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October 8, 2011

Plant Forests, Save the World, Make a Profit

by Travis Marshall

For generations, native forests in Australia have been cleared at huge cost to the environment, but that trend could soon be reversed due to the initiative of CEO Andrew Grant and his company CO2 Australia.  With social awareness expanding rapidly on the dangers of climate change, Andrew Grant has found a way to not only plant vast tracts of forest to save the earth, but make a profit from it as well.

The concept is actually quite simple, where the company seeks out cleared land that used to be forested prior to 1990 (Kyoto rules), and pays the owner to use the land to grow large quantities of trees.  These trees are specially selected for the carbon sequestration characteristics, meaning they soak up carbon dioxide from the air and convert it into biomass such as wood, leaves and roots.  The company can then measure the amount of carbon the trees soak up and turn them into ‘carbon credits’ which can be sold on the market.

In particular, their studies have shown that the Mallee Eucalypt is especially suitable as it not only soaks up a large amount of carbon, but is also native to Australia so it is drought and fire tolerant, and supports a variety of biodiversity.  This is an ideal solution for companies that emit carbon, as they can purchase these credits and offset them against any liabilities they have to the government.  So far CO2 Australia has attracted some big names to offset their emissions including Qantas, Woodside Petroleum, Origin Energy and the City of Sydney, and their client base is rapidly expanding.

On Sunday, July the 10th, Prime Minister Julia Gillard announced plans for legislation that will see carbon have a starting price of $23 per tonne starting in July 2012 which will apply to the top 500 carbon emitting companies in Australia.  This legislation will rapidly expand the potential client base for CO2 Australia and may see their planting programs go into overdrive to meet the demand of new customers.

CO2 Australia also advocates a range of benefits other than soaking up carbon, including reducing the erosion of top soil and the risks of dry land salinity, creating new habitats that will enable the expansion of biodiversity, and the creation of microclimates that can improve the quality of adjacent farmland.  Some farmers have entered into the program to grow belts of trees (see image above) that act as wind breaks to protect their grazing or pastoral lands, and where they otherwise wouldn’t have been able to do it themselves.  One criticism of the business model is that it could potentially use land that would otherwise have been used in primary food production, but in reality many farmers use the trees to improve the quality and output of their land, or where the land is marginal for agriculture.

This is a simple but elegant business model that offers advantages for the environment, landowners and the economy and will result in potentially billions of trees being planted across our nation.  Entrepreneurs such as Andrew Grant should be applauded in their pioneering efforts for such an industry, and indeed he was nominated National Entrepreneur of the Year in 2010 in the Cleantech division.

Carbon sequestration farms are by no means the only solution to solving our future climate change issues, and many critics prefer to reduce carbon emissions in the first place rather than soaking them up in hindsight.  But in reality carbon emissions are likely to remain with us, therefore mitigating strategies such as this are vital.

CO2 Australia currently reports that they have planted approximately 16,500 hectares of forest and has a rapidly expanding portfolio across Australia.  Other companies such as Carbon Conscious are also entering into the forest sink market with 8,000 hectares already planted and another 20,000 planned in Western Australia.  This amounts to over 66 million trees between the two companies, and with an emissions trading scheme on the way, this trend is likely to accelerate.

This is a Grand Strategy that deserves our applause, and future generations will be thankful for a greener nation.


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