Environmental integrity of forest offsets in a changing climate: embedding future climate in Australia’s sinks policy regime

Abstract

Forest carbon sinks are important to Australia’s climate policy, and recent government and business net zero commitments will likely increase demand for forest carbon offsets. At the same time, forests in parts of the country have suffered from prolonged drought and bushfires, and a growing body of research suggests that future climate change could have significant implications for forest carbon sinks’ permanence. This article draws on expert views to explore how incorporating knowledge on the physical risks from climate change can strengthen the environmental integrity of Australia’s forest sinks policy. It finds challenges to and opportunities for strengthening the science, policy, and practice interfaces for forest carbon in a changing climate, and proposes reforms to strengthen the capacity of forests to be a long-term contributor to Australia’s emission targets and climate adaptation policy. These reforms may have relevance to other countries with vulnerable forests and interests in forest carbon offsets.

Keywords:

• forest carbon sinks
• Emissions Reduction Fund
• climate change adaptation
• science-policy-practice interfaces

1. Introduction

Forest sinks have contributed to Australia cost-effectively meeting (modest) national emissions reduction targets and participating successfully in international climate change treaties and mechanisms (Hamilton and Vellen 1999; DISER 2021). The urgency now for rapid and substantive cuts in greenhouse gas emissions to avoid dangerous climate change requires national emission reduction policies to have high environmental integrity and effectiveness. Robust accounting, underpinned by scientific evidence, is a prerequisite for ensuring environmental integrity. In particular, scientific knowledge is critical for the establishment of baselines, to understand the nature of risks and how management practices affect sequestration, and to inform management for the sustainability of sequestered carbon, all of which contribute to meeting integrity standards of additionality, permanence, and the avoidance of leakage (e.g. Baker et al. 2010; Verkerk et al. 2020). The focus of this article is on permanence, which ensures the credited carbon reductions endure and deliver carbon benefits over timeframes relevant to the atmospheric life of greenhouse gases.

Recent research on climate change and forest carbon sequestration suggests considerable risks to Australian forest carbon sinks this century, which could result in impermanence in parts of the sinks estate and challenge risk management approaches (Bennett et al. 2020; Roxburgh, Paul, and Pinkard 2020). Such science indicates that knowledge of future climate change needs to be robustly integrated into Australia’s forest sinks policy, and into private company and land management practices incentivised by that policy, for their enduring integrity. While physical risks to forest sinks from climate change are noted in numerous studies, relatively little research examines how to integrate future climate into relevant policies and initiatives (e.g. Nolan et al. 2018). Addressing this gap is timely, as many forest sink projects supported by the Australian Government’s climate policy are in regions with lower and less reliable rainfall, which could face greater water constraints and challenges to sequestration in the future (Fleming et al. 2019; CSIRO and BoM 2015).

This article addresses this gap through two research questions: (i) How can the growing knowledge of future climate change be robustly integrated into policy and practice for forest carbon sequestration in Australia?; and (ii) What reforms, if any, are needed to enhance Australia’s science-policy-practice interfaces for forest sink permanence in a changing climate? The focus of the research is on Australian Government policy and initiatives, reflecting the sphere of government with responsibility for international treaties and national emissions reduction measures, including those that encourage private action. Further context regarding Australia’s forest sinks policy, the state of knowledge on likely climate change impacts on forests, and key practitioners engaged with the policy is in Section 2. Semi-structured interviews with experts from each of these science, policy and practice cohorts provide the key data source to explore the research questions, and Section 3 describes the qualitative thematic analysis approach taken. Section 4 then provides the thematic results of the study, and Section 5 discusses the results of this analysis with regards to the research questions and draws on these findings to propose reforms that would enhance the environmental integrity of national policy and climate-adapted implementation in a changing climate. These findings may have wider relevance, as forests continue to be important in global climate change initiatives, such as in the allowance for offsets in multilateral market rules under the Paris Agreement agreed in the 2021 Glasgow Climate Pact, and in national inventories and action by countries and businesses seeking forest offsets to help meet net zero targets.

2. Context

2.1. Government policy and initiatives

The importance of land-use change and forestry to Australia’s emissions profile and climate change policy is illustrated by the nation’s reliance on a substantial drop in emissions from forest clearing in the 1990s to meet the Kyoto Protocol’s first commitment period (2008–2012) target, and in studies which identify a potential for low-cost increases in carbon in the landscape to offset a significant proportion of total national emissions (Hamilton and Vellen 1999; Garnaut 2008; Bryan et al. 2015; Mace and Hare 2019; Pears and Baxter 2019). To realise these opportunities, Australian Government initiatives have improved land sector carbon accounting through a National Carbon Accounting System and funding of a cooperative research centre on greenhouse accounting (1999–2006), built the capacity of farmers to earn carbon credits through the Carbon Farming Initiative (CFI, 2011–2015), and, since 2014, incentivised new emissions reduction practices and technologies through the Emissions Reduction Fund (ERF, which absorbed the CFI).

