The integration of biodiversity and climate change: A contextual assessment of the carbon farming initiative

Abstract

Summary The Carbon Farming Initiative (CFI) allows the creation of tradable Australian Carbon Credit Units (ACCUs) derived from across the ecosystem sector via project‐level baseline and credit activities: it is the first national offset scheme in the world to broadly include farming and forestry projects. Because these activities have the potential to produce both biodiversity and climate change benefits, a crucial outcome is for widespread uptake of the policy. However, the design, complexity and cost of the CFI project development process, and low prices as a result of ACCUs trading in the voluntary market, will all likely militate against this. This article shows how international politics and policy surrounding the Kyoto Protocol have influenced the design of the CFI, with its potential to proliferate complex and narrow methodologies and counter‐productive approaches to integrity standards such as permanence. The article shows that despite the pressing need to integrate biodiversity and climate change considerations as equally important challenges, their global integration remains poorly articulated. Biodiversity considerations are also not integrated into the CFI but, rather, are dealt with indirectly through safeguard measures that avoid perverse incentives and unintended harm, and as an optional co‐benefit via the development of an index. This article suggests that we need to move past the shackles of Kyoto towards streamlined and standardized approaches such as risk‐based assessments and the use of regional baselines. Using regionally specific baselines such as for avoided deforestation would allow landholders to opt‐in to regional‐scale mitigation opportunities. Activities that Australia accounts for, such as reforestation and deforestation, should also be able to opt‐in for coverage under the Clean Energy Act (and out of the voluntary carbon market) to obtain a secure price.