Carbon farming diffusion in Australia

Carbon farming is a set of land management practices that abate carbon emissions through carbon sequestration and emissions avoidance. The Australian Carbon Credit Unit scheme enables landholders to receive carbon credits for implementing carbon farming projects that use approved methods to reduce emissions relative to baseline practice. The most widely adopted methodology under this scheme is human induced regeneration, whereby a landholder implements land management changes to enable a forest to regrow. Here, we model the spatial diffusion of human induced regeneration projects in Australia between 2014 and 2022 using spatiotemporal data on project registrations and spatial data on the methodology's economic feasibility. We find that spatial proximity to existing projects is a strong predictor of landholder adoption, conditional on the methodology's average economic feasibility in the region. We also find that a region's average economic feasibility is a relatively weak predictor of adoption, after accounting for landholder proximity to existing projects. The spatial dependency of the diffusion process has led to high levels of spatial concentration in Australia's carbon supply, raising concerns regarding land use efficiency and carbon supply risk. We explore how to design carbon farming schemes to support wider uptake and produce better outcomes.