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This report is a CSIRO investigation of the profitability of forestry for a wide range of scenarios and is a discussion of practical constraints to widespread expansion of trees to sequester carbon dioxide in the agricultural landscape.

New tree plantings can be established in agricultural landscapes to sequester carbon dioxide and help-offset greenhouse gas emissions. In assessing the potential impacts of a carbon offsets scheme, a common question typically is 'to what extent might agricultural land be converted to tree plantings?'

This report begins to address at least part of that issue through analyses of economic returns from tree plantings to offset carbon emissions and discussion of practical constraints to widespread expansion of these planting types. The economic analyses acknowledge that calculated profitability depends upon assumptions used in the modelling.

The work is an investigation of the profitability of forestry under a wide range of assumptions of carbon price, plantation establishment costs, growth rates of trees and discount rates. The results from each scenario identify potential areas of opportunity for carbon forestry for that set of model assumptions.

The scenarios are not predictions of the extent of land use change to forests, for which many other social and market factors need to be considered.

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