Tapping the carbon market of northern Australia could provide a valuable new revenue stream for the region – once key obstacles are removed, according to a government report.
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Reduced greenhouse gas emissions from fire and livestock, sequestering carbon in soils and vegetation, and the production of renewable feedstock for aviation biofuel are three of the main opportunities identified in The Emerging Carbon Economy for Northern Australia report.
"These opportunities will provide northern farmers the potential to reap a billion-dollar return," Regional Australia Minister Simon Crean said.
"CSIRO found the benefits of the carbon economy will not be confined to climate change action, but could generate environmental and livelihood benefits," he said.
The region covers some 300 million hectares north of the Tropic of Capricorn. Mr Crean said the federal government would work with state and local governments to help regions "embrace the carbon economy" by generating credits that they can sell to big emitters under its carbon market.
While the report identifies possible areas of income generation – such as a potential of $200 million dollars a year in abatement of carbon emissions through better savannah-burning management and $240 million from the livestock industry – it also specifies how much work still needs to be done.
For instance, the property rights to carbon would need clear ownership rules, while the scale of carbon stocks in the soil and its potential enhancement "warrant continued scientific enquiry", the report said.
Similarly, while indigenous groups have been able to earn carbon credits for savannah-burning under the government's Carbon Farming Initiative (CFI), the report found "practical barriers to wider implementation of this method remain".
Likewise, the government is yet to approve a methodology allowing farmers to earn credits under the CFI for methane abatement efforts in the livestock industry. The northern beef herd counts some 13 million animals.
The biofuel potential could amount to 5 per cent of the jetfuel use in Australia, although that assessment also is based on "early stages of investigation", the report said.
The Coalition has vowed to scrap the carbon tax and planned emissions trading market if it wins office, although it has signalled it may continue with some of the government's carbon farming program.
