Trees or crops: will carbon farming be the end of agriculture?

Planting trees on farmland can offset emissions, but does it add up? Fabio Strozzi/flickr

Planting trees in cleared agricultural landscapes is one way for the land use sector to help offset emissions of atmospheric carbon dioxide. But will it displace agriculture?

Establishing trees is a robust method because amounts of carbon sequestered are generally measurable and verifiable.

On the other hand, some are concerned that including carbon plantings in a legislated carbon market may lead to trees excessively competing with land for food production and water resources.

So what are the real opportunities for, and constraints on, expansion of carbon plantings in Australia?

To help answer that question CSIRO recently assessed the economic viability of carbon plantings for the whole of the cleared land area. We also looked at some of the practical constraints to rates of tree establishment.

Does planting trees make economic sense?

The economic analyses can be used to identify areas of potentially profitable land but two important caveats always need to be acknowledged up front:

  • The results are critically dependent on the way the economic model is constructed and the underlying input assumptions for costs and revenues. Any model reflects only one view of the most appropriate description of cash flows in the system.

  • The areas of land identified as being economically viable should be interpreted only as “areas of opportunity”. They are not whole areas that would or should be planted to trees, for which many other social and market factors need to be considered. In that sense, it is more constructive to run a whole suite of scenarios to test the sensitivity of model assumptions on predicted results.

Our recent study calculated the net present value over 40 years of carbon plantings for 105 scenarios covering a range of assumed carbon prices, costs of plantation establishment, rates of carbon sequestration, financial discount rate and potential cost of a license for intercepting water.

The analysis covered the whole of the cleared land area in Australia at a scale of 1 square kilometre.

Not surprisingly, the areas of land identified as being potentially viable ranged enormously and were highly dependent on the modelled assumptions.

Low discount rate, low establishment cost and high carbon price leads to large areas across Australia being calculated as economically viable and vice versa.

However, some scenarios are more plausible than others given current policy and market conditions. Assuming a commercial discount rate of 10% and a reasonable cost for establishment of $3,000 per hectare, no areas were identified as profitable until a carbon price of $40 per tonne of CO₂ was reached.

Can planting trees really offset emissions?

To answer that we need to look at the many practical constraints to the rate at which new plantings can be established. These include supply of seed and labour, infrastructure, availability of land and market capital and the willingness of landholders or farmers to change land use.

Time frames are also important here – whether emission reduction targets are over the short or long term.

For the short term target of decreasing national emissions by 5% compared with 2000 levels, tree plantings could make only a small contribution, mostly because there is less than 10 years left in which to achieve that aim.

The land needs to be acquired or the current landholders willing to change land use and the trees established which in turn is reliant upon sourcing seed and labour. Furthermore, rates of carbon sequestration are initially low in the first few years until trees reach their maximum rates of growth.

Over the longer term, however, trees may make a modest contribution to emission reductions. Our calculations suggest that every 1 million hectares of trees established could offset Australia’s current emissions of 543 million tonnes of CO2 per year by 1.0 to 1.4% over a 40-year period. Ten million hectares would offset emissions by 10 to 14%.

It has to be part of a package

Carbon forestry can be a useful activity to help offset greenhouse gas emissions and restore landscapes but it should be viewed as a long-term project.

It would take decades to establish enough new plantings to have significant beneficial impact. Based on best available knowledge, few areas of land are currently economically viable, especially to the commercial investor.

Finally, recent research published in Nature Geoscience suggests that, globally, the capacity for new tree plantings to reduce global warming in the coming decades is quite modest for a whole range of factors. These include the time taken for trees to grow actively and sequester carbon and, in high latitudes, because trees may actually absorb heat more than the preceding land use.

This last issue is not of concern in Australia. In any case, it should be recognised that planting trees, like any other mitigation technology, should not be seen as a panacea to the climate change issue.

As someone said recently, there is no silver bullet, only silver buckshot. Done wisely, integrating trees into especially degraded landscapes can potentially confer many benefits other than carbon sequestration while minimising the trade-offs.