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Guy Trafford assesses how Australia is handling the 'opportunities' they have with forestry and carbon credits, and finds minor progress driven by local issues

Guy Trafford assesses how Australia is handling the 'opportunities' they have with forestry and carbon credits, and finds minor progress driven by local issues
Photo by Collie Coburn on Unsplash

With the interest and concerns over the amount of New Zealand pastoral land going into forestry it prompted me to look over the ‘ditch’ to see if comparable interest was being generated over there.

Australia has not progressed their emissions reduction policy to the same degree as New Zealand to the point where many have criticised the Federal Government as being irresponsible for the lack of progress.

It has actually got to the point now where the recently negotiated Free Trade Agreement (FTA) with the UK is being questioned due to Australia’s failure to make progress on what they agreed to do under the Paris climate agreement. The UK had removed any requirements to the Paris Agreement in the FTA whereas there was an expectation from the UK opposition parties that there would be inclusion of reduction policies in any such agreements. Ed Miliband, Labour’s (UK opposition) business secretary, said the government should be doing more to put pressure on Australia to come forward with stronger commitments on greenhouse gas emissions before Cop26, rather than watering down a trade agreement. He said: “Australia is one of the world’s biggest polluters and key to the goal of limiting global warming to 1.5C. But rather than piling pressure on them, the UK government has simply rolled over."

So, a tacit warning to New Zealand that when conjuring up FTA’s, words may not be enough and action supporting the words (policies) are required. In reality with the latest policies being rolled out in New Zealand and the wide inclusion into the ETS programme New Zealand should be on safer ground than most countries although the exclusion of Australia having to meet similar requirements does provide them with trade advantages, at least in the short term.

However, back to land going under trees in Australia compared to New Zealand, the lack of a well developed ETS market in Australia seems to have resulted in less motivation to develop the carbon farming sector in Australia. Given that land is cheaper over there plus potentially easier access for harvesting, if that is considered to be part of the income stream, it is surprising there is not greater evidence of widespread plantings.

However, that is not to say that there is not some activity starting to emerge.

Relating to land ownership individuals or businesses can apply to the government to receive carbon credits to match mitigating programmes they have. Credits come in the form of Australian Carbon Credit Units (ACCU’s) which are instigated at 1 unit per tonne of CO2e.

Eligible activities that landholders can undertake to produce carbon credits include:

  • changes to livestock management
  • protecting native vegetation at risk of clearing
  • regeneration or reforestation of native vegetation
  • improving soil carbon

One example which has come to prominence is in Western Australia (WA) where a 700,000ha cattle property, Bulga Downs Station has become one of the first privately owned Australian farms to create and sell 125,000 carbon credits, two years after a Human Induced Regeneration (HIR) project was developed.

In this case land identified as being suitable for ‘carbon production from trees was fenced off and watering spots spread out to create a situation where there was less stocking pressure on regenerating trees and shrubs. This should also make the stocking system more resilient in droughts years.

The programme is pegged to run for 25 years and over that period with guesstimates done on the future price of carbon they estimate AU$36 million able to be generated.

It appears that the Federal Government also allows livestock farmers to receive credits for reducing livestock emissions and the example shown has beef cattle herd management projects reduce the overall emissions intensity of pasture-fed beef cattle herds. Changes are made to herd structure and new management actions are implemented to improve herd productivity. Landholders or managers earn carbon credits through the emissions reduced per kilogram of beef produced.

Activities that improve herd performance and reduce emissions intensity include reducing the average age of the herd, reducing the proportion of unproductive cattle within the herd, or changing the number of cattle in each livestock class within the herd. Given that farmers are not held liable for their emissions it seems a good deal.

One of the reasons given that not more tree planting options have been used is a federal rule that prevents tree plantings in many areas. The restriction is driven by rainfall.

Rainfall criteria are based on long-term average annual rainfall as per the “CFI rainfall map”.

  • if rainfall is more than 400 mm per year, plantations can occupy an area no more than 100 hectares, or 30 per cent of a farm (whichever is the smaller)
  • if rainfall is less than 400 mm per year, plantations can occupy an area no more than 300 hectares, or 30 per cent of a farm (whichever is the smaller).

Carbon uptakes by trees are diverse across Australia with the below table providing some idea.