The ERF, with funding of some AUD 2.4 billion at September 2020, is a key national emission reductions measure (CCA 2020; DISER 2021). Through the ERF, registered projects that comply with an approved method can earn Australian carbon credit units (ACCUs) for emission reductions, each equivalent to one tonne of carbon dioxide emissions avoided. Most emission reductions and ACCUs issued under the ERF come from vegetation management, particularly from methods that credit carbon storage from regrowth of vegetation (HIR, human-induced regeneration) or from preventing land clearance (avoided deforestation) (CCA 2020). Typically, the methods that guide ERF projects are regulatory technical documents that prescribe requirements for project eligibility, forest biomass estimation, and monitoring and record keeping (CER 2021a). Several methods indicate that total carbon stocks are to be estimated using the modelling tool FullCAM (Full Carbon Accounting Model) (Richards and Evans 2004), supported by specified measurements and equation sequences to determine project stocks and emissions. The methods rely on historic and current, as embedded in sequestration, climate data. Risks to the permanence of collective ERF sinks are managed by the government through the risk of reversal buffer (effectively a flat 5% “tax” applied to all carbon payments), the 25- or 100-year permanence requirements, where a further 20% reduction in ACCU payments is applied to projects that select the shorter timeframe, and the need to restore losses from fire or other disturbances. The government and other credit purchasers also pay for credits based on audited measurements of achieved sequestration. Beyond the ERF, voluntary action by businesses, including in offsets, is supported through Climate Active guidance and standards for carbon neutral certification (DCCEEW 2022).

With the election of a more progressive Labor government in 2022, the ambition of Australia’s climate change policy has increased with national 2030 and 2050 targets now enshrined in legislation (Albanese and Bowen 2022). An independent review of ACCUs is also underway, following concerns raised about aspects of the ERF, with a goal to ensure the integrity of ACCUs and the ongoing strength and credibility of the scheme (Bowen 2022; Macintosh et al. 2022).

2.2. Impacts of climate change

A growing body of research exploring climate change impacts on forest sinks is highly relevant to the ERF, as the majority of HIR and avoided deforestation projects are in semi-arid regions with lower and less reliable rainfall (Fleming et al. 2019; Nolan et al. 2019). These research findings need particular attention, as emission reduction policies in Australia are developed separately from climate change adaptation policies (DISER 2021). Climate change impacts research builds on well-established knowledge that climate and climate variables shape the broad-scale nature, distribution and diversity of forests in Australia (Engelbrecht et al. 2007; Gordon et al. 2018; Bennett et al. 2020). The vulnerability of particular forest types to the variability and extreme weather events that characterise Australia’s climate, and the capacity of those forests to lose carbon stocks in such events, also have a long research history. Drought is well understood as a cause of tree die-off; Australian studies in diverse regions have recorded drought-induced forest dieback mortality rates of 18–30% (Matusick et al. 2013; Silcock, Witt, and Fensham 2016; Fensham, Laffineur, and Allen 2019). High temperatures and heatwaves have been implicated in canopy, stem and plantation mortality in more temperate and higher rainfall regions (Butt, Pollock, and McAlpine 2013; Matusick et al. 2013; Ruthrof et al. 2018; Roxburgh, Paul, and Pinkard 2020). High intensity wildfires can also reduce the regenerative capacity of forests and increase the likelihood of future severe fires in southern Australia (Fairman, Bennett, and Nitschke 2019; Collins et al. 2021).

Climate change projections reveal that extreme weather events could occur more often, and several studies project declining forest carbon sequestration rates that may exceed or challenge ERF risk management mechanisms (CSIRO and BoM 2015; Hobbs et al. 2016; Gordon et al. 2018; Roxburgh, Paul, and Pinkard 2020). Mitchell et al. (2014) found droughts capable of causing significant tree mortality could increase from 1 in 24 years to 1 in 15 years by 2050, accompanied by a doubling of associated heat waves. With semi-arid woodlands already experiencing temperatures up to 46 °C, warming in coming decades is highly likely to exceed known thermal tolerance ranges (48 to 54 °C) and increase mortality rates (Curtis et al. 2014; Nolan et al. 2019). Climate change is now also challenging the assumption that post-fire regrowth will fully re-sequester carbon as the severe fire events of the 2019–2020 summer burnt traditionally wet forests that lack epicormic resprouting capacities, and shorter inter-fire intervals can increase the risk of woody plant extinction in regions likely to become hotter and drier (Enright et al. 2015; Roxburgh, Paul, and Pinkard 2020).

Collectively, forest extent could contract in some regions as a result of climate change, with lateral and poleward range shifts for open woodland and subtropical forest species likely (VanDerWal et al. 2013; Keenan 2017). Scenario-based estimates find a 20–40% loss of the eucalypt climate space in open woodland regions under mid-range or high climate scenarios (Butt, Pollock, and McAlpine 2013), and that 20–50% of sequestered abatement could be lost by 2050 because of climate change (Roxburgh, Paul, and Pinkard 2020). The national climate change and biodiversity assessment recognised that the climate change underway could equate to the magnitude of temperature shift since the Last Glacial Maximum, which resulted in landscape-scale biome shifts (Steffen et al. 2009). Beyond such shifts, considerable regional variability can be expected from climate change impacts, knowledge gaps remain, and it is possible that under some conditions sequestration could increase (e.g. Battaglia and Bruce 2017).

