Carbon credits to fund NSW's Great Koala National Park, but critics question the plan

The New South Wales government's plans for the country's largest dedicated koala national park have passed a key hurdle, but the plan to fund it has sparked debate over who should pay for conservation.

The Great Koala National Park (GKNP) is planned to span 476,000 hectares running inland of Coffs Harbour, south to Kempsey and as far north as Grafton, and was a key promise from Labor during the 2023 state election.

What is a carbon credit?

Carbon credits are generated by ending intensive farming practices, reforestation and other activities that take out more carbon dioxide from the atmosphere than they create.

Through the Clean Energy Regulator, projects are certified and the resulting carbon credit units can be sold on the market like shares on the exchange.

Companies that either voluntarily want to lower their carbon footprint or are required by law to do so have the opportunity to buy the credits.

The NSW government plans on generating carbon credits by ending logging in 176,000ha of state forests set to become part of the GKNP.

Who's paying?

Professor at the Crawford School of Public Policy at the Australian National University Frank Jotzo said many conservationists take issue with carbon credits because they do not encourage polluters to change their practices.

"There's all manner of industrial companies as well as resource companies … who cover part of their emissions reduction obligation by paying for credits," he said.

"You could take the opposing view and say these industrial and resource companies should be reducing their own emissions; that's where the fault line lies in the debate."

University of New South Wales senior lecturer in public sector management Megan Evans said having to cover the costs of creating a national park sets a dangerous precedent.

"I just find it extraordinary that we are having a discussion about how we actually incentivise government [into] doing something that is actually their job," Dr Evans said.

"The idea that a state government is poor or unable to find the resources to create a national park is just an absolute lie."

For and against

New South Wales Greens MP Sue Higginson said the scheme was the best option the NSW government had proposed to set up the GKNP.

"This is the good method that actually sees the end of logging," she said.

National Parks Association NSW Coffs Coast branch chair Grahame Douglas described carbon offsets as "very inappropriate" but argued the GKNP plans have integrity.

"It's not perfect, but it does provide a very real way forward for the management of these areas for conservation," Dr Douglas said.

Timber New South Wales president Andrew Hurford argued ending logging in the GKNP will have more harm on the environment than the predictions made by the carbon credits system.

"We know that when we don't produce timber here in Australia, we import it to make up the difference," he said.

What's next?

NSW Environment Minister Penny Sharpe welcomed the approval by the Senate and said future parks, including the Great Southern Forest National Park currently being advocated for, were also on her radar.

"Methods like [this] would create a framework that could make it easier to create projects like this," she said.