Abstract:

Investing in projects that support environmental benefits, such as tree harvesting, has the potential to reduce air pollution levels in the atmosphere in the future. However, this kind of investment may increase the current level of emissions. Therefore, it is necessary to estimate how much the policy affects the current level of CO₂ emissions. This makes sure the policy doesn’t increase the level of CO₂ emissions. This study aims to analyze the effect of the One Billion Trees program on CO₂ emissions in New Zealand by employing the 2020 input–output table analysis. This investigation examines the direct and indirect effects of policy on both the demand and supply sides across six regions of New Zealand. The results of this study for the first year of plantation suggest that the policy increases the level of CO₂ emissions in all regions, especially in the Waikato region. The direct and indirect impact of the policy leads to 64 kt of CO₂ emissions on the demand side and 270 kt of CO₂ emissions on the supply side. These lead to 0.19 and 0.74% of total CO₂ emissions being attributed to investment shocks. Continuing the policy is recommended, as it has a low effect on CO₂ emissions. However, it is crucial to prioritize the use of low-carbon machinery that uses fossil fuels during the plantation process.

Key words: Regional input–output analysis, Forest investment program, Sectoral CO₂ emissions, Environmental policies, Supply-side policy, Demand-side policy