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Carbon
credits
There has been a lot of debate in recent
years about the development of commercial markets for carbon
credits. There is evidence that changing the land use from agriculture
to forestry could result in up to 200 tonnes of carbon per hectare
being locked up over 80–100 years. If a market developed
for this process (known as carbon sequestration), farmers might
be able to ‘sell’ part of the carbon trapped in their
forests. Estimates of the value of a ton of carbon range from
two dollars to more than ten dollars.
But implementing carbon credit sales might not be all good news
for Australian farmers. Under the Kyoto Protocol, only forests
planted since 1990 on previously cleared land would be eligible
for the generation of carbon credits. There is also uncertainty
about what will happen when the current protocol ends in 2012.
Questions about how land use is defined must also be resolved
before any carbon credit sales program can be introduced. In
particular, the question about the extent to which the sale
of carbon credits represents the sale of a change in land use
needs to be clarified. Future international environmental protocols
might determine that selling carbon credits represents a change
in land use. If this happens, farmers might be required to buy
back their carbon credits if they want to return the land to
agricultural production.
The cost of monitoring and marketing carbon credits might make
selling credits impractical for most farmers. Irrespective of
implementation costs, it appears likely that forest owners would
only be able to sell a small proportion of the actual carbon
held in the forest. This may allow less precise low-cost measurement
and monitoring methods to be adopted.
Public concern about the greenhouse effect has led to increased
interest in revegetation programs from industry, governments
and community groups. Despite the lack of formal markets and
contracts, farmers are already benefiting from this increased
interest. Farmers own most of the cleared land available for
conversion to forests for carbon sequestration. This means they
can benefit from people’s desire to contribute, or be seen
to contribute, to reducing the greenhouse effect.
However, because some agricultural practices—for example,
land clearing and intensive animal production—are seen
as significant sources of greenhouse gases there is also pressure
on farmers to reduce their own impact or pay a penalty. This
could mean that farmers themselves will need to pay the cost
of growing forests for carbon – as a means of offsetting
their own contribution to the problem – before being able
to sell carbon credits to others.
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