A hard Act to follow

The government is setting up the bizarre situation where plantations are targeted for carbon storage and native forests for logging. Changes to the Tax Act, together with emissions trading, will threaten native forests even more than they currently are. In November, the Federal Labor government and the Liberals banded together to defend these changes.

What are the changes?

Plantation companies, carbon sink investors or coal industry interests can now buy up large tracts of farm land for tree growing to score carbon credits. They will be able to claim the price of the land as a 100% tax write off in the first year. This will be a huge incentive to buy up big as the land will be very cheap for them.

Isn’t it good to plant trees?

It’s even better to leave native forests standing and let them absorb more carbon as they regrow to maturity. But, under the government’s carbon accounting system, native forests are not credited as carbon stores but plantations established after 1990 are.
That means plantations will be left standing while native forests are cut down.
It needs to be the other way around because we need permanent carbon storage, which is what you get in self-regenerating, resilient natural ecosystems. The only kind of replanting that should attract incentives is re-establishment of permanent native vegetation.

What are the down sides to this?

There is nothing in the new changes that enforce growers to leave trees standing as carbon sinks. These poorly considered changes encourage investors to buy farm land cheaply, plant trees and claim carbon credits. Then when food production becomes more lucrative, cut down the trees, release the carbon and grow pasture or crops again. Currently, they would not incur a penalty for cutting down the trees and emitting the carbon. It’s a win-win investment.


Instead of reducing their emissions, large polluters can instead buy land and plant a crop of trees. Tax payers will subsidise the polluters’ cheap mitigation costs. Energy efficiency and renewables get no similar incentives or tax breaks.
There is no guarantee that these tree crops will have a positive impact long term (more vulnerable to disease, fire and corporate fluctuations).
Besides the disruption to rural communities, plantations grown in the wrong places will soak up scarce water, drying out catchments. This will be free water for them at a huge cost to others.
Just as food prices are going up, loss of agricultural land will further increase prices.
Existing plantation growers (who have already received tax deductions as MIS schemes), can choose whether to grow wood or carbon. Even at a relatively low prices of $10-15 a tonne for CO2, carbon looks more lucrative.
The result is that plantations will fill the gap between now and untested plans of pumping coal pollution underground (geosequestration) in 15-20 years time. How neat – Australia can meet its 2020 targets while letting fossil fuel polluters off the hook again.

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