2.3. Changing regime actors and needs

The forest sinks regime is also changing in Australia. Forest sequestration measures initially targeted farmers through the CFI, with landholders offered an additional income stream that could diversify traditional agricultural businesses and deliver environmental services. In part triggered by the 2015 Paris Agreement, private investment in forest offsets has dramatically increased in recent years, particularly from fossil-fuel intensive companies. In Australia, corporate partnerships established in 2020 alone include between Greening Australia and oil and gas producer Woodside, with offsets central to Woodside’s plans to reach net zero by 2050, and between advisory firm Pollination Group and global banking giant HSBC to facilitate up to US$3 billion (AUD$4.15 billion) in “natural capital projects” including to sequester forest carbon (Mazengarb 2020). Shell Australia also acquired Select Carbon in 2020, an Australian company managing a carbon farming portfolio over 9 million hectares (Shell Australia 2020). With features attractive to private investment such as redeemable ACCUs, adequate governance, and some 85 million hectares of cleared land, commitments of the Business Council of Australia and global mining companies BHP and Rio Tinto, among others, in net zero targets by 2050 could substantially increase investment in carbon offsets in Australia (e.g. BCA 2021; Bryan et al. 2015).

While privately created sinks contribute to Australia’s target, new private actors bring considerable resources to offsets that are not subject to national methods, and debate continues on whether voluntary carbon markets align legitimately and credibly with the architecture of the Paris Agreement (e.g. Kreibich and Hermwille 2021). Policy on climate change, in turn, emerges from dominant narratives and discourses, rather than objectively weighed evidence, and is influenced by powerful actors (Shanahan, Jones, and Mcbeth 2011; Langston et al. 2019). It seems apparent that science now needs to find ways to engage with those actors to facilitate the uptake of climate change knowledge in policy and practice, with ultimate benefits for investors, project participants, and national and organisational targets.

3. Method

With improving climate change impacts knowledge, the strengthening of Australia’s forest sinks initiatives requires, it would seem, better coherence of policy goals and settings, and implementation practices, with this scientific evidence. It is argued here that such coherence depends on inclusive science-policy-practice interfaces (SPPIs), which can facilitate knowledge co-generation for problem solving through iterative engagement across inter-related policy, science, industry end-user and other stakeholder actors and organisations (e.g. Van Enst, Driessen, and Runhaar 2014). In the Australian context, a forest sinks SPPI would link the following stakeholder groups. The national government is a dominant actor with responsibilities as described in Section 1. Industry practitioners, particularly carbon brokers that deliver forest sinks projects, are also key actors and, as noted, there is growing investor interest in offsets from fossil-fuel intensive private actors. Science actors span forest researchers with understanding of the climate-sensitivity of forest types and how forests are impacted by extreme weather events (Burke 2016; Bennett et al. 2020; Keenan 2017; Roxburgh, Paul, and Pinkard 2020), and climate science researchers with understanding of likely changes in Australia’s climate (CSIRO and BoM 2015).

With this framing of SPPI actors, interviews were sought with experts from each of these stakeholder groups to explore their perspectives on (i) how future climate change knowledge can be robustly integrated into Australia’s forest sinks policy and practice, and (ii) what reforms, if any, are needed in Australia’s SPPIs to enhance forest sink permanence in a changing climate. The resultant one-on-one semi-structured interviews provided the data for analysis in this research (Yin 2014). Interviewee selection was purposive, based on identifiable expertise to illuminate the operation and needs of Australia’s national forest sink initiatives in a changing climate. The use of internet searches of senior people in relevant organisational structures, professional networks, and the snowball technique, resulted in 17 interviewees from science, government policy and regulation, and industry and land management organisations, each with significant seniority and expertise on the forest sinks regime. Most interviewees had work histories far exceeding a decade in the field, and all had experience working in partnerships across research, government, and industry. Difficulties were experienced in engaging with and obtaining responses from the large fossil-fuel intensive companies investing in forest sinks, and several government and research potential interviewees who had agreed to participate unfortunately withdrew, indicating problems from COVID-19 on work pressures or family health. Interviews were conducted in person or by Zoom videoconferencing between January and October 2021, with each interview lasting from 40 to 85 minutes. Interview questions were informed and tailored by a review of scholarly and grey literature on forest sinks and climate change impacts, and organisational roles and activities from agency websites. Interviews were recorded where research participants agreed. An overview of research co-participants is provided in Table 1.

Table 1. Research participants.

