The emerging carbon economy in northern Australia could generate environmental and livelihood benefits.
The carbon economy is the set of services, industries and commodities that will arise as a result of trading of offsets for emissions (either traded through markets enabled by Australian legislation, or through other markets) or through the development of biofuels or bioenergy industries.
The emerging northern Australia market could be worth around one billion dollars (and realistically over 100 million dollars readily attainable) if all the potential opportunities are captured and a rapidly growing biofuels industry is realised.
Opportunities and challenges
Three strong prospects exist:
- Reduced emissions from fire and livestock that could generate tens of millions of dollars per year if only partially realised
- Increased biosequestration in soils and vegetation that has been shown if fully realised through improved fire management to be worth in excess of $2M per year on the Tiwi Islands alone
- Growing feedstocks for biofuels is an emerging opportunity.
However, there are a number of challenges to be overcome in order to realise a carbon economy in the North, including:
- Very large area and remote geographical location
- Variable climate and comparatively low rainfall
- Heterogeneous landscapes
- Competition for capital and capability
- Complexity of carbon property rights associated with land tenure.
The northern landscapes also contribute to multiple values that have to be reconciled, including Indigenous livelihoods, agricultural production and biodiversity conservation.
Growing the northern Australian carbon
Northern Australia is economically, ecologically, socially and culturally different from southern Australia.
The carbon markets are in an early stage of development, and much remains to be learnt of how northern systems can contribute to the carbon economy. An adaptive management approach will be critical with lessons to be learnt along the way.