Climate Change & Carbon Farming
Carbon Credits (Carbon Farming Initiative) Bill, 25 May 2011
Once upon a time in a country far, far away a world leader stood up and discussed three environmental challenges that faced the world: acid rain, the hole in the ozone layer and greenhouse gases. The first, a nation solved through an innovative approach, an approach the member for Flinders championed in his honours thesis. It was a market based approach, which was the same market based approach George Bush Snr put into place, that made companies pay for the privilege of putting noxious gases into the air. The results of market based mechanisms tend to be better than were envisaged by policy makers at the time. Industries put in place innovative solutions to ensure that the economic cost was minimised and the environmental problem was solved.
The second of those problems—the hole in the ozone layer—was resolved through nations being good global citizens, acting in the knowledge that other nations were acting, as well. That process culminated in the Montreal protocol and has seen the hole in the ozone layer gradually shrink over recent decades.
On the last challenge, this leader in a land far, far away, Margaret Thatcher, pledged to make drastic cuts to her nation’s greenhouse gas emissions and set up a centre for research. Thanks to the work of research centres such as the Hadley Centre for Climate Prediction and Research, there is a consensus among climate scientists that dangerous climate change is occurring and that dangerous carbon pollution is the cause. Yet many of those opposite continue to be silenced by those who do not accept the evidence. The Minister for Climate Change has on many occasions put on record the comments of the sceptics opposite. Indeed, yesterday, on the very day the Climate Commission was meeting in this building to outline the scientific consensus, the likes of Senators Joyce and Macdonald were in Senate estimates challenging the Bureau of Meteorology on climate change.
Anthropogenic climate change is of course backed by the Australian Academy of Sciences, the Bureau of Meteorology, CSIRO, NASA, the US National Oceanic and Atmospheric Administration and the vast majority of climate scientists. Yet there are many in the coalition party room who still cannot accept the overwhelming scientific evidence.
If the Leader of the Opposition is the political love child of John Howard and the member for McKellar, then Margaret Thatcher would surely be his political godmother. Yet Margaret Thatcher accepted the scientific evidence for climate change as far back as the 1980s. The UK Conservatives—the role models and political cousins of those opposite—have accepted there is no debate about the science of climate change and the necessity of acting. The British Tories have accepted this. They are using a market based approach to secure the future of Britain and that of the globe. The bill before the House is part of the government’s commitment to act on dangerous climate change to secure our future so that future generations can continue to enjoy our golden soil and wealth for toil.
A creed of the farming sector is to ensure that farmers leave the land in better shape than that in which they inherited it. Our farmers are some of the most passionate advocates for environmental protection. The Carbon Credits (Carbon Farming Initiative) Bill creates opportunities for farmers, foresters and landholders to access carbon markets and help to reduce emissions. We know that Australians are among the highest per capita emitters in the developed world. We also have among the highest agricultural emissions. Protecting biodiversity, helping to regenerate landscapes, improving soil quality through increased carbon storage and helping to address salinity through tree planting are just some of the opportunities available to us.
Some of these things are not new, but this bill will help us to drive innovation, to find better ways of using our agricultural and land assets to reduce our emissions. The bill will help us to create a market for carbon permits and provide investment certainty. Credits will be given for every tonne of carbon stored. Schemes will need to go through an approval process that will ensure the integrity of the abatement being undertaken. We are balancing regulatory simplicity with environmental integrity.
Projects will need to be recognised. The offset methodology will need approval. Projects will need to be done in accordance with the approved methodology and any other eligibility requirements. Once project managers have reported on the projects, they will be issued with Australian carbon credit units, or ACCUs. These units can be used to offset emissions or can be traded on the market. To ensure the integrity of the abatement, an expert committee, the Domestic Offsets Integrity Committee, has been established to make sure we get real and verifiable abatement.
Other elements of the design of the scheme to ensure the integrity of credits include issuing credits after the sequestration or emissions reduction has actually occurred; tracking credits through a central national registry—that is included in the registry bill; transparency provisions, including the publication of a wide range of information about approved projects; appropriate enforcement provisions to address noncompliance; and a robust auditing scheme based on the National Greenhouse and Energy Reporting System.
The scheme, not surprisingly, has received backing from a range of organisations. CSIRO experts told the House of Representatives Standing Committee on Climate Change, Environment and the Arts looking at the bill:
‘… industry and community individuals and groups as well as the private sector have much to offer in terms of innovative ideas on greenhouse gas abatement.’
Carbon Neutral said:
‘This initiative has the potential to drive funding into rural communities, increase green collar jobs and improve the natural environment whilst simultaneously contributing to domestic climate change adaptation and mitigation measures.’
Greenfleet, who have established 450 forests and planted more than 6.8 million native trees since 1997, said:
‘We believe that carbon forestry projects are unlikely to displace high-value agricultural production on the nation’s most productive soils. We believe that carbon forestry projects are and will remain peripheral to prime agricultural production and in fact may improve, but not replace, sophisticated farming systems.’
The scheme is also backed by the Wentworth Group of Concerned Scientists, named after William Wentworth, whose name seems to crop up quite frequently on the science based side of the climate change debate.
Today the Minister for Agriculture, Fisheries and Forestry and the Parliamentary Secretary for Climate Change announced that Indigenous land managers across remote regions will be able to earn carbon credits through improving fire management under the government’s carbon farming initiative. The methodology is a world first and represents a unique combination of traditional Indigenous ecological knowledge, cutting edge modern science and the substantial economic potential that is emerging in carbon markets as governments around the world take action on climate change. This world action is also reflected in part of these bills today. The Australian National Registry of Emissions Units Bill 2011 is part the government’s commitment under the Kyoto protocol. The registry will help ensure accurate accounting of emissions, consistent with the Kyoto protocol.
