use and the completion of a deed securing the change in land use for a period of 999 years. While the Lake Taupo Protection Trust can rely on the resource consenting regime to protect its “spend”, bespoke legal instruments including an encumbrance and suspended forestry right have been created and are registered against the titles to the land to ensure that the long term commitment to a reduced nitrogen discharge is entrenched.
CEO of the Trust Graeme Fleming highlights that the fund is not used as compensation but is designed to help complete land change from a higher value land use being pastoral farming to one where nitrogen is restricted. This includes the transfer of pastoral land to forestry, or permanent changes to farming practice through the establishment of Nitrogen Management Plans which determine the annual operation of the farm including maximum stock numbers.
“We rely on creating an attractive business opportunity for farmers or investors while achieving the reduction target within available funds,” he explains. “Of particular benefit has been the ability to look at marginal land conversion to forestry and creating carbon credits under the Emission Trading legislation. This has enabled farmers to achieve returns considerably better than sheep and beef farming on steep or less productive land.”
Other challenges involve completing agreements which reflect the annual fund availability of the Trust and this has involved creating agreements which reduce nitrogen over time. The Trust also has to compete for the purchase of Nitrogen with private parties under the open nitrogen trading system set up by Environment Waikato.
“The reality is that this type of project has not been undertaken before and we are learning as we go,” says Graeme. Despite that we are well ahead of target with approximately 60% of the target reduction achieved so far.”