Total sequestration (Seq.) and mean annual value of carbon offsets generated from sequestration activities over the period from establishment until storage equilibrium (Equil.) is reached ($/ha/yr). Offset values have been adjusted for withholding a 5% risk-of-reversal buffer from sale.

Source: Dept Primary Industries W.A.

Australian forestry interests are lobbying the federal government to try and get the rules changed.

Another disincentive in Australia is the ability of Australian emitters to purchase (cheap) international CER credits (not possible in New Zealand). This ability has kept the ACCU credits at lower demand and therefore cheaper. However, it is looking likely that this ability is going to be discontinued and already ACCU’s are starting to increase in value with the latest price at AU$22 per tonne of CO2e. This pales in comparison to New Zealand credits which are now in the mid-NZ$60’s.

Land values in Australia are diverse but generally lower than New Zealand with an Australian Rural Bank report putting Queensland agricultural median price for land at AU$5,000/ha and NSW at AU$6,000/ha although larger blocks are considerably lower.

It is likely that Australian carbon returns will continue to ratchet up and with a bit of Federal action this could occur quite rapidly. So, perhaps it may divert some of the international attention New Zealand is experiencing over to there.

New Zealand forests over similar 30-year time frames can sequester between 300 -400 tonnes of carbon per ha.

New Zealand farmers do have the option of incorporating the mixed livestock and carbon farming with trees. Although in New Zealand’s case, credit will only be given for the carbon sequestered by trees not any livestock reductions. The aerial photograph below is an example of poplar trees which were planted around 20 years ago at about 100 trees per ha.

 It is believed they meet the criteria of :

  • Reach at least 5meter height at maturity
  • 30% minimum of canopy caver
  • Minimum of 30sq metres of canopy cover per ha.

In this case Veronese were planted on the steeper and more wind exposed areas with Kawa on the lower slopes. There are likely improved varieties available now.

These trees were pruned up to approx. 5 metres in the later summer providing more stock feed and potentially enabling the trees to be used for timber if desired. The trees were established by 2 metre poles with sleeves on for protection from sheep, and cattle withheld for two years while the trees established.

The aim at the time was to protect the hill face from erosion and enable the main access track to be kept intact. It was pretty successful, and livestock could fully integrate with the trees after two years with little loss of feed. Certainly, less than would have been lost through erosion.

Source: Google maps

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18 Comments

Although in New Zealand’s case, credit will only be given for the carbon sequestered by trees not any livestock reductions.

We really, really should have a similar financial incentive for stock number reductions.  The Australian's got it right in that regard - a form of payment for ecosystem services (PES).  Far more needed here in NZ given our intensive grazing and its effect on the state of our freshwater resources.

I've often felt we would have been better to just put a tax on carbon and fund PES incentives out of that ring-fenced tax take.   

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Stand back two more paces.

Society cannot afford itself. It depends for its energy - and therefore its work - on underground acres. These we extract, burn, and exhaust. The exhausting is now global-forcing, but we are using 40% of the land area to support ourselves, and deforesting 5 million hectares a year globally last time I checked. We'd have to reverse/offset that, first. Secondly, we have to be off Fossil Fuels COMPLETELY by 2030 (E/R, Greta T) and any seedling planted NOW, is going to be absorbing diddly-squat by then.

So we cannot solve the predicament by absorbing carbon above-ground, we're out of time. We would also be competing with present forms of food production. Yes, we could all go vegan . No, if we don't curtain population, that won't do more than kick-the-can. Veganism is the right answer to the wrong question.

And we cannot solve the predicament by all driving EVs. They too, are a right answer to a wrong question.

As for tax, and/or other financial incentives; yes, they may drive some change, but no, it can't work financially; we are already heading deeper into debt every day, already depleting/degrading every day, and every next choice is 'worse'. Of everything. There is already not enough energy going into the system, to keep doing what we're doing (note one hegemonic power retreating recently) let alone do more. So money - perhaps soon - becomes an invalid marker. Carbon 'prices' are dependent on an intact (still believed-in) money system - but we weren't paying for sequestration and we were already copping $3-plus of debt for every $ of GDP - and GDP is a reality-dodger before that. And interest-rates are stuck at nothing - which was entirely predictable from an energy POV.

So we need rules, and ultimately rationing (physical reality is starting to do that anyway). Yes, we need to plant more trees and create more biodiversity; but that's not to absorb fossil-fuel carbon; that's just to reverse the damage we've already done above ground. Fossil energy we've just go to stop.

