Coalition Senators' Dissenting Report
The Coalition is strongly supportive of the practice of storing
carbon in our soils and landscape.
A Coalition Government will implement a climate change strategy
based on direct action to reduce emissions and improve the environment.
Direct action on soil carbon will be the major plank of our
strategy, supported by other direct action measures that will reduce CO2
emissions by 5 per cent by 2020 based on 1990 levels and deliver significant
environmental outcomes – without the need for a great big new tax.
To facilitate direct action, a Coalition Government will establish
an Emissions Reduction Fund to support CO2 emissions reduction
activity by business and industry.
Through the Fund, we will support up to 160 million tonnes of
abatement per annum by 2020 to meet our 5 per cent target. This is a once in a
century replenishment of our soil carbon.
Significantly
improving soil carbon also helps soil quality, farm productivity and water
efficiency, and should be a national goal regardless of the CO2
abatement benefits. Through the Emissions Reduction Fund a Coalition Government
will commit to a ‘once in a century’ replenishment of our national soils and
farmlands.
As has been
previously indicated, the Coalition is committed to ensuring the right plantings
are in the right places, for the right reasons.
The government’s
Carbon Farming Initiative is yet another piece of government policy that is
being presented to the Parliament well before the finalisation of its design.
Just as we have
seen in so many cases over the last four years, defects or critical elements of
the program remain either uncertain or require extensive negotiation to ensure
a satisfactory legislative outcome.
The Coalition
expresses significant concern that we are being asked to consider this
legislation before a decision has been made on the detail of the operation or a
carbon tax or emissions trading scheme. There would be vast differences in the
operation of this legislation under a carbon tax or ETS as opposed to a
voluntary market. The Parliament should be given the opportunity to properly
assess this legislation in the full context that it will ultimately operate.
The Coalition
expresses significant concern that information critical to the analysis of the
potential effectiveness of the legislation was not available to the committee
and would not be within the timeframe that the government has specified for the
passing of the legislation.
The principal areas
of concern for Coalition Senators include:
-
Research relating to potential land use change being conducted by
ABARES and CSIRO not available to the committee for hearings, and in the case
of the ABARES work possibly not until after the government wants the
legislation passed.
-
Negotiations with NRM groups whose regional plans are to play a
critical role in the management of the legislation have not commenced.
-
Unresolved design of Positive and Negative lists.
-
Conflicts with state sovereignty and Indigenous Land Rights.
-
Definitions of Permanence.
-
Definitions of Additionality.
-
Risk of reversal ratios.
-
The substantial details that will form the regulations that are
yet to be presented.
Some of the
Coalition’s concerns relating to the above have been discussed in the majority
report, additional comments or dissenting views are considered below.
Coalition Senators
dispute the assertion in the majority report that there was broad support for
the bill during the inquiry.
The Coalition does
not consider it prudent to pass this legislation while so many critical aspects
of the legislation remain unresolved.
ABARES and CSIRO
Reports
Coalition Senators
were concerned that to be able to assess the potential impacts on the landscape
from the proposed legislation, however ABARES and CSIRO were unable to advise
the committee when the reports would be available.
We note that the
CSIRO document was released to the committee on 26th May (the day
before reporting) and the release of the ABARES report remains at the
discretion of Treasury.
NRM Groups
As acknowledged in
the majority report, Coalition Senators note the variance in governance
structure of regional NRM groups but also the significant variation in the
structure of their regional plans.
We note that
under-funding of these groups in recent years by the Rudd/Gillard government
has exacerbated the difficulties faced by NRM Groups in meeting their
priorities.
Without details on
the method of interaction of NRM Regional plans with the initiative it is very
difficult to genuinely assess how functional this process will be.
It is obvious that
there will need to be modification to existing regional plans, however the government’s
priorities for this process are not evident and negotiations with NRM groups
are not due to be completed before the government wants this legislation passed.
Coalition Senators
are concerned that the proposals in the Carbon Farming Initiative have the
effect of making regional NRM Groups pseudo planning bodies, a function that
they are in no way equipped (structurally or financially) to assume.
It is also highly
likely that without adequate consideration and consultation, this mechanism has
the potential to lock farmers out of participation in the CFI based on
decisions of their regional groups.
We note Recommendation
6 in the majority report and consider that finalising these requirements, as a
minimum, should be completed before passing this legislation
Positive and Negative Lists
The real effect of
this legislation and the eventual effectiveness in sequestering CO2
will be materially impacted by the development of these lists.
Again during the
hearing concern was expressed by witnesses as to the uncertainty surrounding
the elements to be included on the lists.
