It is predicted the Federal Government could see a $7 billion windfall from Tasmania's forestry peace deal.
The chance for the windfall comes after the Commonwealth committed $300 million to the deal which reduces native forest logging.
Climate law expert Andrew MacIntosh, from the Australian National University, believes the deal could raise billions for the Commonwealth through international carbon credits.
He has told Radio National that new rules come into effect when Australia signs the second commitment period of the Kyoto Protocol.
"The one that's relevant here is that any reduction in native forest harvesting below the levels in the 2000's results in the Australian Government getting credits," he said.
He says the Commonwealth credits can then be auctioned for more carbon units in the emissions trading scheme.
Under the deal to end forestry conflict, 500,000 hectares are flagged for reserve.
Mr MacIntosh says the Tasmanian Government is likely to miss out on any money.
"In this case, I'm concerned that so much has been focused on what does the industry want and so much has been focused in what the green groups want in terms of lines on the maps in order to preserve areas, that the Tasmanian Government has not paid sufficient attention to what is the main gain here; and that is the carbon credits." Tasmania's Climate Change Minister is uncertain about the exact benefits that will flow from any carbon credits earned from the peace deal.
Cassy O'Connor says Mr MacIntosh is wrong, but conceded there was no guarantee money would flow to the State Government.
"Well there's no guarantee, that's true," she said.
"But Mr MacIntosh is absolutely wrong because if he looks at the Tasmanian Forests Agreement legislation, it's very clear that we are seeking to capture the carbon benefit of forests protected under the Inter-Governmental Agreement.'' "And the reason that we included it in the legislation, was on advice from the Commonwealth." The forestry peace deal legislation still needs to pass Tasmania's Upper House.