Carbon Markets and their Implications for Natural Resource Management in Australia

Andrew Reeson

No 2009-09, Socio-Economics and the Environment in Discussion (SEED) Working Paper Series from CSIRO Sustainable Ecosystems

Abstract: Just as the world must adapt to climate change, it must also adapt to carbon markets. While some industries see carbon markets as a threat, many conservationists see a major opportunity. This paper considers implications of carbon markets for natural resource management (NRM) in Australia. There are in fact a range of distinct, but overlapping carbon markets. These range from international compliance markets (the Kyoto Protocol flexibility mechanisms) through national compliance markets (such as Australia’s proposed emissions trading scheme) to unregulated voluntary markets. While NRM is intimately linked to the global carbon cycle, it has a very limited role in existing and proposed carbon markets. The only significant direct impact likely up to 2015 is a small increase in tree planting. While trees have excellent potential to sequester carbon, the incentives for tree planting will be relatively small, given the limited scope of Australia’ proposed emissions reductions and the ability to import carbon credits from international markets. NRM managers should continue to manage carbon as one of a suite of issues without expecting rivers of gold to flow from carbon markets. Some may choose to participate directly in carbon markets, although this is inherently risky given their ill-defined and rapidly evolving nature. There is a need to develop improved understanding of carbon stocks and flows in the landscape, at both national and local scales. New institutions will be needed to secure carbon opportunities from agriculture and land management while also recognising other social and environmental objectives.

Keywords: carbon trading; emissions trading; environment; agriculture (search for similar items in EconPapers)
JEL-codes: Q50 Q52 Q54 Q57 Q58 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2009-06
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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