But those opposite continue to deride action on climate change. They miss the fact that the world is moving. They miss the fact that 32 countries now have emissions trading schemes. They miss the fact that India and China, despite having far lower emissions per capita than Australia, are making substantial investments in renewable energy. They miss the fact that the UK, as part of the European Union, is engaged in emissions trading.
At the same time, we are listening to the economists just as we are listening to the scientists. We are recognising the benefits of market based mechanisms over command and control. I think it is often recognised in this place that there is an overwhelming consensus among scientists, but the overwhelming consensus among economists is sometimes missed. I quote from two senior economics professors. John Quiggin wrote in his blog on 10 May:
‘I had a call from a local business organization asking if I would talk at a breakfast about the carbon tax to be held in a few weeks. The date was fine, so I said yes, then came the kicker—they wanted an economist on each side of the issue. The organizer said they had plenty of economists willing to speak for the tax, but they couldn’t find any willing to speak against it. I gamely offered to present the case for an emissions trading scheme as opposed to a tax (even though, at the moment, I lean to a tax). But they wanted an actual opponent of any kind of carbon price, who was also an economist. This has proved to be impossible, which is pretty impressive testimony to the quality of the Queensland economics profession, and to the underappreciated fact that economists are among the strongest supporters of good environmental policy.’
Joshua Gans, currently at Melbourne Business School and now moving to the University of Toronto—Canada’s gain and Australia’s loss, I have to say—wrote on the website of The Drum on 7 April:
‘Sadly, there are plenty of people who aren’t climate change scientists who are comfortable disbelieving the general consensus from climate change scientists.
‘But perhaps it is more disturbing when people—especially politicians—ignore or deny the evidence on how to actually achieve lower emissions. Why is that more disturbing? Because it could be that politicians want to actually reduce emissions but instead advocate policies that are likely to do the opposite.
‘Of course, when I am talking of advocating opposite policies I am talking mainly, but not exclusively, of the Federal Opposition. What they want to do is take direct action. It’s not big on specifics but it will cost a lot of money ($10 billion plus) and will award that money to people who claim they are going to do good things in reducing emissions.’
Joshua Gans goes on to say:
‘It is ironic that on climate change policy, politics are in the bizarro-world where the supposedly anti-market Greens side with Hayek while the supposedly pro-market Coalition sides with Lenin. The economic evidence strongly suggests that the Greens policies match their goals while the reverse is true for the Coalition. I can’t parse the dual hypotheses that either the Coalition just deny economic evidence or that they actually want more emissions and handouts to business. Perhaps one of their number can enlighten us.’
Finally, I want to go to the amendment moved by the member for Flinders. As I have noted in my speech, the government’s legislation will create new, real and lasting economic opportunities for regional communities. Stakeholders in the land sector are desperate for a mechanism to credit their actions to reduce and store carbon pollution. Farmers and landholders want access to carbon markets worth hundreds of millions of dollars each year for regional and rural Australia. But the coalition are currently holding them back.
With the amendment moved today, the member for Flinders has essentially told farmers that the coalition wants to delay the farmers from receiving benefit. He is signalling that the coalition would rather play politics than support farmers. Farmers and landholders want politicians to end the gamesmanship so that they can know the framework that they will be working under. They want us to resolve the detail and put in place a framework that measures the savings that they are making.
There has been extensive consultation on this initiative over a number of years. It builds on the work of other offset mechanisms. Let us look at what key groups like the National Farmers Federation submitted to the House inquiry. They said that the legislation addresses NFF concerns around potential perverse outcomes in relation to food production, water, local communities, environment and biodiversity as well as reduces some of the uncertainty and administrative costs surrounding crediting periods, reporting timeframes and offsets compliance. They said that the government deserves credit for listening to the farm sector and modifying its proposals to ensure that genuine abatement opportunities under the CFI are not unnecessarily overlooked.
The CFI is based on the science of climate change but developed with a key focus on practicality. The department is releasing over the next few weeks a number of the first detailed methodologies showing in practical terms how particular landholders can put projects together. We have been consulting extensively on the regulations to establish the positive and negative lists. We will be providing details of those lists shortly. The regulations deal with technical matters required to be based on independent advice from the Domestic Offset Integrity Committee. It is essential to the credibility and value of the offsets credit that are created by the initiative. The coalition’s amendment is for a scheme in which the activities added and credited are based on politics, which appears to be the preferred approach advocated by the coalition, rather than science. That approach has not credibility in carbon markets and no credibility in the community. The government calls on the coalition to stop playing politics and to support the government’s efforts to reward farmers who are taking action on climate change.
In closing, I note the sad fact that, as scientists often note, climate change can be dominated by tipping points—sudden moments like the melting of polar icecaps, at which point the progress of climate change, the warming, becomes more rapid. Perhaps the best example of a tipping point was, alas, the Leader of the Opposition’s one-vote ousting of the member for Wentworth as the Leader of the Liberal Party in 2009. That tipping point moved us from a path on which the coalition were, as they had been in the 2007 federal election, advocating market based mechanisms supported by sensible conservatives around the globe. That moved us into a bizarro world in which the current Leader of the Opposition advocates command and control policies, policies unsupported by serious scientists or serious economists. That tipping point has left the Australian debate over carbon pricing in a world that is well adrift from what you see in mainstream debates all around the globe. Even when I go into schools in my electorate I find young children in Australia deeply concerned by the lack of willingness to act on climate change and deeply concerned at the fact that at the moment carbon pollution is free and that the opposition is attempting to block the government’s sensible and practical move to put a price on carbon pollution.