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NSW Government is leading the way nationally and internationally
to find innovative solutions to climate change, particularly in
the field of carbon sinks and planted forests. These initiatives
are opening the way for new investment opportunities that will place
NSW as a world leader in the emerging carbon business.
State Forests is now working to develop
partnerships between industry, investors, markets and landowners to
facilitate the expansion of our planted forests. It is a win for the
economy, the environment and the landowner. The landowner can either
establish new planted forests to gain access to these opportunities
directly, or can rent land to State Forests in return for an annual
cash payment (an annuity) and State Forests will provide forest
management services directly to investors.
We all know that forests are important
to a healthy environment. Forests protect the soil, provide habitat
for wildlife and clean the air by absorbing carbon dioxide. In
December 1997, this last environmental service was formally
recognised by the Kyoto Protocol, negotiated by countries, including
Australia, which have endorsed the 1992 Climate Change Convention.
The Kyoto Protocol recognised that
efforts to reduce our emissions of greenhouse gases should include
the use of ‘sinks’. These sinks are land-based activities that
remove carbon dioxide from the air. The Protocol identified planted
forests established since 1990 as an important element in combating
climate change.
The Protocol also makes possible what
is known as emissions trading, or the creation of a tradable permit
to offset greenhouse gases such as carbon dioxide. Sinks such as
forests planted since 1990 could also be included in an emissions
trading scheme by generating ‘carbon credits’ through the
absorption of carbon dioxide from the atmosphere. These carbon
credits could be sold to emitters to offset their emissions.
Forests can also contribute in other
ways in combating the greenhouse effect. Plantation thinnings and
sawmill waste can be used to generate ‘green power’ and wood is
a building material that stores carbon throughout its lifetime of
use. Overall, the role of forests land forest products is now being
recognised as a key element in our strategies to reduce greenhouse
emissions. NSW will continue to be at the forefront of the
development of the carbon trading business and other green energy
measures to reduce greenhouse emissions, providing benefits not only
to the environment but also to investors and rural communities.
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New South Wales
continues to be a pioneer in introducing carbon dioxide emissions
trading and exploring methods to use forests for Greenhouse-friendly
products. The first carbon trades in Australia involved State
Forests of NSW working with Pacific Power and Delta Electricity. A
subsequent carbon sink investment project has been announced with
the Tokyo Electric Power Company. State Forests is developing a
complete account of the carbon uptake and storage in relevant parts
of its plantation estate and is working to develop carbon accounting tools that
could be applied throughout NSW, including private planted forests.
It is an exciting new era for
those who grow forests. Now, when we create a healthy forest, we not
only receive a return for the wood products being grown but may also
benefit from trading in carbon credits.
While the formal national and
international trading systems for carbon dioxide emissions are still
being developed, there is growing recognition that we need to act
now to expand our planted forests and build a base that will make a
real impact on the greenhouse issue. NSW has a large area of land
that is potentially plantable to new forests. In many areas these
forests will also contribute to the control of dryland salinity.
Hence, planted forests can now play an even more important role in
farm management.
 Forests
have traditionally been grown for their timber, pulpwood and other wood
products, but they also provide
a range of environmental benefits such as soil protection and improved
biodiversity. A market is now developing for one of these environmental
benefits – the capture of greenhouse gases such as carbon dioxide. Forest
growers could potentially receive income from their trees by capturing
(sequestering) these gases, but this is dependent on a market developing
for 'carbon credits'. State Forests is at the forefront of trying to
develop these markets to benefit growers and the forest industry. Here
are some questions and answers on this dynamic issue.
How do planted
forests absorb carbon dioxide?
As trees grow they absorb carbon
dioxide from the air. They use this to make sugar, starch and complex
molecules like cellulose and lignin, forming wood, branches, roots, leaves
and bark. About 50 per cent of a tree's dry weight is carbon. If a
forest is planted on land that was previously cleared, the growth of the
trees dramatically increases the total carbon stored on the land.
What is the Kyoto
Protocol?
The original Framework Convention on
Climate Change negotiated at the Earth Summit in 1992 recognised the need
for target levels to reduce greenhouse gas emissions worldwide. Since then
countries have continued to negotiate the targets and ways to implement
the Climate Change Convention. In 1997 Kyoto Protocol was a breakthrough
because it set firm targets for national level emissions and identified
key elements in how countries could achieve those targets. These key
elements included agreement on trading in emission credits and the use of
planted forests.
How can planted
forests help Australia reach its emission target?
In the Kyoto Protocol, Australia
negotiated a national target of an eight per cent increase in greenhouse
emissions by the commitment period, 2008-2012. This target level will be
calculated relative to Australia’s 1990 emission levels. Planted forests
are just one part in the solution to reducing greenhouse gas emissions.
Other solutions include increased energy efficiency, reduced energy
demand, better transport and the use of green energy. Planted forests are
profitable and, when combined with the new role of carbon sequestration,
provide one economically attractive way for many industry sectors to
address greenhouse gas emissions reduction. Planting 100,000 hectares of
new forest can take up to 2 million tonnes of carbon dioxide per year from
the atmosphere.
What is carbon
credit?
Carbon credits, or Certified
Tradable Offsets (CTOs), are recognised reductions or absorptions of
carbon. As NSW works to reduce greenhouse gas emissions and expand its use
of greenhouse sinks such as planted forests, these actions can be
registered as credits. Credits should be certified and recognised by a
certificate owned by the individual or company who has created the
greenhouse gas saving. Over time, companies or individuals who create more
certificates than they need can sell these to others wanting to reduce
their greenhouse gas emissions.
