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Limited data regarding soil carbon (C) sequestration potential and biosequestration potential in arid and semi-arid environments is an impediment to appropriate policy formulation directed at greenhouse gas abatement. This paper assesses the terrestrial C biosequestration and biodiversity restoration potential of the semi-arid mulga lands of eastern Australia by measuring above and below ground C, and by making floristic biodiversity assessments in old grazing exclosures.

Grazing exclusion increased water infiltration rates and water retention capacity in the soil. Exclosures also had increased herbaceous cover and decreased bare ground. Biodiversity benefits included higher species richness and increased abundance of native grasses, many of which have become locally rare under increased grazing pressure.

The study indicates that in the absence of grazing, soil and above ground biomass, when combined, has potential carbon sequestration rates of between 0.92 and 1.1 t CO(2)-e ha(-1) year(-1) over a period of approximately 40 years. The contribution to these figures from soil C sequestration is approximately 0.18 t CO(2)-e ha(-1) year(-1), with above ground biomass contributing an additional 0.73-0.91 t CO(2)-e ha(-1) year(-1). If 50% of eastern Australia’s mulga lands (half of 25.4 million ha) were managed for C sequestration and biodiversity through the control of all herbivores, then annual sequestration rates could reach between 11.6 and 14 Mt CO(2)-e year(-1) which is between 2 and 2.5% of Australia’s annual emissions. The potential to sequester carbon and improve biodiversity outcomes in extensive semi arid grazing lands will require significant policy shifts to encourage and reward necessary land use change. (C) 2011 Elsevier B.V. All rights reserved.