Carbon AND biodiversityThere's been much discussion recently about carbon farming: paying farmers to plant trees on their farm to sequester carbon. This could also be a boon for biodiversity and the environment and provide an alternative source of income in marginal agricultural areas. However, studies in recent years suggest that focusing on carbon is unlikely to give the most biodiversity bang for our buck.

To better achieve biodiversity benefits from carbon payments a mix of regulation, targeting, levies and incentive payments could be used. But what policy mix will deliver the best outcomes for both carbon and biodiversity? This was the question posed at a CEED/NERP workshop and a group of CSIRO and CEED researchers have come up with some interesting results.

The researchers evaluated 14 policy options for supplying carbon and biodiversity through carbon farming in Australia. They found that payment design is paramount, with substantial gains made by putting it to auction, and paying farmers differing amounts depending on their expected costs.

Without regulating plantings to ensure they are biodiversity friendly (i.e. include diverse species), it is likely that monoculture plantations will dominate. But straight out regulation, while great for biodiversity, wouldn't be so great for achieving carbon objectives.

Interestingly, paying farmers a premium to adjust their plantings to increase the biodiversity benefit is not as efficient as applying a levy on carbon plantings; and using the funds raised to encourage plantings that will deliver greater biodiversity benefits elsewhere. But while a levy was better than a biodiversity premium, researchers found an even better option.

They found a case of "less is more". It turns out that the best type of policy would pay farmers to cover the costs of their plantings through auction, and target areas for both carbon and biodiversity outcomes. Such a design has the best chance of cost-effectively and efficiently delivering both carbon and biodiversity outcomes, giving over 100 times the biodiversity benefits of a simple, carbon-focussed policy.

Nevertheless, mitigating the impacts of climate change and reversing the decline of biodiversity ultimately rests on society to make choices about the amount of carbon and biodiversity co-benefits desired, and the price it is prepared to pay to for this.

Reference

Bryan B.A., Runting R.K., Capon T., Perring M.P., Cunningham S., Kragt M.E., Nolan M., Law E.A., Renwick A., Eber S., Christian R. & Wilson K.A. In Press (accepted 14th August 2015). Designer policy for carbon and biodiversity co-benefits under global change. Nature Climate Change

Image: Establishing native trees on agricultural land can yield both carbon and biodiversity benefits. CSIRO and CEED researchers have examined what policy settings will deliver the greatest returns in both. (Photo by David Salt)