Carbon-credit schemes could achieve much greater biodiversity benefits by paying farmers more for projects that support native plants as well as storing carbon, according to research.
Modelling in Australia found that increasing the budget for carbon payments by 10% and targeting the additional money at areas important for biodiversity could deliver up to four times the conservation benefit of a scheme focused on securing carbon storage at the lowest cost.
The researchers found this could “significantly increase biodiversity benefits” without sacrificing carbon sequestration or economic returns.
Carbon-credit schemes pay landowners for taking action that reduces greenhouse-gas emissions or removes carbon dioxide from the atmosphere. One credit generally represents one tonne of carbon dioxide, or its equivalent, prevented from entering the atmosphere or captured and stored.
Businesses and governments can buy these credits to compensate for emissions produced elsewhere.
Farmers can generate credits through activities such as establishing woodland or allowing native vegetation to regrow. However, most schemes place a value on the amount of carbon stored, rather than the wider environmental benefits created.
This means a project offering cheap carbon storage may be favoured over one that costs slightly more but also restores important habitats or protects a wider range of species.
Comparing carbon and biodiversity benefits
Researchers from the University of South Australia, GreenCollar, the University of New England and the New South Wales Department of Primary Industries and Regional Development examined whether changing this approach could deliver better results.
Their study, published in the Australian Journal of Agricultural and Resource Economics, modelled carbon-farming projects across New South Wales, an Australian state covering more than 80 million hectares.
The team compared two ways of restoring native vegetation on farmland: Assisted natural regeneration, which involves removing pressures such as grazing, mechanical clearing or chemical control so native trees and other plants can regrow naturally, and environmental planting, which involves actively planting seedlings or sowing a mixture of native species on cleared land. It generally stores carbon more quickly but costs more because landowners must pay for plants, labour, establishment and maintenance.
For each approach, the researchers calculated the likely project costs, the agricultural income lost when land was taken out of production, potential carbon-credit revenue and the amount of carbon stored over 30 years.
They also assessed the importance of different locations for 8,159 native vascular plant species, enabling the model to identify areas offering greater potential for plant conservation.
Adding value to biodiversity
The researchers first modelled a carbon scheme designed to purchase as much carbon storage as possible at the lowest cost.
This broadly reflected Australia’s Emissions Reduction Fund, under which landowners could offer to deliver carbon savings and the government prioritised the cheapest eligible credits until the available funding was spent.
A second model increased the carbon-payment budget by 10%. Projects were then selected to maximise biodiversity benefits while delivering at least the same total carbon storage and financial return as the least-cost scheme.
The largest benefit was found for assisted natural regeneration under the most severe climate-change scenario. Its combined biodiversity score was four times higher than under the scheme focused on low-cost carbon storage.
The additional funding allowed the model to select more land in areas with greater conservation value. Although some sites stored less carbon per hectare, bringing more land into the scheme meant total carbon storage was maintained.
Climate changes the best locations
The most suitable locations for combined carbon and biodiversity projects also shifted under future climate conditions.
When the model prioritised low-cost carbon storage, assisted natural regeneration projects moved towards eastern New South Wales as climate change intensified.
When biodiversity was included, projects shifted westwards, where changing rainfall and temperatures were expected to make some areas increasingly important for plant conservation. Environmental planting projects showed a smaller shift towards the southwest and higher elevations.
The researchers said carbon-payment systems focused solely on emissions reductions risked creating “missed opportunities to achieve important biodiversity outcomes”.
However, the research was based on modelling rather than completed projects – it assumed financial return was the main influence on farmers’ decisions and only assessed plant biodiversity, rather than animals or the overall condition of habitats.
The findings suggest carbon markets could achieve broader environmental gains by offering higher-value credits to projects with verified biodiversity benefits, rather than treating every tonne of stored carbon as environmentally equivalent, the researchers hers concluded.
Key takeaways
- A 10% increase in carbon-payment budgets could deliver up to four times the biodiversity benefit.
- Projects could be targeted at land that supports native plant conservation as well as storing carbon.
- The model maintained overall carbon storage and financial returns by bringing more land into the scheme.
- The best locations for combined carbon and biodiversity projects are likely to shift as the climate changes.
- The findings are based on modelling in New South Wales, Australia, rather than completed farm projects.
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