Re g i o n a l cas e s tudy
A natural investment Large scale restoration of wildlife habitat can deliver strong economic benefits to rural Victoria Improve the environment Reduce emissions And provide rural job opportunities Solving the biodiversity crisis with carbon delivers economic opportunities Investment in large scale restoration of habitat can cover its cost by sale of carbon and maintain and diversify regional economic activity. This would enable potential payments to landholders for management of plantings and carbon storage, as well as the capacity to purchase land or secure access to land in perpetuity.
The problems Victoria’s natural environment and biodiversity are under serious stress. More than half our native vegetation has been cleared1, and 44% of our native plants and 30% of our native animals are threatened
“The time for business as usual is over and the need for action to stem ecological decline is urgent. Restoration needs to be statewide, broad-scale and well coordinated, with strong participation from both public and private sectors.” – Sir Gus Nossal or extinct2. Unfortunately, evidence shows that the condition of Victoria’s land and biodiversity is continuing to decline3,4. Four of the five most heavily cleared bioregions in Australia are in western Victoria4, which also has the highest number of threatened species per region5, so there is an urgent need for action. Climate change is adding to the pressures on our native species1 and is a major challenge on numerous other fronts.
Photo courtesy of Mark Coulson, 5th World Conference of Science Journalists
The Natural Investment Project – A Regional Development Case Study assessed the investment needed to deliver 255,000 hectares of plantings for biodiversity and carbon on private land over 30 years, the revenue returned from the sale of the carbon in these plantings, and the jobs that flow from this work. The study was commissioned by the Victoria Naturally Alliance and undertaken by URS economic consultants. The case study focuses on one section of the very large Habitat 141 landscape restoration project, which stretches from the outback to the ocean, straddling the 141st longitudinal line that is the border between Victoria and South Australia. The actual case study area encompasses the agricultural areas in Victoria that are south of the Big Desert, west of the Grampians, and south to the coast between Portland and the border.
A natural investment delivers • Major increases in wildlife habitat, reduction in threatened species, increase in ecological resilience. • Increase in ecosystem services. • Significant reduction in greenhouse gas emissions. • Diversified regional economies and strengthened rural communities. • Diversified income stream for landholders.
Below: Max Skeen was part of the initial planning for the Hindmarsh Landcare Network. Photo: David Fletcher
Habitat 141, a bold vision to restore the natural environment From north of the Murray River, stretching down through Victoria’s Murray-Sunset National Park and all the way south to the coast, Habitat 141 – Connecting the Outback to the Ocean, is a very big endeavour. Habitat 141’s vision is to restore habitat, wildlife and ecosystem services by restoring bushlands and reconnecting the landscapes that straddle the 141st longitudinal line – the Victoria/SA border – in a way that integrates with other land uses, including agriculture. Much of the landscape has been dramatically altered since European settlement, and now four of the five most heavily cleared bioregions in Australia are found in western Victoria5, which also has a high concentration of threatened species. Brett Hedger is one of 15 volunteers who have been honoured for their dedicated commitment to Project Hindmarsh planting weekends. Photo: John Sampson
For example, large stretches of grasslands and grassy woodlands, important habitat for threatened species like the Red-tailed Black-
Greening Australia’s Ron Dodds. Cockatoo and Bush Stone-curlew, have been heavily cleared for cropping. In the Wimmera region, less than 3% of original Buloke Grassy Woodlands remains, making it one of Australia’s most endangered ecosystems. Active participants in Habitat 141 include community groups, large NGOs, industry, and federal, state and regional government agencies. The shared vision is “to work with communities to conserve, restore and connect habitats for plants and wildlife on a landscape scale from the ocean to the outback”.
THE CASE STUDY: Habitat 141 over 30 years
Economic models predict job opportunities and profitable carbon farming from restoration activities Achieving the 30 year restoration targets for Habitat 141 would deliver job opportunities and profitable carbon farming, according to the economic evaluation and supporting models. URS economists did a regional economic impact assessment modelling the impact of achieving the targets for restoration and carbon storage on private land, the revenue from the carbon storage and on the regional economy, including jobs, over the next 30 years. The study area included the sections of Habitat 141 south of the Big Desert. The model was constructed so that the existing agricultural land-uses for a given area of land formed the base case (business-as-usual) against which expenditures and revenues for restoration were compared. In essence, this comparison involved determining the loss of income from agriculture relative to the income from the storage of carbon. It also involved estimating the respective value of purchased inputs for agriculture and restoration, which are major drivers of local employment. Impacts on direct and indirect employment were estimated using a regional InputOutput matrix.
