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The role of carbon credits protecting Australia’s forests

Australian Carbon Credit Units (ACCUs) are an important component of the federal government’s Safeguard Mechanism policy whereby more than 200 polluting facilities are now mandated to reduce their baseline emissions, including through the purchase of carbon offsets. Alongside a transition towards clean energy, carbon credits are an essential tool in Australia’s commitment to reduce emissions to meet net zero targets in line with the Paris treaty.

 

Carbon Credits for Protecting Native Forests

Public native forests in NSW are one step closer to lasting protection. Minister Bowen has announced federal government support for the NSW Government’s method for creating high integrity carbon credits from protecting public native forests.

Public expectations, economic conditions, and environmental considerations have led to changes in the Australian forestry industry, as the sector increasingly moves from native forestry to harvesting commercial plantations. This is occurring alongside a growing carbon credit market.

In economic analysis prepared by Mandala Partners, demand for Australian Carbon Credit Unit (ACCU) is projected to increase by 132%, and prices by 78% over the next decade. Carbon credits generated from ending native forest logging can create income to reinvest in regional economies, forest management, and managing changes in the native forest sector.

 

Revenue for New South Wales from Carbon Credits

Mandala’s economic analysis concluded that ending native forest logging in NSW can generate revenue of between $1 and $2.6 billion over 15 years, with a central estimate of $1.5 billion.

NSW is applying for Australian Government approval of an Improved Native Forest Management (INFM) method. If approved, carbon projects created under this method could generate 1.5 million carbon credits a year, by avoiding emissions from logging and capturing carbon in growing forests in state forests.

The NSW Government will be able to invest almost $400 million managing and operating new carbon projects, leaving approximately $1.1 billion which can be reinvested creating jobs looking after our public native forests.

 

Long Term Regional Jobs in Forest Management

Reinvesting income from carbon projects is projected to create 1700 new jobs in our regions, improving how our public native forests are managed.

Under the central scenario modelled by Mandala, $1.1 billion in net revenue will be made available to the NSW Government over a 15-year period. Reinvesting this $1.1 billion ($70 million annually) of carbon income in additional forest management in regional forestry areas will employ an additional 1,354 forest workers, undertaking activities such as pest and weed removal, fire management, and protection of cultural and environmental assets.

A further 344 jobs will be created to implement high integrity forest carbon projects. This includes jobs monitoring forests using the latest LiDAR technology which can create detailed models of forests to ensure that small-scale logging activities or natural disturbances such as fires, pests, or disease outbreaks are detected and managed appropriately.

 

Carbon Credits

Carbon credits are a central part of emissions trading schemes here in Australia and around the world. Carbon credits are created through actions that avoid carbon release or that sequester carbon emissions, for example through stopping clearing of forests or growing new forests. A single carbon credit certifies that one tonne of carbon has been reduced, sequestered or avoided. These emissions reductions are verified under rules allowing them to be sold to companies who need to reduce their own emissions.

Why Carbon Credits are Important

Carbon credits generate investment into Australia’s native forests, creating reliable income to support ongoing forest protection.  Revenue generated from ACCUs for the purpose of preserving Australia’s native forests can create jobs in forest management for regional communities. This incentivises industries to protect native forests for the purpose of carbon sequestration which will have more market value than for industries which seek to degrade native forests.

‘High integrity,’ well designed credits and carbon markets serve several key functions in reducing emissions. 

Firstly, they provide a cost-effective way for businesses to reduce emissions while they invest in onsite emissions reductions and innovative technology. 

Secondly, as emissions targets increase, this drives demand for credits and driving business to reduce emissions directly. Thirdly, they help deliver net zero emissions across the economy.

At a minimum, Australian Carbon Credit Units (ACCUs) must represent one metric tonne of carbon abatement and must be real, additional and permanent. They must represent an actual reduction in emissions or sequestration that would not have otherwise occurred. 

Why Forests are Important in Reducing Carbon Emissions

Forests sequester carbon by storing emissions through photosynthesis in trees, smaller plants and the soil in which they grow. As trees age, carbon is stored in trunks, branches, foliage and the expansion of roots in the soil.

At a large scale, forests operate as significant carbon sinks that can store mass amounts of emissions. Conversely, the destruction and degradation of native forests through tree clearing (by logging for timber production or land clearing to make way for grazing) removes or significantly reduces the amount of tree cover diminishing their ability to store mass amounts of carbon.

When a tree in a native forest is cut down, two things happen: first, the tree releases its stored carbon as the tree fiber decomposes or is used (mostly as wood chips and firewood – rarely as long-lived wood products). Secondly, that tree can no longer continue to grow and sequester carbon as it ages. 

Protecting our native forests has never been so important, that’s why we are calling on the Australian Government to make a plan that fixes the problems in our forests and meets the needs of our regional communities, workers, home builders, and the millions of Australians who want to see our environment looked after.