Re-evaluating land use choices to incorporate carbon values: a case study in the South Burnett region of Queensland, Australia

Abstract

[Abstract]: Land use change from forest to non-forest use is a major source of greenhouse gases in Australia. From 1996, the Queensland Government provided incentives for landholders to plant ex-pasture and cropping areas with hardwood plantations through the Southeast Queensland Regional Forest Agreement program. Spotted gum (Corymbia citriodora subspecies Variegata) was a target hardwood species for Southeast Queensland (SEQ); however, the long-term viability of timber-alone plantations relative to cropping and livestock production, in the medium to low rainfall areas of SEQ, and elsewhere in Australia, is questionable. Carbon credits resulting from additional carbon sequestration may change the relative profitability of these land uses. The aim of this research was to compare spotted gum plantations with peanut-maize cultivation and beef pasture in low rainfall areas, incorporating carbon values. This study covers all variable costs and benefits, and different sources and sinks of three major greenhouse gases: carbon dioxide, methane and nitrous oxide. For the case study of three land use systems (maize-peanut cropping, pasture, and spotted gum plantations in the Kingaroy district of SEQ), production, carbon sequestration and emissions data were supplemented by formal and informal interviews with landholders, agronomists, sawmill staff and government extension personnel. Forest inventory, biomass and soil sampling, and stakeholder interviews were used as sources of primary data. The costs and benefits of all land use systems were converted into monetary terms and discounted to produce net present values. If the comparison of net present values is limited to traditional benefits (i.e. income from crops and hay in cultivation, beef in pasture and timber in plantation), cultivation is the most profitable option, followed by pasture and plantations. Even after the inclusion of beef value, plantations could not compete with other land use systems. After the inclusion of greenhouse gas value, plantations were the most profitable option, followed by pasture and cultivation. However, if the carbon price was reduced from the price assumed in this thesis of $10.5 t-1CO2e to $4.3 t-1CO2e, cultivation would remain the most profitable option. If the currently used nominal (pre-text) discount rate (six percent) increased to seven or eight percent, the optimal rotation of plantation would reduce from 34 to 31 years and 29 years, respectively. At a seven percent discount rate, plantations would be a less profitable than pasture, but marginally more profitable than cultivation. If the discount rate were eight percent, plantations would be less profitable than both pasture and cultivation. These findings have some implications for attempts to increase the plantation estate to three million hectares by 2020, through policy frameworks such as the Australian Government’s ‘Vision 2020’. Therefore, this study has recommended several measures to increase the benefits from plantations.