How much land for carbon and restoration? The targets6 for restoration and carbon in the case study area are: •1 50,000 hectares for “biocarbon” plantings, which are plantings for biodiversity in which the carbon to
Some two million trees and shrubs have already been planted in the Wimmera as part of Project Hindmarsh, the project that got Habitat 141 off the ground.
be stored in the trees is available for carbon trading; all plantings are on farmland. • 62,000 hectares of biodiversity plantings that don’t include carbon for trading; all plantings on farmland. • In addition, 43,000 hectares of “landcare” plantings for biodiversity is proposed for land that is not currently suitable for farming; the ‘back paddocks’. TOTAL area for restoration and carbon is 255,000 hectares, of which 212,000 hectares is on land that is currently farmed.
What investment is needed to achieve the targets? For restoration and carbon of the total 255,000 hectares the estimated cost6 is $333 million over 30 years or an average of $11 million per year. To provide security over the long term for the plantings (including carbon) on
the 212,000 hectares of farming land, landowners need to be paid enough to make this choice economically viable and to compensate the present landowner for the loss of income from agriculture. Based on current values for agricultural land, this cost is estimated at $114 million over the 30 years. Total investment needed to achieve secure long term outcomes for restoration and carbon is $447 million.
What are the returns on this investment? 1. Carbon The estimated revenue from sale of carbon from the 150,000 hectares of biocarbon plantings is $176 million at a constant price of $25 per tonne over the 30 years. However, based on the estimates of the Australian Treasury the price of carbon could rise to between $35 and $50 per tonne by 2020, and between $115 and $158 per tonne by 20507.
Habitat 141 will eventually reconnect the extensive heathlands and mallee bushland of the MurraySunset, Big Desert, Wyperfeld and Little Desert national parks.
l Mildura
l Horsham
l Hamilton l Portland
Habitat 141: Comparison of revenue vs expenses $ millions
At approximately $60 per tonne for carbon the full cost of the total restoration is covered. This price is likely in less than 20 years according to Australian Treasury figures.
2. Regional economic activity would be diversified and maintained
3. Unpriced benefits The value of unpriced benefits will more than cover the cost of restoration. Such benefits include ecosystem services such as water purification, pollination and pest management, and improved agricultural production8. Landscape amenity and tourism will also benefit. And importantly, the capacity of the natural environment to be resilient in the face of climate change will increase. There is a trend internationally to put a value on the services nature provides. One such study published in the prestigious international journal Nature found that, each year, global environmental services are worth $33 trillion9. For Victoria, it has been estimated that the natural environment underpins industries worth over $10 billion per year1.
Total cost $447m Securing land for restoration $114m
Carbon revenue projected at $60/t
Restoration cost $333m
Carbon revenue at $25/t, $176m years
2020
2030
2040
Habitat 141: Changes in agricultural land use (ha) in case study area Area (ha)
The carbon and restoration activities make up for any loss in employment that comes from a reduction in conventional agricultural production. In fact, according to the model, these activities would provide 37 more jobs over 30 years than if the 255,000 hectares stayed as current agricultural production. These new jobs include seed collecting, sorting and treating, planting and direct seeding, site preparation, fencing and ongoing management, planning and research.
500 450 400 350 300 250 200 150 100 50 0 2010
2,100,000 ha total private land
2,000,000 1,500,000 1,000,000 years
500,000
212,000 ha biodiversity & carbon
0 2010
2020
2030
4. Diversification of farming revenue Carbon farming and biodiversity restoration and management are both new sources of revenue for landholders. On the carbon front Australian Treasury modelling (see above) predicts that the restoration program (150,000 ha) would start to pay for itself by 2020 with the whole program becoming profitable between 2020 and 2030. These prices for carbon are
2040
expected to be well and truly surpassed by 2050, which would make carbon a more profitable venture than the displaced current agricultural production in many situations. Thus, the revenue from carbon is likely to be sufficient to meet the investment criteria required to effect a change in land use from agriculture to native vegetation and carbon.
