The latest updated paper from Ross Garnaut on the rural land use in curbing carbon emissions has undermined a key plank of the opposition’s “direct action” climate change strategy.

As the brawl over the government’s detail-lite carbon price announcement dominates parliament, Ross Garnaut has released the fourth of eight papers updating the work of his Climate Change Review undertaken in 2008, focussing on rural land use.

The opposition’s “direct action” climate change policy, hastily cobbled together over summer in 2009-10 after Tony Abbott seized the Liberal leadership, relies heavily on biosequestration to reach the bipartisan goal of a 5% reduction in emissions by 2020. The policy is to spend over $3b picking private sector projects to fund, and relies on “green carbon” biosequestration projects to yield up to 85m tonnes of CO2-equivalent emissions by 2020 at a cost of $8-10 per tonne. No independent experts have endorsed the Coalition’s costings for the program.

The new Garnaut Review paper discusses biosequestration in detail, re-examining issues first considered in 2008, and confirms that “there is large potential for reducing emissions and expanding biosequestration in rural Australia”, although “significant uncertainty remains around how much of the identified technical potential can be realised. For example, the practical limitations, such as the willingness of farmers to change land use practices over large areas, or the economic constraints on establishing timber plantations a long distance from processing facilities, are not taken into account in estimates of technical potential. It is not realistic to expect that all or even most of the technical potential will be realised.”

However, the Review paper confirms that realising the potential will require a carbon price. In relation to specific soil carbon benefits, the paper notes “any incentives for soil carbon sequestration will need eventually to be embodied in comprehensive emissions pricing to avoid suboptimal outcomes.” And one of the biggest potential sources of biosequestration, carbon forests, would only become economically viable as carbon prices rise. Based on CSIRO figures, it suggests a $20 per tonne price could yield a technical potential of 350m tonnes of CO2-e a year.

However, the paper also warns of problems with biosequestration. It recommends an insurance mechanism to address the issue of permanence – i.e., ensuring the carbon that is sequestered in soil or forests stays there. The paper suggests that ultimately a carbon price is necessary to address this issue as well, based on what the Government is proposing under its own biosequestration program, the “Carbon Farming Initiative.”:

Permanence is a critical issue. Unlike other emissions reductions, the abatement achieved through biosequestration can be reversed by events that are natural as well as by human action… Leakage occurs when an abatement activity results in emissions at another time or elsewhere. Leakage would be dealt with in the Carbon Farming Initiative by requiring reporting of increases in emissions that are directly attributable to a project and deducting that amount from credits issued. Some leakage will be unavoidable under an offsets scheme. This is a major reason why the use of offsets should be seen as transitional to full coverage. Accurate measurement of emissions and sequestration is essential to the integrity of an offsets scheme in the land sector. The proposed Carbon Farming Initiative would require offset projects to use estimation methods that are consistent over time. Independent auditing of reported abatement estimates would be required.

Biosequestration will also have costs, says Garnaut. “…there are also potential negative impacts from broad scale biosequestration. For example, there are concerns in the agricultural sector and broader community that a carbon price could make forest establishment financially more attractive on large areas of productive agricultural land, with flow-on effects for food security and rural communities and negative effects on water resources. There have also been concerns about the potential for adverse impacts on biodiversity through expansion of monoculture (single-species) forests and clearing of native vegetation for forest establishment.”

In the end, despite recommending some changes to the government’s Carbon Farming Initiative, Garnaut wants the transition of land use in a “comprehensive carbon pricing scheme” over the longer-term.