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25 Jan 11
Federal Government carbon initiative - submissions on consultation paper by early February

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One of the legislative changes on Prime Minister Gillard’s radar at the moment is the carbon farming initiative. A consultation paper has been released for public comment for a couple of months and submissions were due to close on 21 January 2011.

We believe that the consultation paper has not received the attention it deserves, given the circumstances in Queensland and elsewhere in the country. We have made some phone calls and understand that we have helped secure an extension through the Minister’s office until early February. In brief:

  • the initiative would create tradeable credits accessible to the agricultural industry through certain carbon abatement activities
  • there is scope for both domestic and international buyers of the credits under the initiative. The domestic market would be more likely to ramp up following an introduction of carbon pricing legislation
  • the initiative would set integrity standards that carbon abatement activities would need to comply with in order to attract credits. The activities must:
    • be ‘additional’ - if a project would have occurred anyway it will not be covered
    • be ‘permanent’ - carbon storage activities always suffer a risk of reversal and the consultation paper sets out various ways to manage this risk, and
    • account for ‘leakage’ - material increases in emissions directly attributable to the abatement activity itself
  • the scheme is likely to apply to the following carbon abatement activities:
    • reforestation and revegetation
    • reduced methane emissions from livestock
    • reduced fertiliser emissions
    • manure management
    • reduced emissions or increased sequestration in agricultural soils
    • savanna fire management
    • avoided deforestation
    • burning of stubble/crop residue
    • reduced emissions from rice cultivation, and
    • reduced emissions from landfill waste deposited before 1 July 2011.

If you are a landowner with potential ability to carry out carbon abatement activities, you are likely to require clarity on whether or not the scope of the initiative set out in the consultation paper will cover your activities. For example, if you are not certain about issues like the ‘additionality’ or ‘permanence’ of your potential activities (common grey areas in carbon abatement proposals), then this is a matter that may require clarification and you should consider submitting your concerns to the Department of Climate Change.

We will be passing some comments on the consultation paper to the Department and can incorporate your comments into our feedback, or alternatively we would be happy to prepare a submission on your behalf if you have particular concerns. An area we have some concerns about is a concept raised by the consultation paper that certain offset methodologies may ‘cease to be "additional" during their lifetime, for example because the project activity may become common practice’. In our view, abatement arising from investment in an activity that follows an appropriate methodology at the time of implementation should be recognised as ‘additional’ throughout the life of the project. The current proposal seems to discourage long term investment, which we consider to be counter-productive.

Please let us know if you would like detail on the initiative, or else refer: http://www.climatechange.gov.au/government/initiatives/carbon-farming-initative.aspx

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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