Contact details Karen Alexander Victoria Naturally Alliance Project Leader Phone: 03 9347 5188 Email: info@victorianaturally.org.au Web: www.victorianaturally.org.au • The full report is available from www.victorianaturally.org.au. • Keep up with biodiversity issues in Victoria, subscribe to the Victoria Naturally Alliance monthly ebulletin via our website or email info@victorianaturally.org.au. All photos used in this report, except for the photo on page 2 of Brett Hedger, were taken by David Fletcher for the book Project Hindmarsh, 10 Years and Beyond.
So, what needs to be done? Serious consideration of this opportunity by governments, businesses and environment organisations, is essential 1. B y one action we can address both the climate crisis and the biodiversity crisis by delivering biodiverse and biocarbon plantings. This is a win-winwin for environment, economy and communities. 2. A t $60/tonne carbon would cover the cost of restoration over 30 years. Australian Treasury7 modelling says this price is likely sometime between 2020 and 2030. 3. R estoration activities that include carbon revenue can provide a viable income stream for landholders and hence the ability and incentive to purchase land for restoration and native vegetation. 4. R egional economic activity would be diversified and maintained with the restoration activities making up for any loss that comes from reduction of agricultural land. In fact the restoration activities, according to the model, would provide 37 more jobs than if the 255,000 hectares stayed as agricultural production. This is contrary to often held beliefs that restoring habitat would lead to a loss of jobs and poor economic outcomes. 5. T he value of multiple unpriced benefits would well and truly overwhelm the cost of restoration. Unpriced benefits include ecosystem services such as water purification, pollination and pest management, as well as increased ecosystem
resilience, improved biodiversity and conservation outcomes, and improved landscape amenity and tourism.
Government policies support regional development vision Large scale habitat restoration projects are consistent with directions in a range of existing government policies, including the Victorian Government’s 2009 White Paper10 on land and biodiversity in which one of the key actions is the implementation of regional “biolinks”. Biolinks are networks of large wildlife corridors linking up bushland and providing vital linkages to give species room to move as the climate changes. As the White Paper states, to achieve this “will require a significant increase in shared investment, action and cooperation over the next 50 years or more” (DSE 2009, p 15). The Victorian Government’s 2010 Action Plan for Green Jobs and Regional Development, and the Climate Change White Paper also support this long term vision. Relevant federal policies include Australia’s national biodiversity strategy, climate change policies, and the Caring for our Country business plan. These clearly stated federal and state government strategies are yet to be supported by adequate government funding.
What is needed? A federal rescue package of at least an extra $1 billion per year is required for our life support systems and to build ecosystem resilience to climate change and secure carbon stores. National and state plans are also needed to restore and reconnect habitats as well as secure and sequester carbon. In Victoria, to further develop large scale habitat restoration and to secure and sequester carbon, the Victoria Naturally Alliance recommends that the Victorian Government establishes a Regional Resilience Environment Program with: • $1.5 million to develop a consolidated prospectus and funding delivery model for large scale habitat restoration, including securing of carbon. • $5 million over four years for community capacity building and volunteer recruitment to support the ongoing contribution of communitybased conservation groups11. • A $20 million revolving fund to be administered by Trust for Nature to purchase, restore and on-sell key high conservation value properties. • $500 million funding over the next 10 years for large scale habitat restoration projects across Victoria. • Industry development support program for the growing ‘restoration industry’ of $5 million over next four years.
The Victoria Naturally Alliance is a coalition of environment groups that want to see concerted action taken to protect Victoria’s biodiversity from a range of threats including climate change, habitat fragmentation and species extinction. We are working to build community support and awareness of the threats and solutions facing Victoria’s native plants and wildlife, especially in light of the increased pressures climate change is putting on our natural world. PANTONE 383 U PANTONE 462 U
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Background notes In Victoria 44% of native plants and 30% of animals are threatened species2 Much of the decline in Victoria’s natural environment and biodiversity is the result of past land-use decisions, which involved the large-scale clearing of native vegetation. As a result nearly 80% of Victoria’s landscapes are fragmented with isolated patches of native bush surrounded by seas of farmland12. While patches of remnant bush offer some sanctuary for threatened species, they are often degraded and can only sustain smaller populations of plants and animals, making them increasingly vulnerable to extinction. Restoring a network of wildlife corridors along rivers, creeks, roadsides and on private land will provide much needed habitat, and enable species to move throughout the landscape again.
