SPECIAL REPORT: A multi-million hectare opportunity to sequester carbon is available to Australia right now, but a perfect storm of market failures and policy shortcomings is holding back the potential of agricultural land to contribute to this important opportunity. In this in-depth report The Fifth Estate interviewed carbon market experts and farmers to find out where the barriers are and how primary producers can lead the way in emissions abatement.
When Bloss Hickson took up her property, Huntly, in the brigalow scrub of Western Queensland in the 1980s, one of the government’s requirements was for her to develop the land and “keep it under control.”
Hickson told The Fifth Estate her plan was to operate an organic grazing operation – and she aimed not only to retain some of her vegetation but also improve it.
In 1987, the Queensland Department of Primary Industries recommendation was to keep 20 per cent of the tree cover, and clear the rest.
But she wanted to retain more than that. This was made possible by vegetation offsets from Rio Tinto.
The offsets meant retaining the vegetation in perpetuity, but they also provided a financial reward.
Having more vegetation also meant being able to run fewer cattle than on a similar property with less vegetation.
“If properties were designed properly, and people were aware of the benefits of having more vegetation in the landscape, it would be a win-win,” she says.
There’s the emissions reduction and sequestration win, and there is also a productivity win. Her vegetation areas include native trees and shrubs that her organic Brangus cattle forage from.
While other farms around her are lacking feed during the current prolonged dry, she still has fodder.
“My cattle do well in dry weather.”
Her cattle are getting around 15 to 20 per cent of their feed from foraging the native vegetation. The main sources include a shrub called Dead Finish, also Sally Wattle, another species of acacia and hollybush.
Her trees even stopped a newly-hatched locust plague one year because the insects got caught in the webs of Golden Orb spiders hanging in the trees, attracting flocks of birds to feast on the trapped locusts.
The vegetation areas are also seeing some diversity re-emerge in terms of native grasses in a region heavily dominated by an introduced grass species that is now experiencing widespread dieback issues.
She says an agronomist recently told her that the die back occurs because having been a monoculture for so long, it has become vulnerable to pathogens and fungi.
Having more diverse flora and fauna all contributes to the health of the farm system, Hickson says.
She has also studied soil, and knows how important healthy soil is.
Gaining the credits is not straight forward
But gaining credits for carbon being sequestered in her soil is not a straight-forward proposition.
Being dry country, the soil carbon levels are highly variable. In a good year, it builds up, and in a drier year, it depletes.
Hickson did have a large area of paddock tested for soil carbon – at great expense – but as well as variability, lack of a viable and accessible carbon market means she has not tried to find a buyer for her soil carbon.
Also, the credits associated with any areas of mapped retained vegetation have already been “zapped up” by the Queensland government, she says, to balance out its coal mining related emissions.
Hickson says there appears to be a link between when carbon became a claimable commodity post-Kyoto, and the Queensland government suddenly introducing vegetation management planning.
Louisa Kiely director of Carbon Farmers of Australia, says carbon credits “supply is not the problem”.
In a nutshell, she told The Fifth Estate, the problem is the lack of any drivers in Australia aside from the ERF, which means there is no local market outside the ERF.
However, because Australia is nowhere near on track to meet its Paris commitments, in five to 10 years she believes the carbon markets will be looking at primary producers to supply credits.
Currently, however, uptake of the Soil Carbon Methodology released in February this year and any further land-based methods has “stalled”, Kiely says.
The projects that have benefitted to date have been confined largely to projects such as those aggregated by Green Collar in Western NSW.
Credits around all the ecosystem services land managers can provide are largely missing, except for some credits associated with protecting the Great Barrier Reef and its catchment.
Time to look internationally for a carbon credit market
Kiely says carbon farmers are now starting to look outside Australian Carbon Credit Units for a market.
There are other standards internationally that can deliver a credit, she says.
Internationally is also where CFA members are looking for buyers.
Carrot or stick
Kiely says that if a way of offering the carrot of credits to farmers is not found, then the stick of regulation is bound to follow.
Moore says that because 95 per cent of carbon credits generated through vegetation management have been bought by the Australian government via the ERF, there is no other significant domestic market.
“The voluntary carbon market in Australia is fractured,” he says.
There is no single source a carbon farmer or a potential buyer can go to and find out what buyers are out there, what the demand is and how to contact potential buyers or producers.
It’s all happening on a “boutique, case-by-case” basis and the market itself is opaque, he says.
Lack of clear pricing signals is also a problem.