But we won't; because without FF energy, society doesn't exist. Not even close. Hyman Rickover was about right estimating work do-able by renewables at 15% of FF. That's orders-of-magnitude adrift, and we don't get there by 'investment' and 'return'. They both expect 'growth'.

https://ourfiniteworld.com/2007/07/02/speech-from-1957-predicting-peak-…

https://surplusenergyeconomics.files.wordpress.com/2020/06/see-introduc…

Interesting times.

 

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I'm not trying to solve the CC predicament (I agree with you, we are past certain tipping points) - e.g., in particular;

https://www.sciencetimes.com/articles/32630/20210803/thawing-permafrost…

No way can sequestration combat this natural release of GHGs.  Never felt we could plant our way out of this.

But with a step-change in thinking on environmental management, PES should be used as a mechanism to solve our current freshwater crisis (by way of 'cushioning' the path toward de-intensification).  And, yes, cushioning with a 'token', but solving that one (what to do with the failing fiat currency system) is seemingly beyond anyone's pay grade at this stage. 

PES as a concept is a part of the discipline of ecological economics, whereas the ETS (a market mechanism) is neoliberal economics.  Under a PES scheme we could also scrap the ridiculous application of 'grandfathering' (i.e., of rights to pollute, of irrigation/water take rights, etc.), another left-over from the sanctity of 'property rights' under a neoliberal framework.

 

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I get you - agreed!

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Kate, you need to turn your thinking of PES as a mechanism to solve our current freshwater crisis off.  To truly make a difference we need to stop only looking at land use, and start looking at land scape as a first step. That is not landscape in the usual sense of what you see when you drive around the country.  It is what lies beneath, and gave birth to, and gives structure to, the land above.  It is more than even physiographics, though that is a part of it.  It is also about hydrology.  It is far more fundamental than land use.  Once land scape  is understood truly informed decisions can be made. Some scientists 'get it', but many do not, and while there is slow traction on it, the penny is starting to drop in some circles, just not those who make the rules as they are too focused still on siloed thinking of just nutrients.  Giving landowners this basic understanding should be one of the first things to be prioritised.  Technology could enable this to happen quite quickly. 

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I know what you are getting at.  And I don't disagree.  But, once we more fully understand land scape, what do we do about those private property rights to land scapes that dictate de-intensification is needed?

To my mind, that is where a PES comes in.

 

 

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PES could be a rabbit hole best left untouched at this time. :-)  'We' don't do anything.  It will be up to landowners/communities/RCs and perhaps govt to reach agreement.  One size fits all isn't a good fit environmentally where multiple areas have a multitude of varying factors and issues.  Or it might mean many more pine trees in the landscape and foreign ownership and the corporatisation of land holdings. 

There is still so much unknown Kate - RCs water and land plans for one example.   Government has committed to restoring water health within a generation. It may be too early to talk of PES.

 

 

 

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 It will be up to landowners/communities/RCs and perhaps govt to reach agreement. 

Sounds like another round of voluntarism to me - and we all know how that gets drawn out and out and out and then.... regulation ensues and is resisted!

What you're saying is more science, more discussion, more time.

Seems to me we've done that near to death (of ecosystems that is) - time to address 'the four horsemen of the freshwater apocalypse' some other way, and urgently to my mind.  That linked article is worth quoting;

“Nitrate, phosphate, sediment and microbes—these are the four horsemen of the aquatic apocalypse that ride across the country’s freshwater estate.

Their scourges are many: murky river reaches that once ran gin-clear, dead zones in lakes where oxygen levels have dropped to zero, slime-covered stream beds, algal blooms, the steady disappearance of freshwater fish and invertebrates from traditional habitats, the steady rise of faecal bacteria such as E. coli…

The country is having a Rip Van Winkle moment, an awakening to a changed reality. It has split the public into polarised factions: town vs country, conservation vs development, individual rights vs the common good. Passions are inflamed. Duelling narratives compete for dominance: Who are we if not a farming nation? Who are we if not a country of healthy rivers and lakes?”

 

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No Kate, some of it is already happening - just doesn't get shouted from the roof tops.  In our catchment farmland (2+ farms) have been bought up to be taken out of agriculture and will be planted up with part turned in to a kai pa. There are other initiatives out there too.