Research co-participant categories	Number
Science	8
Industry (carbon broker)	4
NGO land management	2
Government and regulator	3
Total	17
Participants with sub-national focus	2
Researchers with 10+ years of experience of science-policy	15

Interview data were then analysed using a thematic analysis approach, which can help reveal themes and patterns in a dataset focused on a generalised topic (e.g. Braun and Clarke 2014). The thematic analysis proceeded according to the following steps: (i) familiarisation of the content in the interview records, (ii) identification of possible themes, including where supported across organisational categories, and (iii) review and finalisation of themes. Thematic findings revealed strong awareness of climate change challenges and opportunities for forest sinks initiatives (elaborated further in Section 4 and Table 2), and a consistent call for reforms to enhance the SPPI for the long-term sustainability of forest sinks in a changing climate (elaborated further in Section 5). Importantly, the themes identified were supported by experts across organisational categories. Analysis of documents identified in the literature review was also undertaken to corroborate and enhance the validity of identified themes from the interview data, through checking the broad coherence of the results with existing documentary analysis or research findings (Yin 2014). Some verbatim quotations from the interviews are incorporated into the analysis to illustrate and support the interpretations made (Sandelowski 1986). Participant views are attributed in citations according to organisational categories, notably industry (Ind), science (Sci), land management (Lm) or government (Gov), and are cited in the following style (Ind1 or Sci3).

Table 2. Climate change challenges and opportunities for Australia’s forest sinks SPPIs.

SPPI component	Challenges	Opportunities
Science	Resourcing for forest and climate research insufficient for robust understanding of rapidly changing risks Lack of mechanisms for knowledge synthesis and shared learning Science uncertainty affects perceived research relevance	Science maturity to support risk assessment and adaptive management Growing insights from landscape sustainability science on dynamic and interlinked change Industry science partnerships and growing experiential learning Emerging time series sequestration datasets under variable conditions Government interests in geospatial tools^3 and robust ACCUs
Policy (including methods, implementation incentives and wider context)	Goals not formulated through dialogue across regime actors Policy separation from adaptation, climate risks insufficiently recognised Diverging sector may increase tension and community concern Prescriptive methods exclude consideration of climate change impacts and their permanence implications Institutional rigidity constrains innovation and limits science uptake Poor coherence with wider landscape policies constrains uptake	Community calls for more integrated landscape management Growing understanding of potential for significant co-benefits Recognition that HIR projects performing poorly provides impetus for reform Ongoing challenges with landscape degradation and community call for participation in finding solutions across scales
Industry and practitioners	Lack of tools for industry on how to integrate future climate Prescriptive methods limit capacity for innovation Lack of government established data gathering and sharing provisions require industry to fill gap	Lessons learned from adaptive management approaches such as on the value of long-range forecasting, site preparation, and for some regions First Nations insights on fire management Recognition that collaboration facilitates learning for a more effective regime Collaboration in code of practice enhancing accountability and quality of forest sinks
Interfaces	Partial. Lack of formal mechanisms for engagement across regime	Appetite across industry, land managers and researchers for greater collaboration

4. Results

Five themes emerged from the thematic analysis and were supported by interviewees from more than one organisational category. The themes, described further below, are that (i) policy and methods need reform to reflect a changing climate; (ii) regime collaboration mechanisms are weak; (iii) prescriptive methods constrain science uptake and innovation; (iv) industry and practitioner leadership is strengthening; and (v) motivations are diverging across the regime.

4.1. Policy and methods need reform to reflect a changing climate

The majority of participants identified the impacts of climate change on carbon stocks and sequestration across Australia to be an important issue that needs central consideration in forest sinks policy and methods. All science, industry, and NGO participants assessed the current knowledge of climate change impacts to be adequate for its integration into policy and management. In particular, with regard to the application of science, participants argued that understanding of the direction and magnitude of change for many forest systems is robust for risk and uncertainty assessment of the bounds of possible future sequestration rates, and capacity can be increased now to incorporate climate change science into sequestration methods (Sci1,7,8).

That forests are responding to a climate that has already changed, and is projected to change further in ways that could negatively impact carbon stocks and forest extent, was understood by participants as revealing a need for improved collaborative approaches to learning and reforming policy. Multiple examples were provided of observed forest change exceeding envisaged impacts. For example “we are seeing widespread tree stress and death from drought and heat in many regions”, bushfire impacts were 4-fold greater than the worst case risk assessment scenario, and some “drought-stressed forests are unable to recover after fire, even after a year” (Sci1,5,7). Furthermore, “most productive forests were previously considered too wet to burn frequently; this is changing and, in the future, we could see loss of carbon dense forests with big changes to carbon stocks” (Sci5). The sharing of this experience, along with retrospective climate study findings, was seen by science participants as critical for robust risk assessment involving climate change scenarios, and user-relevant regional risk knowledge. The uptake of such knowledge in policy and methods for HIR projects was identified by many interviewees as having urgency, as such projects are typically located in areas with lower and less reliable rainfall, where regeneration potential is predominantly weather-dependent.

Beyond experiential learning, participants across industry, NGOs and science communities identified the need for greater knowledge on (a) the capacities of forests to cope with multiple impacts, (b) when such impacts will be tipping points for forest structural or ecosystem change, and (c) how the spatial distribution of major risks will change (Ind2; Sci2,3,6). Accessible, decision-ready knowledge, however, was described by participants as requiring incentivising policy, mechanisms and resourcing (these issues are further explored in Section 5). In this context, concern was also expressed by science participants that the strong research programs in the 1970–1990s that built knowledge of species-specific responses to drought, heatwaves and elevated CO₂ conditions of future climates no longer exist. This lack, without address, will impact on knowledge generation for future management.

