Tuesday, November 24, 2009

Initial Response to Minister Wong's Offer

This offer from the Government is either a winning first division Lotto ticket or a notice of foreclosure - it is all in the details. The mailed fist in the velvet glove. So far these are just words on paper. It's not what is on paper that will determine our fates, but what is in Penny Wong's heart. How she will interpret those words.

"Agriculture excluded ... indefinitely from the CPRS". This means that Agricultural enterprises will not be subject to the 'cap and trade' system - which is a compulsory emissions reduction scheme that applies to the top 1000 emitters in our economy and which covers 75% of national emissions. Leaving Agriculture out is not a curious development: no other sector of small to medium size enterprises was targeted for inclusion. The floor for entry into the cap-and-trade system is 25000 tonnes/year.

Even if set in stone in legislation, it is an easy thing for this Government or a new one to change the deal: The Wong Offer Document admits this point: "The Government makes a policy commitment to exclude agriculture... The Government will amend the CPRS bill to explicitly exclude agriculture emissions from the scheme: – this means that a future act of Parliament would be required to reverse this decision, providing additional certainty to the sector." How hard is it to pass a BIll and reverse the decision?

When Agriculture was left out of the CPRS, it was never going to be "business as usual". Those emissions have got to come down some other way. Using an Big Brotherly tone, the paper promises that "The Government will work with industry to: • monitor world‟s best practice in reducing agricultural emissions and consider a range of ways in which the agriculture sector can contribute to the transition to a low-pollution economy; and • introduce voluntary emissions reporting trials in 2011 to allow the sector to better understand and manage its emissions." To keep us all honest the Productivity Commission will review the industry in 2015 to see "whether the sector is at world‟s best practice mitigation and an examination of the potential measures to achieve this." There is no escape.

But there's a lot of carrot: credits for emissions reductions. "The Government will introduce amendments to provide for crediting of abatement from agricultural emissions ... that are counted towards Australia‟s international climate change obligations...'.

THERE IS a poison pill in the deal, as we predicted when the negotiations started. The offsets must "meet internationally accepted principles of permanence, additionality, measurability, avoidance of leakage, independent audit and registration" - which, under the distorted Kyoto Rules, will never be workable. The Copenhagen Solution must be accepted or this offer is a charade.

The Government is to appoint "an independent expert committee ... to vet offset methodologies and recommend robust methodologies". It will accept or reject recommendations, but it promises not to tinker with them. Anyone can submit a standard or methodology to this committee which will become a focal point (taking the heat off the Department and the Minister. It is a tacit admission that the Department does not have the smarts to do this kind of work - hence no Voluntary Standard yet.)
The independent expert committee will be very busy - it will approve projects and credit abatement from commencement of the CPRS; it will set the ground rules - including monitoring, reporting, record-keeping, auditing and enforcement; and allow new sources to be included once they are "recognised in Australia‟s international commitments."

• CPRS credits will be given for emissions reductions "that are counted towards Australia‟s international commitments" and that are covered by "robust methodologies". These include: methane from livestock and manure management, reduced N2O from more economical fertiliser use, the burning of savannas by traditional owners, burning crop trash, rice cultivation , avoided deforestation, a new term called " legacy waste".
No soil mentioned in the CPRS system because of the absurd Kyoto Rules (in section 3.3 and 3.4) that say any country wanting to claim carbon has to count emissions caused by 'acts of God", not humanity - another piece of Kyoto madness. Our Government "will continue advocating" for an end to this lunacy. While we can't play in the big sand pit, the Government will build a smaller one - it will promote voluntary market offsets by implementing a National Carbon Offset Standard (NCOS). This will provide scope for a market for abatement from "agricultural soils (grazing and crop land management), including biosequestration through soil carbon and biochar; and non-forest revegetation and vegetation management."
The plan is to transition to the CPRS market once the 'accountants who are deciding the world's fate' realise what's at stake. (Prime Carbon should send the Department a Bill for policy development work.)

NCOS methodologies would be assessed by the same expert independent expert committee, further adding to its workload.
The question arises: who is "independent" among experts and what is an 'expert'? Will it be a committee full of science, chasing the min-min light of exactitude. Or will it include market and commodity economists, and when will the buyers get a turn?

As a footnote, there is a few million for (more) research into measurement and just as much again for 'stewardship and biodiversity' projects. It is to be hoped that there is some sort of strategy behind all this. It all looks and feels like there isn't.

Payment for farming in a less exploitative manner has been a long time coming. It acknowledges that farmers were not soley responsible for degrading the landscape. Out market economy has conspired to pay less that fair value for produce while our society has enjoyed the luxury of cheap products, at the same time demanding the producer go easy on the soil. Soil carbon credits are the logical way to redress the imbalance while the reconstruction of the natural resource base is underway. How we avoid returning to the same perverse system of market failure and destruction is yet to be seen. But paying farmers to exercise their skills in conserving and encouraging Nature to be bountiful must become part of our culture if our civilisation is to continue to be so described.

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