Carbon farming 

Part 7

Do the economics stack up?

In a time where the future of rural SA looks tentative, then visionary and bold thinking is needed. It is not in the scope of this series to outline the cost-benefits of landscape-scale change from revegetation. There are many reports in the public domain that countenance such propositions.

I have already mentioned the potential of about $1bn annually from just participating in a carbon market. 

Now consider the economic benefits of an oil mallee industry. From the WA experience, there is very good scope for SA - remember, most of the cleared farmland has occurred in mallee country. 

But there’s a lot of catching up to do. 

WA has years of oil mallee research, growing, and processing experience, and the fledgling industry there has attracted the interest of Virgin Airlines  for the production of biofuel. 

There is no time to waste about the opportunities in oil mallee. All the research, potential, and opportunities have already been conducted on oil mallee biofuel and biochar production. 

One of the greatest vagaries of agriculture is drought, and even in such times, there would always be the potential for farm income from planted vegetation assets. Farmers can limit their exposure to drought, and also to global commodity prices, by participating in a global carbon market.

Drought in South Australia should never be the enemy that it always is.

Start-up funding

A bold new policy initiative requires some lateral thinking. And so, here are some funding ideas.

   The state government to provide initial seed capital of $3m to each of the eight NRM Boards for carbon sequestration and biodiversity plantings. The total amount of $24m is a very small investment to protect and support $4bn+ annual gross agricultural product. (The investment is just 0.6%).

   Seek partnerships with local authorities about carbon farming projects (my own Council already has committed to plant 1 million indigenous plants by 2020).

   Forge partnerships with Department of Planning, Transport, and Infrastructure for the establishment of roadside carbon farming projects. There is a very large roadside land bank awaiting revegetation. It is strange that many areas along main roads that are subjected to cropping are in agricultural crop land that is so devoid of native vegetation. 

   Form community co-operatives whose members contribute funds for purchase of shares to create biodiversity and carbon sequestration plantings.

   Introduce a special levy (say $20 per property annually) within the NRM levy framework. These funds would be used for revegetation work only.

   Seek philanthropic funding. This could be done through the auspices of NRM Boards, and it might be surprising what arises.

   Examine the potential for crowd-funding (it seems to work in some other “popular” areas).

   Seek joint venture partners with corporations who are already participating in the voluntary carbon market. (I know of at least one major bank that has purchased off-shore carbon credits).

   Farmers organisations and farmers themselves must be involved and it would be expected that  they would forge joint venture partnerships with community co-operatives, or NRM Boards, or with corporations, with agri-businesses (after all, these agri-businesses would have an important vested interest in the outcomes).

It will be noticed that no reference has been made of federal government involvement, and this is intentional. The response in 2014 from the federal government to global climate change responsibilities is disappointing. 

A government that prioritises the provision of the feedstock (i.e. black coal) to greenhouse gas emissions, further imperiling Earth's climate and the human race, that ignores the best available science on climate change scenarios (vis-a-vis IPCC Report 5 ), also puts at high risk those regions of Australia that are predicted to suffer the most. This includes South Australia.

So, this is a state issue, and one that can be addressed by the SA community. This is adaptation and resilience at the core.

Controversial or Common-sense?

There is one further aspect about funding that needs to be countenanced. Mining royalties.

Western Australia has a Royalties for Regions program, and I am aware of interest in the South Australian parliament last year about a similar scheme. I saw widespread evidence of the benefits of the RFR during travels through WA in 2012. 

A scheme similar to this to provide consistent and on-going funding for a landscape repair, revegetation, and carbon sequestration program would produce significant economic returns. 

SA is expected to receive $225 in mining royalties in 2013-14 (ref GST Review). Previous years’ royalty income was around $220m-$230m. 

Just 10% of this sum ($23m) would be almost sufficient to provide the seed funding as mentioned above. 

And 10% annually could then be used by the regions to further develop new crop opportunities (e.g. oil mallee and biofuels) and associated activities in revegetation. 

 A “Regional Investment Program”? Now, there’s an answer. Just 10% investment from mining royalties. Imagine what a 20% royalty dividend would produce!

Now to rounding it all off - see Part 8, the Conclusion

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