4.2. Regime collaboration mechanisms weak

Most participants linked the environmental integrity of forest sinks policy to science-based accounting, and adaptive and anticipatory learning and management in the context of climate change. However, both research and industry participants identified weak interconnections with government as a problem for policy development and implementation. Leading carbon brokers in Australia, managing extensive areas for forest sinks, expressed frustration with formal collaboration mechanisms, indicating for example that “the Government has the right rhetoric on co-design and partnerships, but these are slow to evolve; the reality is that industry is not consulted early and has little capacity to actually influence methods” (Ind1). Further, government-organised “workshops with lots of people often don’t get to the crux of key issues; the politics seems to be taking over and the science gets subordinated in methods discussions” (Ind2). Research and industry participants identified a deficiency in national scale conversations between scientists and [non-carbon] forest managers, further seeing this deficiency as limiting the development of a shared understanding of the significance of climate change for forest growth and the identification and uptake of opportunities for knowledge co-production.

Contributing to this weak interface, several participants stated that technical capacities regarding evaluation and incorporation of scientific evidence in policy and ERF methods have declined in the national government (Ind1,3; Sci1). The agency¹ responsible for the ERF was perceived by several participants as having a huge turnover of staff, and not enough ongoing knowledge (Ind2; Sci2). Consequent weaknesses in audit processes, including in feedback to methods development, were identified by participants across regime domains (Ind3; Sci3; Gov3). Further, research and industry participants identified that Government-provided tools are also starting to lose currency: “the last FullCAM update by the Government was suboptimal, based on poor consultation and not drawing on all the best data” (Ind2,3).

4.3. Prescriptive methods constrain science uptake and innovation

Weak collaboration has also resulted in rules-based and prescriptive ERF methods which were perceived by industry participants as inflexibly focused on details, with poor capacities to cope with change, including for climate-sensitive local implementation (Ind1,2). That current prescription constrains consideration of climate change was raised as a concern by both industry and science participants. Challenges discussed included that the version of FullCAM available for use in methods, for example, assumes landscape carbon neutrality which is not valid in changing environmental conditions, and does not draw on climate change scenarios (Ind2,3; Sci5). Carbon broker participants argued that other models should be able to be leveraged that better meet the criteria and address appropriate uncertainties (Ind1,3).

Prescriptive methods were also described by participants as inhibiting cross-regime dialogue on emerging technologies that could enhance implementation (Sci1,6). Technologies such as air seeding of vegetation, techniques to increase soil moisture retention, high-resolution remote sensing and drone data and surveys for monitoring and verification, may deliver the outcomes sought, useful datasets, and potentially reduce compliance costs, but are prevented by specified methods (Ind1,2; Lm1; CMI 2021b). As explained by a science participant, with climate change “our forests are moving into uncharted territory, and experimentation will be needed to avoid forest loss and degradation” (Sci7). Participants were also confident that innovation could deliver efficiencies and co-benefits that would strengthen the ERF (Ind1,2; Gov1). The US-based Verra standards for climate action, including more tailored risk ratings and thresholds, allow for industry flexibility to write methods that meet standard integrity tests, and were identified by one participant as a better practice model (Ind2; Verra 2021).

4.4. Industry and practitioner leadership strengthening

With rainfall deficiencies experienced across much of Australia for many years since the ERF commenced, practitioner participants described increasing use of adaptive management approaches to assist forest regeneration (Ind1,2,3). Learning by doing, industry is gaining knowledge and data on project performance under various climate conditions, with one organisation having up to a decade of baseline and time series data for projects over 10 million hectares (Ind1). Carbon broker participants also flagged that they are partnering with researchers to better understand future climate risks and effective responses, including landscape scale restoration approaches relevant to project portfolios.

Practitioner and research participants discussed that while the ERF’s risk management mechanisms are adequate across the initiative, they are insufficient for many projects and are unlikely to mitigate combined climate variability and climate change risks this century, particularly in areas facing increasing aridity (Ind1,2; Sci2,3,6,7). The risk of losing forest cover due to climate change is now recognised by industry participants as a commercial issue. Tailored climate risk mitigation measures beyond ERF methods are being widely applied by practitioner participants, including species selection suited to future climate beyond the shorter permanence period, adjustment of the timing of establishment activities to benefit from rainfall events, and creation of internal buffers in portfolios (Ind2). Recent drought events have also challenged parts of the industry, with impacts of the widespread 2017–2020 drought in New South Wales including delays to planting and consumption of much of a company’s internal buffer (Ind2). Looking ahead, participants highlighted the importance of robust approaches to climate risk management, based on quantifiable methods, science relevant to regional and property scales, and an understanding of risks that can disrupt investment streams.

