Environmental markets in Mossman

Our department, James Cook University (JCU), and Griffith University collaborated on research to investigate whether environmental markets could provide diversified income for landholders in Mossman.

Environmental markets enable landholders to earn additional income through projects that help to improve, restore and/or protect parts of their natural environment and the benefits they provide. This is part of our ongoing agriculture research and support for canegrowers in the Mossman region, following the closure of the sugar mill servicing the region.

About the project

The joint project assessed the feasibility of environmental market-based mechanisms as an income source for farmers in the Mossman district.

Researchers from JCU and Griffith University collaborated with us to:

• review environmental market options for Mossman landholders
• undertake economic assessments on case study sites
• explore different scenarios to help understand the financial viability of different market options
• interview landholders in the district.

The project assessed changing land use on a parcel of land within a property, such as a low productivity area, whilst agricultural production continues elsewhere on that property. The project did not explore the economic viability of markets that apply to cropped land, such as soil carbon.

Key findings

Environmental market schemes typically involve land use change, restoration and/or management actions undertaken in accordance with scientifically accredited methods.

These yield a measurable unit of an environmental benefit, such as:

• carbon captured or not released (carbon credits via the Australian Carbon Credits Unit scheme)
• reduced dissolved inorganic nitrogen flowing to the Great Barrier Reef (Reef Credits scheme)
• improved rainforest (biodiversity credits – emerging schemes).

Environmental markets put a dollar value on these benefits, which are then bought, sold, or traded in a market.

Landholders

Environmental market projects are only available to landholders. People leasing land are not eligible.

Landholders could be eligible to earn income from environmental market projects on low productivity or marginal agricultural land, whilst continuing cropping or other use on the other, more productive parts of their land.

Financial viability

Using the information available at the time of publication, the assessment found that environmental market projects utilising just one method (i.e. green or blue carbon) were not profitable. However, projects where multiple methods could be used on the one property, called ‘stacking’, are more financially viable. Aggregating sites across different properties might also help improve the viability of environmental market projects.

Project sites and profitability are highly site and context-specific, and upfront costs and financial returns from selling credits can vary significantly.

Due to limited available information for the Wet Tropics region, a range of different restoration methods or land uses, such as farm forestry, were not explored in the report. Environmental market projects would be more viable if the upfront costs, such as planting, could be minimised.

More local projects documenting all restoration and administration costs are needed.

Awareness

Landholders in Mossman generally had limited understanding of environmental market options.

The identified barriers included perceptions that:

• market projects would not be economically viable compared to sugarcane production
• there would be onerous and costly administrative requirements and contractual commitments
• there would be an impact on land value.

Next steps

We are working with our department's local extension, Terrain NRM and allied regional stakeholders to share information for landholders:

• improve awareness of the different environmental market options in Mossman
• understand the potential economic feasibility of different environmental market options
• know how environmental markets work and what is involved in an environmental market project, including costs, timeframes, risks, reporting and other commitments
• know where to go for more information.

Read the report

The Feasibility of environmental market-based mechanisms as an income source for farmers in the Mossman district report includes:

• information on existing and emerging environmental market options in Mossman
• detailed steps, costs and approximate timeframes associated with environmental market projects
• landholder attitudes and perceived barriers to environmental markets
• three case studies detailing the economic feasibility of environmental market projects.

Contact

Contact us online, by phone or in person.