Cape York's ecosystems are worth billions of dollars: time to share the wealth

Australia’s Cape York is one of the world’s most outstanding natural areas, a status recognised by the United Nations since the 1980s. Since then, there have been regular political tussles to recognise these values.

In the 19th century, Indigenous people were forcibly removed from the land. Aboriginal people have since regained ownership or control of about 40% of the peninsula.

Today, the area is dominated by mining and grazing, often in ways that don’t benefit local communities. Is this the best use of the land?

One way to answer this question is to look at the economic benefits of conserving the area. In a recently published paper, we estimated the value of Cape York’s ecosystems at between A$130 billion and A$512 billion per year. This is comparable to Queensland’s entire economy at A$295 billion per year.

Ecosystem services

Large, complex and intact ecosystems such as those on Cape York provide many benefits for people. These include regulating the climate, providing habitat for thousands of species, genetic resources (such as wild rice), fresh water, waste treatment and preventing erosion.

We can think of these benefits as ecosystem “services” in an economic sense, and calculate the value they provide. We used estimates from around the world to come up with our figure. For instance, we used the price of carbon fetched at the first Emissions Reduction Fund auction (A$14 per tonne of greenhouse gas).

Indigenous people have managed the land over millennia in a way that has created high ecosystem service values. Without their stewardship, land degradation rapidly followed: clearing, feral animals, weeds, inappropriate fire management and overgrazing are now extensive threats to ecosystems.

There are few economic analyses of the cost of land degradation. Those few that do exist suggest that at least A$2.7 billion per year is spent on controlling feral animals and weeds. Cape York, like northern Australia generally, is also suffering a loss of species, most notably a massive decline in its mammal populations.

Mining is winning…

In 1957, the Queensland government revoked Indigenous reserves at the Weipa mission, on the western side of Cape York, to accommodate bauxite mining. The mine began production in 1964. Today, the mine north of Weipa is one of the world’s largest, producing 26 million tonnes of bauxite.

While the mine has produced great benefits to the national economy, local Indigenous communities remain the nation’s most disadvantaged. The Wik community of Aurukun, 100 km south of Weipa, is one of the most socially disadvantaged communities in Australia.

Recently, Rio Tinto has proposed an expansion onto Wik land, increasing production eventually to 50 million tonnes, with an estimated local economic impact of between A$717 million and A$2.4 billion per year for 40 years. This is comparable to the value of local ecosystems (between A$300 million and A$1.1 billion per year) but, of course, there is no time limit on ecosystem values.

We can also figure that the amount of carbon stored in the forests to be cleared for the mine extension is worth A$122 million in carbon credits. Invested in Australian shares, this would provide an annual return of around A$10 million.

The value of the mine to Aurukun in employment and government-funded land management may be in the order of A$400,000. This is a tiny fraction of the value of the region’s ecosystems, and 4% of the value of the annual carbon credits of the forests to be cleared. This shows a significant mismatch in compensation and an appalling underestimate of the potential of Indigenous land management services.

… farming is not

While mining is the largest industry in monetary terms, farming – largely grazing – is the most widespread. We value the ecosystem services of the grazing lands at up to A$6,100 per hectare. Beef productivity is worth less than A$20 per hectare.

Like northern Australian generally, the beef industry is in poor health with declining terms of trade of about 2% per year.

The uses of pastoral leases are, however, restricted to grazing by law. The law stipulates that graziers must manage the land (for example controlling weeds and pests) as part of their duty of care. But these duty of care provisions mean that graziers can’t access any further value from ecosystem services, or receive further funding to increase the value of their land.

Cape York graziers do see themselves as stewards. Over a dozen properties on Cape York have voluntarily offered part or all of their land as part of Queensland’s Nature Refuges program, while being allowed to continue low-impact grazing.

We don’t know what impact grazing is having on Cape York’s ecosystems. Even so, graziers have limited financial incentives to manage the land better, putting the health of ecosystem services at risk.

Making money from ecosystems

It is the Indigenous owners who have developed innovative models of enterprise focused on ecosystem services. The Olkola people, for instance, are demonstrating that an ecosystem services economy could generate greater returns than pastoralism and deliver multiple benefits.

Through the first Emissions Reduction Fund auction, Olkola Aboriginal Corporation and clan group in southern central Cape York were contracted to reduce greenhouse gas emissions by 455,000 tonnes over seven years by changing the way savanna ecosystems are burned.

Our preliminary estimate suggests that Olkola will possibly earn millions of dollars over seven years for approximately 870,000 ha of land. This income, together with a conservative grazing regime, some funds to manage the national parks, philanthropic funds and tourism opportunities, could provide more economically and environmentally sustainable livelihoods than cattle grazing alone.

Getting the most value out of our ecosystems means we’ll have to embrace new models of enterprise, and not remain stuck in the past.