More broadly, participants noted that development and adoption of the Australian carbon industry’s code of conduct that seeks to enhance the market integrity, transparency and accountability of forest sinks practice, demonstrates leadership by the industry (Ind2,3; CMI 2021a). The code aims to increase the quality of carbon abatement that is occurring in Australia and facilitate meaningful stakeholder engagement and delivery of environmental and employment co-benefits. It has attracted signatories across key industry organisations since its launch in mid-2018 (Carbon Market Institute (CMI) 2021a).

4.5. Diverging motivations across regime

Participants from across industry, government and science portrayed the forest sinks regime as in a state of dynamic change, where actors’ interests in the trade of forest offsets are diverging. Industry and land management participants recognise many farmers as having interests in measuring carbon sequestration for their farm carbon accounts, rather than for trading carbon, an approach reinforced by recent industry commitments to carbon neutrality.² For instance, many farmers see their property as a legacy able to support reforestation activities that deliver productivity, social license and resilience co-benefits (Ind1; Lm1; Schirmer and Bull 2014; Fleming et al. 2019), and seek services from carbon brokers to help them realise such outcomes. Simultaneously, as noted by government participants, the CFI sector has grown into a large business. Carbon brokers now manage land and projects worth hundreds of millions of dollars and are a significant industry voice in their own right (Gov1).

Industry and government participants also identified that well-resourced companies have interests in offsets to meet net zero targets and can purchase substantial areas of forest sink to meet private objectives. Shell Australia’s purchase of forest sinks over 9 million hectares, for example, removes that sink from regulatory approaches that could seek to deliver wider environmental or community benefits. Many such global corporates typically engage with voluntary carbon markets and, beyond Climate Active, can access international carbon measurement standards, such as Gold Standard and Verra, which also only provide limited guidance on how best to consider future climates in projects and are not tailored to Australia’s conditions (Kollmuss, Zink, and Polycarp 2008; Gold Standard 2021; Verra 2021). A relative weakness in compliance testing of large company voluntary offsets, including strength of mechanisms to ensure permanence, was also identified by participants (Ind2; Gov2).

Carbon broker participants highlighted that there are marked differences in the interests and science needs of rural partners and big institutions with a focus on ESG, requiring tailored frameworks for engagement, monitoring and risk management. Participants across organisational categories indicated that government leadership is now needed to level the playing field regarding climate science and data availability, and in policies to facilitate long-term climate-adapted approaches in any up-scaling of investment (Ind1; Lm1; Sci3). In this context, strengthened regime collaboration interfaces were identified as important to address areas of incoherence in regime actors’ objectives.

5. Discussion

This study makes visible a growing misalignment between scientists’ understanding of climate change risks and current national forest sinks policy and methods in Australia. The variability of Australia’s climate and the likelihood of more extreme climate events point to risks of climate change driving losses of forest carbon storage through the 21st century, which are not well reflected in policy. Also of significance is a finding that, in its inattention to changing and higher end risks, policy and methods to date could be substantially overestimating the permanence of certain ERF projects. These findings align with recent studies in Australia, as noted in Section 2.2 and in other climate-sensitive regions (e.g. Anderegg 2021). Through concerns about the permanence of forest sinks in a changing climate expressed by experts across regime stakeholder groups, they also highlight urgency in addressing the first research question of this study – how climate change knowledge can be integrated into forest sinks policy and practice in Australia.

To inform an effective response to this research question, an improved understanding of how and why the misalignment between science and policy is growing was sought through exploring actor perspectives across the forest sinks regime. The study revealed a regime with multiple and different interfaces, and the utility of a disaggregated organisational consideration to identify how barriers and enablers to the uptake of science into policy and practice function. This approach aligns with recent studies that understand SPPIs as social processes that are outcome-focused, that a focus on the production of actionable knowledge is insufficient, and that greater attention is needed on decision-making processes and contexts (e.g. Serrao-Neumann, Di Giulio, and Choy 2020; Weichselgartner and Arheimer 2019). In turn, it enables a better understanding of how the various interfaces between organisations present challenges and opportunities to how policy and practice can more effectively integrate climate change knowledge. Table 2 summarises the various challenges and opportunities identified by participants for the better integration of climate change science into Australia’s forest sinks policy and practice. It leads to the other central finding of this study that knowledge co-production and national SPPIs for forest sinks in a changing climate are weak in Australia.

As outlined by the participants in this study, realising these opportunities calls for reforms to regime SPPIs that recognise the magnitude of climate change risks to forest sinks, address gaps in knowledge, and facilitate its uptake through enabling policy and collaboration. With regards, then, to the second research question as to how the SPPIs may be enhanced for forest sink permanence in a changing climate, three interlinked reforms can be identified:

1. Provision of tools that facilitate consideration of future climate change in project planning and risk assessment. An initial climate risk screening tool is needed to show the significance of climate risks to forest sequestration, including areas that could shift from predominantly forest to non-forest ecosystems under medium or high climate change scenarios this century (Ind2,3; Sci1,7). To support rapid initial screening of climate risk, the tool could be derived from forest potential mapping, a mid-range climate change scenario, and expert knowledge of forest vulnerability, and be freely available. A regional climate change risk management diagnostic tool would then be used where initial screening suggests medium or high levels of risk to sequestration this century. This tool responds to a need for diagnostic capabilities on when and where management interventions can assist tree survival and hazard management, particularly for forests in areas with marginal water supply, and where climate limitations to sequestration are critical (Ind1,3; Sci2,7,8; Mitchell et al. 2014; Keenan 2017). Many participants argued that such a tool would link climate change scenarios, likely regional impacts on forests, and growing knowledge on the effectiveness, costs and benefits of various interventions, and can be built collaboratively to inform risk management planning.