Currently, entities looking to purchase carbon credits for the purposes of achieving carbon neutral certification have a willingness to pay between $3 and $20 per tonne of CO2e sequestered or abated.
Some of those entities are buying “junk”, Moore says.
They will buy the “large volume, low priced stuff” because the point is to get to carbon neutral at a very low cost. They are not looking for the stories associated with the investment.
On a policy level, the clearing debate is distorted by “entrenched bureaucratic positions” of either all carrot or all stick.
As Bloss Hickson puts it – when the coalition is in, anything goes, and when Labor gets in clearing is constrained.
Moore says there does need to be some form of fee paid to land managers for stewardship.
Currently, an individual farmer isn’t able to benefit from their stewardship in terms of public rewards, even though the benefits are there for all Australians in terms of emissions reductions, water quality, biodiversity and soil health.
Instead, the farmer bears the cost of stewardship.
“There needs to be an integration of the sticks and carrots. All we’re seeing at the moment is wild oscillation,” Moore says.
“We need to have a discussion and get the economics right.”
We need to pull emissions out of the atmosphere now
According to director of Biodiverse Carbon Conservation Tim Moore we can do all the emissions reductions we want and put solar panels on every roof, but if we are really serious about avoiding a two degree rise in global temperatures by 2100, the only thing we can do pull emissions out of the atmosphere.
While many of the new technologies and geoengineering proposed for absorbing emissions, such as cloud sprays or additives in the oceans might be “novel and interesting”, the proven technology for absorbing carbon is growing trees. And we are not seeing enough of it.
Biodiverse Carbon Conservation, a social enterprise joint venture between Greening Australia and Australian Integrated Carbon, is focused on the use of carbon and environmental markets to landscape-scale environmental rehabilitation projects.
Moore says that data shows that human-induced regeneration is the cheapest way to abate carbon emissions, and this can be seen in the outcomes of the Emissions Reduction Fund auctions.
The vast majority of successful projects involve avoided clearing, while most of the balance involves the active replacing of trees on country.
Bushland returned to land, under the ERF or otherwise, sequesteres an “enormous amount” of carbon, he says, and it provides habitat for native fauna, among other benefits.
Australia has between 20-35 million hectares of land that could be restored with biodiverse plantings driven by a good carbon price, according to The Wilderness Society in its Towards Zero Deforestation plan submitted to the Climate Change Authority in October 2017
The outcome of planting this massive area would be between six and eight gigatonnes of carbon drawdown by 2050.
However, at the time of writing federal government expenditure allocated for biodiversity and drawdown projects was just 0.04 per cent of total government in budget in 2020-21.
While the scientific carbon case for vegetation is established, there are “mixed views” about how regeneration integrates into regional economies, Moore says.
Once we have “used up all the cheap stuff” in terms of avoided clearing, the next opportunity for widescale land-based abatement is farm forestry and planting of biodiverse vegetation.
Farm forestry has a fairly straight forward business model, with a largely monoculture block of trees planted to be harvested for use in wood-based products including construction timbers, paper and fibre production.
The calculations to assess average carbon abatement over a 100 year period are also straight forward.
The landholder can reap a revenue stream from both the carbon credits and the end product.
But what Moore’s organisation is most interested in is biodiverse conservation blocks. These may come from retired farmland, where the soil has become so unproductive it cannot be utilised for growing crops or grazing any more.
This is something that many farmers have had to do due to poor management practices, Moore says.
On other farms, biodiverse plantings can involve allocating between 10 per cent and 30 per cent of the farm area back to native vegetation.
Moore says research is showing this can have a large number of productivity benefits for the farmer.
It is something Greening Australia is working on, increasing the appreciation of native vegetation shelter belts as a productive farm tool. It is currently creating “robust information” for the farming sector.
An example of the benefits can be found on sheep properties, where wind, frost and sudden low temperature events can result in the mortality of up to half or more of the new lambs in a paddock.
Shelter belts of native vegetation can cut that mortality rate to between 75 and 95 per cent – directly improving the farm’s profitability.
“That is a measurable economic benefit,” Moore says.
During hot spells, the physical protection of shade is also beneficial. Trees shed water in hot weather, reducing local temperatures and therefore stress on stock.
Another plus for the shelter belts, is research showing strips of native vegetation can sequester around three times as much carbon as large block of vegetation.
The reason, Moore says, is the trees are not competing with neighbouring trees, so can spread their roots further out into the paddock.
Trees also bring up nutrients from deep soil layers and improve the water holding and moisture permeability qualities of soil, extending out as much as 30 or 40 metres into the paddock.