MELBOURNE City Council could invest in Tasmanian forest plantations protected from harvesting in an effort to become Victoria's first carbon-neutral council.
The council voted last month to achieve zero carbon emissions for this financial year by spending money on international carbon offset programs.
The council is looking at investing in Chinese wind farms, the use of more efficient fuels in South America, and Tasmanian anti-deforestation projects, facilitated by forestry carbon development business, Redd Forests.
A FutureMelbourne committee report listed the Tasmanian option as one of the more viable options against the national carbon offset standard but one of the least cost-effective.
The council has opened a $600,00 tender for the plan and a decision will be made by the council in July.
Eco-city chairwoman Cathy Oke said the council was looking to invest on projects within Australia rather than overseas.
She said no applications had been made for any Tasmanian deforestation projects yet - the largest of which is a 7600-hectare project in the Central Highlands.
Ms Oke wanted to distance these deforestation projects with environmental campaigns calling for better protection of Tasmanian public native forests, adding that these projects were privately owned, mostly by farmers.
Redd Forests managing director Steven Dickie has previously said that Tasmania was a good option for carbon trading because of the already established forestry industry.
Mr Dickie said five Tasmanian properties had registered with Redd Forests and another eight would soon be registered with the international scheme.
Premier Lara Giddings suggested the council could also look to switch to Hydro Tasmania's mainland retailer, Momentum, and replace the city's reliance on coal-fired energy with Tasmanian green energy.