2. National forest carbon policy framework. Such a framework would respond to issues raised by many participants to establish a unifying long-term vision, best practice standards regarding scientific knowledge for tests of permanence, and science-policy-practice interface mechanisms that support learning, outcomes-based methods, and innovation. To address barriers to the access and translation of future-oriented climate and forest science into decision processes (e.g. Colavito 2017; Keenan 2017), participants argued for national policy to establish mechanisms for the two-way sharing and integration of data and emerging knowledge (Ind1; Lm1). One option could extend partners of the Australian Climate Service initiative (ACS 2021) to the forest sinks regime, integrating too the leading work of the states in, for example, integrated forest research and decision support (Ind1; Sci5). Collaboratively developed, participants suggested that such a partnership could bring multiple datasets from both practitioner and research sources to enhance learning on forest performance in a changing climate, enable timely software upgrades for bioclimate parameter generation for model use, support up-to-date regional sequestration potential and risk assessment services, and transparent verification of sequestration actually achieved (Fleming et al. 2019; Ind1,2,3; Sci5,7). Further, while non-sequestration benefits were deliberately excluded from the scope of ERF vegetation projects to ensure low-cost abatement, a carbon price alone has not facilitated large carbon farming projects in agricultural regions or driven the stacking of carbon and other benefits (Fleming et al. 2019; CCA 2020). A comprehensive consideration of co-benefits is beyond the scope of this article, but several participants indicated that a re-framing of incentives in a national framework to prioritise wider socio-economic and environmental co-benefits could now stimulate greater landholder uptake and support climate-adapted forest sink projects and long-term landscape carbon retention, and support sink permanence (Ind1; Sci2,7; Lm1; Schirmer and Bull 2014; Bryan et al. 2015; CCA 2017; Nolan et al. 2018; Fleming et al. 2019; Schwartzman et al. 2021). One option could be to manage current forest projects that might lose carbon with climate change for specified climate adaptation or loss-retarding benefits, for example from the regeneration of non-tree species or maintenance of ecosystem services (Lm1; Sci7; Verkerk et al. 2020).

3. Collaborative industry-research partnerships. The large majority of participants indicated that policy and methods for predicting and assessing forest carbon sequestration that robustly include the effects of climate change would optimally be underpinned by collaborative partnerships that link research, learning from implementation and experimentation, and decision-support tools. Such a collaborative partnership can also address current areas of confusion identified by participants, such as between inventory and research (Ind3). An enhanced national forest modelling capability that can better reflect the spatial and temporal variability of climate feedback on forest processes, recovery potential, species bioclimatic range, and mortality risk, as well as management interventions, is a priority to operationalise climate change and better inform decision-making (Ind1,2,3; Sci5). Development of a loosely coupled operational model system can make better use of currently available tools, and support innovation (Ind2,3; Sci1,7). For example, existing dynamic earth system models such as the Australian Community Atmosphere Biosphere Land Exchange model (CABLE) can simulate biomass change under various climate scenarios, link to other relevant models such as to simulate fire spread, and then calibrate policy models being used for project carbon accounting (Ind2,3; Sci7). Such a system would also provide robust and tested alternatives to the currently available version of FullCAM, such as the open-source Full Lands Integration Tool (FLINT) which is configured to spatially and temporally model climate change impacts on forest carbon, and to distinguish drivers of change (Ind1,3; Roberts et al. 2022). As previously noted, critical knowledge gaps also need to be addressed, including a better understanding of the hotspots of greatest potential change in forest health with climate change, how sequestration rates and regeneration potential could quantitatively change, the impact and likelihood of multiple or compound events, the performance of various and coupled models in sequestration estimation, and the opportunities for and spatial mapping of potential co-benefits (Sci1,2,4; Lm1; Ind1,3; Fleming et al. 2019, CMI 2021b).

   Many participants pointed to Australia’s experience in industry-research partnerships as important to be drawn upon in the design of institutional mechanisms to support an evidence-based approach to forest sink permanence. Australia’s Rural Research and Development Corporations (RDCs), partnerships between the Australian Government and primary producers to co-invest in research and development for the benefit of industry and regional communities, have helped drive innovation and improve productivity since 1989 and could be a relevant model for forest sinks (Ind3; Lm1; Gov3; DAWE 2021). Similarly, the Joint Venture Agroforestry Program (1993–2009), a partnership between three RDCs, collaborated with many government and research organisations to build knowledge of the environmental and productivity opportunities from agroforestry (Sci7; Powell 2009). Support for a multi-actor climate and forest partnership would build on and scale up current industry-research links to meet knowledge needs for future policy and management and complement the current Forest and Wood Products Australia (RDC) which attends to non-carbon market needs and value chain optimisation (Sci6,7; FWPA 2021).