Rebuilding our ecological infrastructure In the same way that we currently invest in infrastructure such as roads and hospitals, we need to invest in maintaining and building Victoria’s ecological infrastructure. The cost of building ecological infrastructure in Habitat 141 in this study is considerably less than the state and national budgets for built infrastructure. For example, the first stage of redevelopment of the tennis centre at Melbourne Park will cost $363 million13. Current upgrading of the Monash Freeway is costing $1.4 billion, and the 27 km Peninsula Link freeway will cost $759 million. A proposed Melbourne metropolitan rail tunnel is projected to cost more than $4.5 billion14.
How much carbon is stored? The carbon plantings result in storage of an additional 18 million tonnes of carbon over 30 years (this is equivalent to taking 4.5 million cars off the road in one year).
This is about 0.5% of Victorian carbon emissions over the next 30 years at current emission rates. Given that Victoria has a target of 20% reduction by 2020, plantings in Habitat 141 alone would achieve almost 1/40th of the target as well as delivering a host of other benefits. Note that most of the carbon is stored after year 15 and continues to accumulate beyond the 30 year period modelled.
What is the cost of reducing emissions by taking up carbon in trees versus reducing emissions by other methods? In this study the carbon storage through planting costs $19 per tonne. This is a moderate cost for reducing emissions, when compared to reductions in the power generation sector, many of which cost between $40 and $100 per tonne15.
Endnotes 1 DSE 2008, Land and biodiversity at a time of climate change Green Paper. 2 Dunlop, M., F. Poldy, & G. Turner (2004) Environmental sustainability issues analysis for Victoria. Report by CSIRO. 3 Victorian Catchment Management Council (2007) Catchment condition report 2007. 4 Commissioner for Environmental Sustainability 2008, Victoria 2008 State of the Environment Report. 5 National Land and Water Resources Audit (2002) Australian Terrestrial Biodiversity Assessment 2002. 5 National Land and Water Resources Audit (2002) Australian Terrestrial Biodiversity Assessment 2002. 6 Target figures are from Greening Australia Victoria. 7 Commonwealth of Australia 2008, Australia’s low pollution future, the economics of climate change mitigation, Summary. 8 Bird, P.R., Bicknell, D., Bulman, S.J.A., Burke, J.F., Leys, J.F., Parker, J.N., Sommen F.J., and Voller, P. (1992) The role of shelter in Australia for protecting soils, plants and livestock. Agroforestry Systems 20, 59-86, doi: 10.1007/ BF00055305 Lockwood, M. and Walpole, S., Miles, C. (2000) Economics of Remnant Native Vegetation Conservation on Private Property. National Research and Development Program on Rehabilitation, Conservation and Management of Remnant Vegetation. Research Report 2/00 LWRRDC.
9 Costanza, R., d’Arge, R., Groot, R. de, Farber, S., Grasso, M., Hannon, B., Limburg, K., Naeem, S., O’Neill, R.V., Paruelo, J., Raskin, R.G., Sutton, P., Belt, M. van den (1997) The Value of the World’s Ecosystem Services and Natural Capital, Nature, vol. 387, 15 May. 10 DSE, 2009, Securing our Natural Future. A white paper for land and biodiversity at a time of climate change. DSE Melbourne. 11 Ready for Tomorrow, The Victorian Government’s regional development blueprint includes $9.9 million to strengthen landcare. Additional funding is needed to strengthen other community groups. 12 VEAC 2010, Remnant Native Vegetation Investigation Discussion Paper. 13 Source: http://www.majorprojects.vic.gov.au/our-projects/our-currentprojects/melbourne-park. 14 http://www.transport.vic.gov.au/web23/home.nsf/headingpagesdisplay/ projects. 15 Source: Climate Works Australia, Low Carbon Growth Plan for Australia, March 2010.
The Victoria Naturally Alliance thanks the John T Reid Charitable Trusts for their generous support for this project. Thanks also to Paul Koch and Dale Tonkinson from Greening Australia Victoria and Andrew Bradey from the Kowree Farm Tree Group for making this case study possible. For oversight of the project many thanks to the Advisory Committee. We also thank The Ian Potter Foundation and the Helen Macpherson Smith Trust PANTONEfor 383 U their support of the alliance. PANTONE 462 U
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