CMAs involved in carbon trading
News story from 'Climate Change, A NSW Department of Primary Industries special feature', in The Land, October 2008
Planting trees on agricultural land is one action that can contribute to mitigation of climate change. Trees sequester carbon from the atmosphere as they grow, storing it in their structure. Approximately half of the dry weight of wood is carbon.
Under the NSW Greenhouse Gas Reduction Scheme (GGAS), reforestation of land cleared prior to 1990 can earn offset credits that can be traded with the electricity retailers, who are obliged to reduce or offset emissions from electricity generation through such measures as establishing forests. Certain guarantees must be met to secure the carbon sequestered: carbon rights must be registered on the land title, as must a 'restriction on use' of the land, to ensure carbon stocks are maintained for 100 years. [Individual landholders cannot readily participate in emissions trading due to the high overheads in becoming accredited as a provider of forest offset credits.]
Catchment Management Authorities (CMAs) are providing incentives for landholders to establish new areas of native vegetation to enhance biodiversity or reverse land degradation. The revegetation undertaken with support from CMAs could be eligible to earn credits under GGAS.
In a pilot project, DPI is working with seven CMAs to investigate the feasibility of CMAs becoming accredited under the GGAS scheme to manage a forest sequestration pool. The concept is that CMAs could manage a pool of eligible plantings, sell the abatement certificates generated, and share returns with the landholders.
This project has identified the actions required, and costs, for a CMA to apply for accreditation, and estimated potential returns for CMAs. Some modifications to current systems would be necessary, and third parties may be engaged to provide technical support to pool management operations. Keeping costs to a minimum will be important to ensure financial viability. The small parcel size of many environmental plantings on farms is a challenge in reducing costs.
The federal government plans to introduce national emissions trading through the Carbon Pollution Reduction Scheme (CPRS), set to commence in July 2010. The Green Paper released last July states the intention that reforestation will be eligible to earn credits (permits that can be traded with companies required to reduce their emissions). The details of the rules that will apply to reforestation projects (eligibility criteria, carbon accounting approach, requirements to secure sequestration) have yet to be announced, and will become clear when the government's White Paper is released in December. While there may be differences between the rules for reforestation projects between GGAS and the CPRS, the federal government has indicated it will negotiate a smooth transition for existing GGAS participants to enter the national scheme.
Whatever the rules implemented for the CPRS, cost-effective yet accurate methods of assessing the amount of carbon stored in vegetation will be required. Scientists from DPI's Forest Resources Research Unit are collecting data on the growth of native tree species in low-rainfall areas where traditional forestry is not practised. These measurements will allow models to be developed that can be used to estimate forest carbon sequestration. Such models will form the basis of carbon accounting methods for use by pool managers in emissions trading markets.
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