Authors: Alchin, M; Braimbridge, M; Jasper, D; Hay, B; Lacy, H

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Alchin, M, Braimbridge, M, Jasper, D, Hay, B & Lacy, H 2011, 'Commercialisation of rangeland carbon offsets by resource companies', in Y Potvin (ed.), Strategic versus Tactical 2011: Proceedings of the Fourth International Seminar on Strategic versus Tactical Approaches in Mining, Australian Centre for Geomechanics, Perth, pp. 205-210,

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Resource companies have an opportunity to make a major contribution to the rehabilitation of the Australian rangelands through the commercialisation of carbon offsets. Development of carbon offset projects in the rangelands could have a tangible impact on the legacy load of greenhouse gas emissions and thereby mitigate the potential adverse effects of climate change. Carbon offset projects implemented by resource companies can also deliver significant socio-economic and environmental co-benefits in regional and remote Australia. The CSIRO conservatively estimates that offsets generated by rehabilitation and reforestation of Australia’s overgrazed rangelands and the implementation of controlled savanna burning would be equivalent to the abatement of approximately 19% of Australia’s total greenhouse gas emissions (CSIRO, 2009). The carbon offsets created by these activities in the Australian rangelands could generate in excess of AU$ 2.2 billion per annum. This revenue would continue to be generated until the maximum sequestration potential of the rangelands is reached (i.e. the condition of the land reaches its climax ecological state). A carbon offset represents a reduction in greenhouse gases, or enhancement of greenhouse gas removal from the atmosphere by sinks, relative to a ‘business-as-usual’ baseline. Carbon offsets are tradeable and often used to negate (offset) all or part of a company’s emissions. To be eligible as an offset, they must fulfil certain criteria, including: additionality, measurability, transparency, permanency, ownership and verifiability. It is possible that Australia will adopt some form of mandatory carbon pricing in the future. Hence, there is a growing impetus for resource companies to implement sustainability strategies which can adapt to the financial liabilities associated with carbon pricing. Many resource companies control large tracts of land, typically to maintain access to their project area/s. The commercial benefit of owning or leasing this land could be enhanced if it was used to establish a carbon offset project. The credits created by the offset project could partially or completely offset the emissions produced by the resource operations. If Australia adopts a carbon tax it is possible that the offset credits could be used to obtain a rebate on any financial liability the resource company may incur. This paper briefly outlines the strategic opportunity for resource companies to capitalise on their existing land assets and potentially derive significant benefits for their shareholders, relevant stakeholders and the environment. It provides some specific examples of eligible carbon offset management options in the rangelands. Finally, the paper discusses the opportunities and major risks associated with the commercialisation of carbon offsets in the Australian rangelands.

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