Sequestration can help landholders generate income while benefiting both climate change abatement and biodiversity management. However, NRM managers and landholders need to ensure that tree plantings for carbon bio-sequestration maximise environmental benefits and avoid unintended adverse effects on biodiversity, water, and agricultural production systems. New plantings, especially of native species, and the re-establishment of forests and woodlands offer one of the easiest ways for land managers to offset greenhouse gas emissions, as the amount of carbon sequestered is measurable and verifiable. The establishment of forest plantations and retention of regrowth (especially environmental plantings of native species) also offers important biodiversity benefits. Stands of vegetation may enhance habitat for wildlife as well as improve connectivity between areas of native vegetation and grasslands.
Risks associated with sequestration are modest, and generally result from water interception and enhanced fire risk. Non-locally indigenous tree and/or shrub species may also become invasive. Avoidance and promotion criteria and the carbon farming priorities incorporated in the Spatial Assessment Tool (SAT) were intended to help place carbon farming activities at locations which lessened risks to natural resource assets, values and ecosystem services resulting from carbon farming. For non-environmental plantings, Carbon Farming Initiatives (CFI) regulations (including rainfall restrictions for permanent mallee plantings and the requirement to offset water entitlements for conventional non-environmental plantings in over 600 mm rainfall areas) also seek to mitigate risks. Commercial gain from sequestration may be limited due to the requirement in higher rainfall areas to offset water interceptions and also the anticipated lower carbon prices under the Emissions Reduction Fund (ERF).