Great Koala National Park 'dependent' on carbon offsets, but taxpayers will pay 95% of cost

The NSW Government says the Great Koala National Park is “dependent” on money from carbon offsets. Media headlines suggests the offsets are “worth hundreds of millions of dollars”. One supporter of offsets says that this is “real money to manage the forests for a hundred years. It’s a really fantastic proposal. It’s a fantastic scheme.”

How much ‘fantastic money’ are we talking about?

The only semi-public study on the economics of the koala park and the associated Improved Native Forest Management (INFM) method was commissioned by the Australian Conservation and Biodiversity Foundation (ACBF) and conducted by consultants, Mandala.

Mandala estimate that the INFM method could generate 1.5 million carbon offsets per year for 15 years, selling for $67 each. This results in $1.5 billion in total revenue, or $100 million per year for 15 years. The forests are then protected for 100 years.

These estimates are based on the INFM method being applied to all relevant areas in NSW, some 1.3 million hectares. The carbon offset proposal relates to an area of 176,000 hectares, 13% of the total potential INFM area. This 176,000 hectare area will be added to existing national parks to create the Great Koala National Park over a total of 476,000 hectares.

So, based on Mandala’s initial estimates, the revenues from selling Great Koala National Park offsets would be around 13% of $100m per year for 15 years, $13 million per year or almost $200 million over 15 years.

This should be seen in the context of the NSW Government Budget, which is $130 billion this year, expected to grow to $150 billion in 2030 (page 4-2). At $13 million per year, at best, Great Koala National Park carbon offsets are worth 0.01% of the state budget.

Even this seems optimistic. Mandala’s calculations are based on an average offset price of $67. According to the offsets regulator, the Australian carbon offset price has never reached this level. The price has only exceeded $40 twice – first in 2021 and very briefly in 2024. At a more conservative offset price of $40, the koala park offsets would be worth $8 million per year, or $120 million in total.

National parks cost money to manage. According to a source cited by Mandala, written by NSW public servants and academics, in 2017-18, the NSW National Parks and Wildlife Service spent $350 million on staff and asset maintenance costs across both ecological work and parks infrastructure. NSW has 7.6 million hectares of national park, so an average cost of $46 per hectare per year. On this basis, managing the new 176,000 hectares of national park would cost an additional $8.1 million per year, while the total 476,000 hectares will cost $22 million per year.

National parks are managed in perpetuity, and the terms of the INFM method specify 100 years for its relevant area. Over 100 years, the Great Koala National Park will cost $2.2 billion to manage ($810 million for the new area), while its carbon offsets will bring in income for just the first 15 years, worth around $120 million.

In other words, over the long term, taxpayers will pay for 95% of the costs of the Great Koala National Park, while carbon offsets will pay for about 5%. Yet the public is told that it is the carbon offsets that are providing the “real money”, the park “depends” on the offsets.

This kind of corporatisation of public spending is seen elsewhere. Taxpayers pay 90% of the cost of the ‘Westpac Rescue Helicopter’, while the big bank adds some small change. Taxpayers pay for surf lifesaving in WA, while gas company Woodside gets the branding. Rio Tinto get their name on Royal Flying Doctors planesthat the public pays for.

Native forests should be protected because of their ecological, environmental and social value. Not because polluters are prepared to throw in some small change.

Rod Campbell is the research director at the Australia Institute.