I. The Practice of Carbon Farming in New Zealand

In recent years, countries have begun implementing programs employing market-based instruments for delivering ecological services, rather than regulatory instruments. For governments, such policies have the potential for improving the cost-effectiveness of delivering these services, correcting market failures that lead to environmental degradation, and stimulating the development of more efficient strategies for improving environmental quality. In particular, New Zealand has been uniquely innovative with its approach to climate change policy, including a policy component, called the Permanent Forest Sinks Initiative, that is designed to allow private landowners to earn carbon credits by reforesting land. The policy holds promise to support more sustainable land use in New Zealand while delivering a new source of income to rural landowners. However, success depends on ensuring that the practical application of the policy successfully matches the theoretical conditions upon which the policy rests