How will
international emissions trading work?
Emissions trading will be an
international activity. In the case of planted forests, Australia could be
a world leader, with the opportunity to establish one million hectares or
more of new planted forests in coming years. NSW has high quality land
available for these forests, offers a good climate and attractive
economics for growing trees. It is likely companies and governments in
Europe, Japan and North America will look to Australia as a place where
carbon credits can be developed for international use. Emissions trading
may develop a totally new export service for Australia and earn dollars
for the Australian economy.
If
trading in carbon credits doesn’t start till 2008, why sell carbon credits?
 Australia’s carbon emitters such
as power generators should not wait for international emission trading to
commence. Rules for trading in greenhouse gas credits are not yet agreed,
but international dialogues are under way to develop a workable system.
Trading in carbon credits now will enable the power generation industry in
Australia to participate in development of international trading
regulations. As Sydney is the likely regional centre for trading in
emissions credits, it is important that the trading systems be developed
here early. Technological solutions to reduce emissions to the Kyoto
target levels may not be quick or easy, and could be costly to businesses.
If governments agree to rules for trading in carbon rights as emission
offsets, then carbon sinks may provide cost-effective flexibility in
reducing net emissions in the short term, while new lower emission
technologies are developed. Accordingly, those businesses positioning
early for emissions trading may realise a market advantage once trading
systems are fully developed.
Will the planted
forest be harvested in the future? What does that do to the carbon stored?
In most cases the planted forests
will be harvested for wood products required by the community. These areas
will then be replanted. As the area of planted forests increases, so the
total carbon stored increases. At any point, there will be young,
middle-aged and mature forests in the planted forest estate. Recognised
carbon storage will be based on the whole planted forest estate, rather
than the individual planted forest. In this way, a carbon pool is created.
In addition, harvesting of planted forests can further contribute to
greenhouse gas reduction if some of the wood is used to generate
electricity and replace fossil fuels like coal, oil or natural gas.
How do you
estimate the amount of carbon absorbed (sequestered) by trees?
Using tree heights and diameters,
the volume of the tree is calculated. The tree volume is then converted to
tonnes of dry wood. The weight of dry wood is then divided up into the weight of carbon and the weight of other elements such as hydrogen and
oxygen. For example, a fast growing eucalypt planted forest averaging a
stem growth rate of 20 cubic metres of wood per hectare per year may yield
500kg of dry wood per cubic metre. This will generate 10 tonnes of dry
wood per hectare per year, of which 5 tons (50%) will be carbon.
How can the
landowners benefit?
State Forests is establishing
planted forests of eucalypt and exotic pine on rented land. Landowners who
take up this offer are not required to contribute any upfront capital to
the establishment or management of the planted forest but will receive a
steady income. If you are interested in renting your land to State Forests
please contact the following numbers:
For hardwood planted forests phone
1800 639 691 or softwood planted forests phone 1800 646 775.
Forest management
practices that can restrain the rate of increase in atmospheric CO2
can be grouped into three categories:
- management for carbon
conservation;
- management for carbon
sequestration and storage;
- management for carbon
substitution.
Conservation practices include
options such as controlling deforestation, protecting forests in
reserves, changing harvesting regimes, and controlling other
anthropogenic disturbances, such as fire and pest outbreaks.
Sequestration and storage
practices include expanding forest ecosystems by increasing the area
and/or biomass and soil carbon density of natural and plantation
forests, and increasing storage in durable wood products.
Substitution practices aim at
increasing the transfer of forest biomass carbon into products
rather than using fossil fuel-based energy and products,
cement-based products and other non-wood building materials.
Intergovernmental Panel on
Climate Change Report, Technologies, Policies and Measures for
Mitigating Climate Change, November 1996 |
Carbon Accounting
Nationally,
the Commonwealth Government is working to ensure that Australia has
a rigorous accounting system in place to demonstrate that we are
meeting our greenhouse gas emissions targets.
The
Nation Carbon Accounting System is designed to keep track of the
emissions and sinks in the forestry and land use sector.
Accounting
for the carbon sequestered in a planted forest by use of a carbon
accounting standard will operate within a proposed national carbon
accounting system. This standard was released in mid 2002 [AS 4978.1 (Int)].
A
key part of this strategy is to keep track of our planted forests as
they grow and to ensure that we have an accurate measure of the
amount of carbon being taken up. State Forests of NSW is developing
a system that maps the location of new forests and, at the same
time, tracks the carbon dioxide uptake by these forests.
Want
to know more?
To
register your interest in having forests planted on your land, or to
get information on hardwood plantation establishment call 1800 639
691. To get information on softwood plantation establishment call
1800 646 775.
D I S C L A I M E R
Neither the
NSW Government nor State Forests of NSW represent or can guarantee
that carbon credits acquired through investment in forests have a
particular value or will be able to be offset against obligations to
abate, stabilise or decrease the emission of greenhouse gases. The
allocation of obligations and the methodology for measuring carbon
emissions and risks for the purpose of obligations have not been
settled. Nor have the details for emissions trading generally been
settled.
Participation
in purchasing and trading carbon credits under this scheme is,
therefore, undertaken at the risk of the participants.
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Contact:
State Forests of NSW
Locked Bag 23,
Building 2,
423 Pennant Hills Road,
Pennant Hills NSW 2120, Australia
Phone: (02) 9980 4100
Fax: (02) 9484
1310
Hardwood planted forests call (02) 6643 0488
Softwood planted forests call 1800 646 775 (free call)
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