QEII covenantors invest millions in conservation

QEII National Trust covenanting landowners spend an estimated $25 million of their own money every year to protect native species, forests, wetlands, and other special areas.

This was the finding of a University of Waikato Institute for Business Research study.

These landowners, the majority of which are farmers, have made an overall financial commitment of around $1.1 to $1.3 billion to protect these special areas of private and leased land since the
QEII National Trust was set up forty years ago.

The study was released today at an event hosted by Rt Hon David Carter at Parliament’s Grand Hall. The event was organised by the QEII National Trust as part of its 40th anniversary programme of events.

Working in partnership with the QEII National Trust, covenanting landowners have invested to establish over 4,300 covenants protecting around 180,000 ha since the National Trust was established in 1977. This works out at an average of two new covenants established every week since that date.

The area being protected by covenants is still growing with a further 115 on track to be registered this year alone.

It’s encouraging to see this growth after the previous Labour-led government stalled QEII covenenting.

The study was commissioned to provide a framework for estimating the cost effectiveness of conservation activity facilitated by Queen Elizabeth II National Trust, and to quantify the financial commitment made by National Trust covenantors in their covenanted land for the public good.

‘This is the first time the National Trust has undertaken research of this nature and it has given us a clear indication of the huge investment landowners around New Zealand have made in covenants since the National Trust was set up 40 years ago,’ Trust Chair James Guild says.

‘With the release of this report we acknowledge the hard work, philanthropy, generosity, and passion of the thousands of landowners who have voluntarily elected to covenant special places on their land with the National Trust.

‘Together they are making a very significant contribution towards the protection and enhancement of our threatened ecosystems and biodiversity on private land to ensure New Zealand’s uniqueness is protected forever,’ he says.

The QEII National Trust partners with private landowners wanting to permanently protect special natural and cultural features on their land with covenants. QEII (open space) covenants are legally binding agreements that are registered on the land title and protect the associated land and its natural values forever. The covenanting landowner and subsequent owners retain ownership of and management responsibilities for the protected land.

The QEII National Trust is the perpetual trustee to ensure the purpose and objectives of the covenant are achieved by monitoring the covenant and providing advice and other support to the landowner.

Analysis of data collected for the study has shown environmental gains  and substantial costs, both direct and in lost potential earnings, for land owners:

· Waterway protection (20%), restoration planting (19%), wetland restoration (18%), weed control (15%), pest control (7%) and fence maintenance (7%) are the major contributors to total maintenance costs for QEII covenants.

· The total estimated maintenance expenditure on covenants is $25 million per year and has a net present value of $387 million (calculated over 30 years). That equates to an average of just under $6,000 per covenant per year or $150 per hectare of covenanted land.

· 53% of covenanted areas would have had an alternative economic use (for example, grazing, residential development, exotic forestry) that is foreclosed by the decision of the landowner to covenant the land to protect its natural values. Grazing is the most common economic use foreclosed by the covenant, followed by housing and exotic forestry.

· The total opportunity costs (the loss of potential income from other alternative uses due to development and use restrictions) associated with the covenants that had alternative uses foreclosed is estimated to be in the range of $443 million to $638 million. That equates to approximately $105,000 per covenant or $2,657 per hectare of covenanted land (calculated over 30 years with a 5% discount rate).

The loss of potential earnings could also be reflected in a lower value for the whole property when it’s sold.

· The total estimated expenditure on covenant establishment up until June 2016 was around
$205 million. That is approximately $50,000 per covenant on average, or $1,228 per hectare of covenanted land.

· The biggest cost for landowners establishing covenants is fencing the covenanted areas to exclude livestock (30%) followed by initial weed control (18%), restoration planting (10%) and wetland restoration work (10%).

· Calculated over a 30-year period with a 5% discount rate, the annual maintenance expenditure on covenants adds up to an investment in the order of $92,000 per covenant or $ 2,300 per hectare of covenanted land.

· The estimated net present value of the total commitment by land owners across the nation in
QEII open space covenants is estimated to be in the range of $1.1b to $1.3b, or over $260,000 per covenant.

· It should be noted that despite virtually all QEII covenants running in perpetuity, the maintenance costs and revenue foregone has been estimated only over a 30 year period with a 5% discount rate.

QE II covenants are a win-win for conservation and property rights.

Landowners retain ownership of their land while preserving landscapes of aesthetic, cultural, recreational, scenic, scientifc, or social interest or value.

The full report is here or a hard copy can be requested by writing to the QEII National Trust, PO Box 3341, Wellington.

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One Response to QEII covenantors invest millions in conservation

  1. So good to know that those of us with covenanted land are part of a huge movement that’s actually making a difference. Great to see the big picture….

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