Carbon credits, carbon price and carbon farming - Key details of the Opposition’s climate and environmental plans
30 April 2013
The Shadow Minister for Climate Action, Environment and Heritage, the Honourable Greg Hunt MP attended McCullough Robertson’s offices yesterday to outline the Coalition’s carbon emissions policy at a forum and lunch arranged by our Carbon Services Team and attended by over 100 of McCullough Robertson’s clients in the resources, agribusiness and energy sectors.
Repealing the Carbon Tax
While the Opposition’s promise to repeal the Carbon Tax has been public knowledge for some time, the impact of its proposed alternative ‘The Direct Action Plan’ on business and plans to expand schemes such as Carbon Farming Initiative are only just becoming clear.
Mr Hunt said that, if elected, the Coalition will attempt to abolish the Carbon Tax and repeal the related legislation and mechanism within six months while implementing an incentive scheme called the Emissions Reduction Fund, which he believes will deliver real emissions reductions as well as benefits for Australian business. However, he acknowledged the need for Senate’s support in achieving this outcome.
Further, the Coalition would abolish the Climate Change Commission, the Climate Change Authority, the Clean Energy Finance Corporation and the Energy Security Fund and bring the relevant functions in house under a merged Climate Change and Environment Department.
Expanding the Carbon Farming Initiative
The Carbon Farming Initiative would be expanded to include a wider range of emissions reduction methodologies, including those that have been approved internationally (with modifications for local conditions where required).
The Coalition believes that widening the scope of methodologies and improving the approval process will encourage industry and provide even more opportunities for our clients in both the resources and the food and agribusiness sectors to participate, collaborate and benefit from abatement programs.
Under a Coalition government, the Clean Energy Regulator would be responsible for approving methodologies and ensuring that emissions reductions are genuine and verifiable. The Government will pay for abatement once delivered, with contracts providing security for proponents. Methodologies approved to date will be maintained and registered projects will be continued.
The big difference is the that a Coalition government would unblock the approvals process, create a 25-year option for land-based sequestration and broaden the range of methodologies to include all forms of abatement such as cleaning up power stations and improving energy efficiency.
Building on the National Greenhouse and Energy Reporting Scheme
The Coalition would continue to use the existing National Greenhouse and Energy Reporting Scheme (NGERS) as the key reporting system for Australia’s emissions and create a single national reporting scheme, cutting red tape and the requirement to duplicate reporting to both the federal and state governments. Additionally, the NGERS would be used to calculate the basis for ‘business as usual’ levels and integrated into the Coalition’s Direct Action Plan.
Introducing the Direct Action Plan
The Shadow Minister said the Coalition remains committed to reducing Australia’s emissions by 5% by 2020 and will reach this target by implementing their Direct Action Plan – a “low touch” market mechanism will reduce emissions and improve the environment without creating hardship for business. On the contrary, Mr Hunt said the Coalition’s approach aims to encourage new development and investment and support important employers such as the manufacturing sector to remain in Australia.
Mr Hunt discussed that under the Direct Action Plan a financial penalty would be imposed on businesses that ‘go rogue’ and do not conform to ‘business as usual’ levels. He added that this would be based on best practice standards for emissions reduction. Alternatively, businesses would be rewarded for effective emissions abatement through the Coalition’s Emissions Reduction Fund.
Mr Hunt noted that many of the finer details, including in relation to the financial penalty, would be released after the election and subject to industry consultation.
Our expert Carbon Services Team, experienced in land access, government, agribusiness, energy and resources are available to assist you and support your business, whether you are dealing with the current framework or preparing to operate under the proposed changes. With a federal election imminent it is important that you consider the implications and opportunities early in order to maximise the benefits to your business.
For more information contact Kate Bartlett on +61 7 3233 8632.
About McCullough Robertson
McCullough Robertson is a leading Australian independent law firm with industry specialists combining legal expertise with deep industry knowledge and foresight. The firm provides innovative, relevant and commercial legal solutions to major corporate, government and high net worth individuals across Australia and internationally. Established in 1926 the firm’s major focus areas are the resources (mining and energy), food and agribusiness, technology, telecommunications, health and life sciences (pharmaceuticals), real estate and financial services sectors.