Can Money Grow on Trees?

BIODIVERSITY PLANTINGS AS CARBON FARMS

14 DECEMBER 2020

Revegetation in the Wet Tropics needs to be scaled up quickly to absorb carbon and restore habitat for our plants and animals, particularly in refugia areas in future climate scenarios. However, money is the main barrier because cleared land can be used to generate an income from farming and also because it can be costly to establish and maintain biodiversity plantings, particularly in the Wet Tropics.

So, a project funded by Terrain’s Natural Capital Fund explored whether biodiversity plantings could earn money as carbon farms as a way to incentivise more revegetation.

The basic criteria for carbon sequestration are that projects have to:

  • be planted on land that was cleared and then grazed, cropped, pastured or left fallow for at least 5 years (i.e. not recently cleared)
  • establish and maintain trees that have the potential to grow to a height of at least 2 metres
  • establish a crown cover of at least 20 per cent.

While biodiversity plantings meet these criteria and easily exceed the height and canopy cover requirements, the costs involved in registering a planting as a carbon farming project means that revenue needs to be fairly high to offset the costs. This would be possible if:

  • the method used to measure the amount of carbon sequestered in a planting calculated high sequestration from biodiversity plantings, which therefore earned a lot of carbon credits
  • the price of carbon credits was high
  • the additional biodiversity values of biodiversity plantings attracted a higher price.

Through this project Terrain supported TREAT to run a pilot carbon farming project to analyse the costs and economic outcomes under different scenarios. The Freeman’s Forest project was registered in 2017 and TREAT volunteers planted 5000 native tree seedlings over 1.6 hectares.

The findings showed that it is possible to make a profit from carbon farming with biodiversity plantings, but it is more likely when:

  • The size of the project area is large. This project showed that 1.6ha is too small and wouldn’t event cover the cost of the audit even though it is possible to get a lower price for community-based projects.
  • The price of carbon is high.
  • The auditing costs are low.
  • The costs of revegetation are low, for instance, by using other sources of income like grants or in-kind contributions to cover the costs of planting.

Currently, the models used to calculate carbon stored by projects underestimate the high carbon stored in rainforests. However, if they are improved and they begin to more accurately reflect the value of biodiversity plantings, the potential for making a profit will also be improved.

If you would like to find out more about the detailed economic analysis of this project the summary of the final project report is available on the Wet Tropics Plan for People & Country:

https://www.wettropicsplan.org.au/regional-themes/climate-futures/resource-library/

The findings from this project formed the basis of Terrain NRM’s feasibility study into ‘Cassowary Credits’, which is moving into the next phase of development. For more information about this program read more here:

https://terrain.org.au/cassowary-credits-scheme/

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