The owners of marginal farming land in coastal areas are being urged to open the floodgates and refill swamps, but sceptics question whether its carbon abatement properties would have happened anyway.
A new blue carbon accounting system, developed by a team of 13 researchers from universities across the country, calculates the amount of carbon sequestered when tidal zones are returned to their natural state.
The program allows landowners to earn carbon credits by rehabilitating ecosystems such as mangroves and melaleuca forests, and the units then sold or traded to generate revenue.
The price paid for Australian Carbon Credit Units has risen from about $16 to about $50 in the past year.
Carbon credit calculator
James Sippo from the Southern Cross University has developed a calculator for use by landholders.
"There are different models for each climate zone in the country," he said.
Dr Sippo said the scheme would target low-lying coastal land which had been drained for agriculture.
"If you think of all the sugar cane land and marginal coastal land that is used for grazing, that is low-lying and really swampy, that was historically drained," he said.
Dr Sippo said a mangrove forest could capture and store three to four times more carbon than a tropical rainforest of the same size.
"Saltwater has some very special chemical properties which change the soil chemistry, and basically that coastal vegetation is an amazing sink for atmospheric carbon," he said.
"The average value would be about 15 tonnes of carbon per hectare per year.
"The Tuckean Swamp, which is the largest natural wetland in the Northern Rivers, if that was converted back to a mangrove forest or a blue carbon system again, it would take up over 4,000 tonnes [of carbon] for the whole area per year.
"Just to give a comparison, the largest industrial carbon sequestration plant in the world, which is called the Orca plant, takes up that same amount."
The Minister for Industry, Energy and Emissions Reduction, Angus Taylor, said it was an exciting scheme.
He said demand for carbon credits was soaring.
"This is a really brilliant market that's driving not just emissions reduction from Australia, but also local environmental outcomes," Mr Taylor said.
Are carbon credits working?
But Polly Hemming, who is an adviser in the Australia Institute's climate and energy team, is sceptical about the scheme.
"I have significant concerns about whether it is going to be crediting abatement that would have happened anyway," she said.
"We know that sea levels are rising … I haven't seen any assurances that mangroves are not just going to grow back anyway.
"If the project has a hundred-year permanence period, and that means you have to keep it there for a hundred years, then you need to make sure that the sea level change and climate variability has been modelled for that period.
Ms Hemming said here was an inherent risk in increasing the supply of carbon credits.
"If the government does increase supply, as it's said multiple times it's going to, then that's not necessarily going to be an incentive to decarbonise any more," she said.
"Emissions are just being offset really, whether it's by Australian Carbon Credits or by international units.
"If the market was working, you'd expect to see emissions dropping."
