Tasmania plans to profit from being Australia’s only greenhouse gas sink. Tasmania is unique in Australia for two reasons: it is the only Australian state which has most of its energy requirements met almost entirely by hydropower; and it has by far the greatest capacity to absorb emissions as 60 per cent of the state is forest.

David Llewellyn, Australia’s environment minister, said that Tasmania was in a good position to be able to take full advantage of Australia’s National Greenhouse Strategy to reduce greenhouse emissions under the Kyoto Protocol.

He said: “As emissions trading becomes a reality, Tasmania will attract investment from interstate and overseas from companies, states and other countries trying to reach their greenhouse targets.” While there is not yet a market for carbon credits, figures between $20 and $40 a tonne of carbon dioxide equivalents have been suggested by some experts.

Mr Llewellyn said the government would work to increase Tasmania’s sink capacity, mainly by developing wind power and developing plantations on cleared land, aiming to treble plantations by 2020. He also said that when the Basslink cable was established, Tasmania could sell its clean energy to other states which needed to reduce emissions from fossil fuel energy production.

The Australian Greenhouse Office (AGO) said greenhouse gas emissions in Australia have increased by 11 per cent this decade in all sectors other than land use – three per cent above the Kyoto target.