NEW SOUTH WALES — The Albanese government has approved a regulatory change allowing state governments to generate carbon credits by storing carbon dioxide in native forests located on public land. This change enables the New South Wales government to establish a new 176,000-hectare national park near Coffs Harbour.

The New South Wales government expects to receive hundreds of millions of dollars for the protection of these native forests, which were previously designated for logging. New South Wales Labor stated on September 1, 2024, that the park is intended to protect old-growth forests, at least 12,000 koalas, and more than 100 other threatened species.

New South Wales environment minister Penny Sharpe said the carbon credit revenue would create diversified revenue streams and generate 100 new jobs within the national park. The New South Wales government plans to register its carbon project with the federal Clean Energy Regulator.

The Wilderness Society expressed opposition to the regulatory change, arguing that it would allow large emitters to continue polluting. Christine Milne, patron of the Bob Brown Foundation, characterized the carbon credits as lacking integrity. Milne added that the New South Wales Labor government had retrofitted an election promise by making it conditional on creating offsets for polluting industry.

The Australian Forest Products Association accused the government of prioritizing politics over science regarding this decision. The association stated that the method did not meet requirements for integrity, transparency, or additionality. Assistant climate change minister Josh Wilson said the Albanese government had no plans to end logging. Wilson stated that using carbon credit revenue to protect forests represented a voluntary option for state governments to diversify their regional economies.

Why It Matters

This regulatory change introduces a new mechanism for states to fund conservation efforts through carbon credits. Each carbon credit represents one kilogram of emissions prevented or removed from the atmosphere. Polluting companies are permitted to purchase an unlimited number of these credits to account for their own emissions reductions. Under carbon accounting rules, credits can only be created if they represent an additional emissions reduction. The final design of the carbon credit method aims to prevent increased forestry elsewhere by reducing and capping the amount of logging allowed as carbon credits are issued.

New South Wales Labor had first promised a koala park more than a decade ago while in opposition. The establishment of this national park is a development for the state, which will use the carbon credit system to monetize the environmental protection of an area important for biodiversity.