The development of
definitions, such as "Common Practice", need to be resolved as they
impact on the potential for the CFI to be effective.
The lists are also
a potential Trojan horse for the introduction of measures that are not
currently common practice but are the subject of much community debate currently
and would be best resolved outside this process.
Coalition Senators
require this process to be completed to the stage of publication of the initial
lists prior to passing this legislation
State
Sovereignty/Indigenous Land Rights
Representations from
the Premier of Western Australia and Indigenous communities highlight the risk
that this legislation could become the centre of a Native Title conflict, a
circumstance the Coalition is anxious to avoid.
Again this is a
matter that should have been resolved prior to the presentation of the
legislation to the Parliament. Given the current conflicting views, Coalition
Senators believe that satisfactorily resolving this conflict should be a
prerequisite of passing this legislation.
Definitions of
Permanence
Several witnesses
questioned whether the CFI would be effective in achieving the objectives of
the government in sequestering significant quantities of carbon, with the Carbon
Farmers of Australia and the Carbon Farming and Trading Association describing
the permanence provisions "the deal killer" and even strong
supporters of the CFI, CO2 Group Ltd, expressing concern at the difficulty the
provisions presented for his company.
Witnesses gave
examples of variable timescales of permanence available under existing
voluntary schemes, whereby credits can be purchased for 20, 25 and 30 year time
frames:
Mr Kiely—Permanence is the
deal killer. No farmer would be silly enough to agree to 100 years for soil
carbon or 100 years for anything. A finance lender would want to know seriously
the impact on the value of the property of agreeing to such a thing. We did
some research into the 100 years thing and discovered it was a policy decision,
not a scientific measure. In some of the peer reviewed literature, we came
across this proposition about avoided emissions—which are unquestioned; if you
buy alternative energy, you are apparently substituting for burning a tonne of
coal. Someone selling abatements for avoided emissions is not asked to
guarantee that that tonne of coal will not be burnt any time in the next 100
years. It could quite possibly be; in fact it will be...We believe that 100 years
is a perverse outcome. The result is said to be necessary so buyers can be
confident they are getting value—that is, genuine abatement—so they get
nothing. There is nothing available for them. We have found examples where the
IPCC and the Verified Carbon Standard have allowed other periods of time
recently—20, 25, 30-odd years.
We believe we could work within
that sort of time frame.
Representatives of
Australian Forest Products Association also questioned whether there would be
significant uptake from the initiative:
Mr Stanton—It is our
considered view that the Carbon Farming Initiative, as detailed in the
legislation, is unlikely to attract the interest of commercial plantation
growers and therefore it will not realise a substantial, low-cost carbon
storage opportunity.
Mr Hansard— The forestry
and forest products industry can make a significant contribution to climate
change mitigation given the right policy framework. However, given the proposed
design of the Carbon Farming Initiative, there remain significant impediments
for the realistic uptake of the wider forest industry for carbon sequestration,
particularly for commercial timber products, as Richard has just said.
It is the view of the Coalition
Senators that the government is misleading the farming community about the
opportunities that might exist under the CFI. In its current form it is more
about creating unacceptable risk for farmers than any chance to benefit.
Definitions
of Additionality
Again,
the lack of developed definitions supporting the legislation, hinder the
opportunity for Senators to adequately consider the practical operation of the
CFI.
The
uncertainty surrounding the application of the "common practice" test
to existing farming techniques was a matter of concern for a number of
submitters, in particular in relation to the potential to penalise early movers
and farmers who were operating under farm management plans.
Coalition
Senators expect that these definitions be formalised prior to supporting the
legislation.
Risk
of Reversal Buffer
Coalition
Senators are concerned that the risk of reversal buffer setting is too rigid
and should have capacity for variance in accordance with the risk associated
with the relevant form of sequestration being considered under a particular
plan.
The
risks of reversal can vary based on region and will vary from sequestration in
soil, varying farming techniques to tree plantings and also based on project
scale.
Coalition
Senators believe that the CFI should be amended to provide for appropriate risk
of reversal rather than the proscriptive approach in the legislation
Conclusion
The
Coalition does not consider it prudent to pass this legislation while so many
critical aspects of the legislation remain unresolved including the crucial
details that form the regulations.
Senator Richard
Colbeck
Liberal Party,
Tasmania
Senator Mary Jo
Fisher
Liberal Party,
South Australia
Senator Simon
Birmingham
Liberal Party,
South Australia
Senator
Fiona Nash
The
Nationals, New South Wales
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