The perception of polarised factions are usually a media construct regurgitated by lobby groups. Your quote is an example of emotive writing - all four 'horsemen' appear naturally in water.  And the levels of nutrients vary according to weather and season.  That is not to say that there isn't room for improvement.  But what needs to be understood is that those river/water systems with lag times of 40-80 years are not potentially going to see significant change for a long time. 

How do we define 'healthy'.  From a human want perspective (swimming) or a native fish perspective, or a trout perspective?  Personally the native fish win out with me.

There were RCs with Land and Water Plans going through the Environment Court when the govt decided to change the rules.  Now those plans need to be thrown out and started again, some like Horizon's and Southland had gone through years of consultation with community pretty much aligned to the new plans.  If you are concerned about the time line take it up with the govt. ;-)

Government is still consulting on parts of freshwater reforms.  While consultation is still happening no decisions can be made.  I fully support the new whitebait regulations.  If we want more native fish we first have to stop pillaging them and eating them.  

 

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Australia would struggle to offset the annual bushfires with new plantings in other parts of the country wouldn't it?

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Well spotted:-)

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Absolutely.  Herein lie the problem. The world is ideologically focused on off-setting something that can't be off-set.

" The carbon market is based on the lack of delivery of an invisible substance to no one " . 
Shapiro, M. (2010). Conning the Climate. Harper’s Magazine.

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They have agreed they can't offset the whole carbon increase , they are trying to limit the amount of carbon to limit the temperature increase to 1.5 degrees celsius. the permafrost and ice sheet situation just proves we can't predict the "tipping points" , or consequences of carbon increase. But To me that s all the more reason to reduce the carbon equation as much as possible. Carbon credits are an incentive to do that .

We can't see Covid either , but sure are seeing the effects.   

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Carbon credits are not an incentive to reduce carbon emissions - they (the market) was established as a mechanism for polluters to continue to pollute provided they can pay. 

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If the credits were dished out without earning them , yes. ( lets ignore the politically necessary dishing out of free credits to some big polutters for now. 

but a business has a choice , reduce your carbon emissions or buy carbon credits to cover those emissions. If they already have credits , they can reduce thier emissions, and sell the credits.

Its not perfect , no market system is . f there were no caps , and the government didnt have to keep the price down , it would be a far greater incentive.

The real problem is the world as a whole did little to nothing for 20 years after the Co2 link was known to exist. now we are hoping to limit to 1.5 degrees temperature rise, and starting to take it seriously. but we are way behind where we should be .    

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lets ignore the politically necessary dishing out of free credits to some big polutters for now. 

Why ignore that?  It's a crock, just like the free-pass for the next five years for agricultural emissions - and then when they do join - they get subsidies as well.  It wasn't politically necessary by any means.  What was actually politically necessary was to force the quick adjustment needed - if - you believe in a sense of urgency to the problem.

The world as a whole still isn't really doing anything of note - Paris is a voluntary, non-binding agreement.  And that suits politicians and the big end of town just fine as they can continue to feed their economic growth mantra.  

I think you are right - no market system is perfect - and as we just found at the last ETS auction, now we have speculators to contend with as well.

 

      

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Personally , yes , i think this government has sqaundered (how does the spell check work on this new format ???) a big political lead , and could have gone harder. Shaw perhaps put too much empashise on cross party support. I would like someone to calculate how much each Tiwai point job has actually cost to "save" , i suspect we could have saved money by paying the workers more to stay home.

But then whats next , the biggest villian is probably our addiction to the private motorcar, pretty much for 1/2 the first world, and a growing portion of the developing. No one even wants to mention international air travel . 

Then I look at Australia's $ 22 per tonne , and that obviously has no effect on carbon output, which puts paid to the idea of allowing our polluters to buy overseas.

The governments best plan is probably to raise the cap, restrict the auctions to companies that actually need them , and claw back some of the free credits from the big internationals .

Then , petrol hits $ 3 a litre , they lose the election , and we are back to the need for cross party support or its a waste of time .

In some ways , the ball goes back to National and Act  irresponsibly implying they would claw back the "fast changes" , without telling us what they would do instead.     

 

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The Bulga downs station project will be interesting.  I wouldn't be surprised if they actually end up with more beef production from the reduced amount of stock. 

I have always thought that mangrove plantations would be the way to go for Australia . they have land below sea level , access to sea water. etc . building a few canals would reap quite large areas , where the ground water is far below , and they wouldnt have to worry about salt infiltration. 

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