The operation of these three institutional reforms collectively is considered by participants as necessary to improve sink permanence outcomes across the regime. Multiple interfaces require multiple strategies. Adaptive management and anticipatory tools, with policy settings that facilitate their use, support robust practice in changing climate. Collaborative research partnerships, in turn, allow for experimentation in changing conditions, and ensure updated knowledge informs tools, future management needs, and further policy development. A more engaged industry sector, working with policy framings that incentivise sinks within the context of wider land management motivations, may also engender community support and partnerships that build the credibility of forest sink offsets across scales. In concert, these reforms can improve policy outcomes through increasing government and investor confidence in sink permanence, and in substantially improving the evidence base for compliance testing and ongoing policy and methods development, and negotiations at national and international scales.

Furthermore, the climate change risks to permanence of forest carbon sinks point to the benefits of much closer integration of approaches to achieve emissions reduction and climate change adaptation. Effective adaptation foregrounds an understanding of climate change impacts over time, approaches based on wide engagement, anticipation and adaptive learning and implementation, along with an openness towards transformation (Anderegg et al. 2021; Keenan 2017; Nolan et al. 2018). Findings from this study suggest that these characteristics are also now critical for confidence in the environmental integrity of forest sinks, and adaptation considerations need to be a central part of effective forest sinks policy and methods.

In reflection, although some of the stated views of participants may be considered somewhat speculative, participants are speaking from their fields of expertise and their views are, furthermore, consistent with recent studies that find that the future of forests in a rapidly changing climate change is uncertain, and that improvements in both policy and the underlying science, including through the provision of rigorous continental-scale forest climate risk assessments, are needed for effective forest-based mitigation initiatives (e.g. Anderegg 2021; Anderegg et al. 2021; Anderson‐Teixeira and Belair 2022; Breshears et al. 2021). It is also arguable that the deficiencies in our capacities to comprehensively understand and project future climate require such anticipatory approaches in the absence of full knowledge.

6. Conclusion

Forest sinks are important in Australia’s climate policy, and climate change risks to sinks need to be integrated into policies and implementation to strengthen their permanence. This article demonstrates the value of attention to coherence between climate change science, policy and practice in the national forest sinks regime, where knowledge of changing conditions remains incomplete. The weak interface identified between climate change science and national policy and parts of industry practice, including a lack of formal mechanisms that facilitate regular engagement with science, help to explain the lack of future climate focus in methods and specified tools. Declining resources, reported by interviewees, and weak coordination mechanisms between forest researchers and industry have also undermined the capacities of science to influence practice. These weaknesses, in turn, point to governance reforms to normalise the ongoing uptake of knowledge that are tailored to the challenges and opportunities identified within the regime. The call for a new forest sinks research-industry partnership in this article, for example, can address deficits in engagement mechanisms and knowledge for future management described by participants.

The proposed national policy framework can also incentivise knowledge uptake to support sink permanence and help address wider land sector sustainability challenges. In a warming climate, Australia faces increased risks of forest loss and desertification, and approaches that enhance carbon retention through natural regeneration can help repair landscapes and increase their productivity and long-term climate resilience. Further research and analysis is needed to appreciate the potential of forest regeneration for both carbon and landscape repair objectives under various climate change scenarios, and to identify the governance approaches that can be effective in the context of the magnitude of the risks. While power and political issues within the forest sinks regime were not addressed in this article, further consideration of inequities and political “lock-ins” that constrain imposition of more robust expectations on specific stakeholder groups is needed for such a policy to be effective.

Finally, while the article has focused on Australia’s forest sinks regime, the challenge to incorporate changing physical risks from climate change to ensure permanence in carbon offsets is a wider global problem, and there is limited readily available guidance on how best to consider future climates in forest policy or projects. While there are considerable regional and national differences in forest vulnerability to climate change, and in drivers for methods or standards reform, insights from this article regarding tools and institutional reforms to better align climate change science with forest sinks initiatives may have relevance to other countries with interests in forest sinks and facing increasing aridity and bushfire risks.

Acknowledgements

Constructive comments from two anonymous reviewers, and Darren Sinclair, Jonathan Pickering, and Jane Mummery on earlier drafts are much appreciated.

Disclosure statement

The author declares no conflict of interest.

Notes

1 The Clean Energy Regulator is responsible for administration of the ERF. Outcomes of the current ERF review may have implications for agency responsibilities.

2 For example, the Australian red meat industry has adopted a carbon neutral by 2030 initiative, and GrainGrowers support net zero carbon emissions by 2050 for Australia.

3 For example, the Clean Energy Regulator’s Corporate Plan 2021-25 identifies the need to significantly enhance geospatial tools and capability for faster and more accurate assessment of claims for Australian carbon credit units (ACCUs) (CER 2021b).