Friday, April 06, 2007

NFF comes up trumps on trading

The National Farmers' Federation has come out against a carbon tax and in favour of soil carbon credits.

In a submission to the Prime Minister's taskforce on emissions trading, president David Crombie said the NFF favoured a national emissions trading scheme. Farming had the potential to sequester emissions, he said. Carbon sequestration could be done through management of livestock, fertilisers, vegetation and soil.
Mr Crombie also opposed a carbon tax. Any additional impost on farm inputs and outputs would increase production costs and make agriculture less competitive in overseas markets, he said.

Mr Crombie pinged the Prime Minister for his boasting claim that Australia would meet its Kyoto obligations.** The NFF said farmers' efforts in curbing land clearing had enabled Australia to largely meet its commitments under the Kyoto Protocol. He said that these emission cuts were valued at $500 million* but the cost had been borne by farmers — an "enormous inequity", he said. Farmers also planted 20 million trees each year. Any policy should provide "full recognition of this annual contribution by the farm sector", he said.

The NFF also took aim at 'forests' or tree plantations. Mr Crombie said limits should be placed on carbon offsets for large-scale tree plantations in high rainfall areas. Any developments should be subject to full planning consent, including water impacts, he said.

*Carbon trading industry sources have valued the foregone clearing at $1.8billion.

**This is not true. Demand for energy has pushed Australia well past its target emission limit which itself was set very favourably by the Kyoto negotiators seeking to get Australia to support the scheme.


Agmates said...

G'day Michael,
It's great to see the NFF finally get its act together on trading soil carbon credits. As you know Agmates through it's lobbying of the NFF has had a lot to do with getting this to happen.
I see we even have the Rural press running stories and interviewing Federal agriculture Minister Peter McGauran about it.
Mate I'd I'd like you to explain what you mean in the last 2 paragraphs of your blog.
"Carbon trading industry sources have valued the foregone clearing at $1.8billion."
Agmates in a recent blog estimated the value at between $1.95billion and $5.4billion based on the 78million tonnes aof carbon not emitted by the banning of land clearing.
This is based on the Governments own report commissioned for the Prime Ministers Task Group (which is who the NFF have made their submission too, as mentioned in your article.)
That report to the government estimates of the value of a single tonne of sequestered tradable carbon at $25-$70 per tonne.
It's your last paragraph that has me mystified? You say "this is not true". Please tell me why it isn't?
Cheers mate,
Your Agmate - Steve

Michael Kiely said...


Hi. Good to see your fine work harassing the powers that be is paying off!. Congratulations. We presented the soil carbon case to Mr Crombie in August, 2006 and he was enthusiastic then. Re your questions, On Ƒeb 11. I blogged under the head;line "Farmers to be robbed again?" the following:

"Australia’s National Greenhouse Gas Accounts show that farmers, by reducing land clearing rates since 1990, offset significant increases in greenhouse gas emissions, the conservative value of these reductions is $10.8 billion in credits, according to the Australasian Emissions Trading Forum. But Federal Government policy prevented farmers converting these reductions into tradable credits."

In fact the figure was given twice in the AETF source item, once at $10.8bn and once at $1.8bn. I used the first figure but Louisa and I felt uncomfortable about it and have used the second figure since. The reason is this: it's not the tonnage of carbon it's the tonnage of carbon dioxide (calculated at 3.67 the tonnage of carbon) that is the traded figure. So the price for carbon must be discounted (divided) by 3.67 to arrive at the price for carbon dioxide. This was unclear in the source item.

The second reason why I favour the smaller figure is that the larger figure is bullshit. No one is paying $75 a tonne for anything on the open market. (The Rio Tinto deal in WA is completely artificial, for the purposes of trials.) The only deal we know of for forgone clearing of vegetation was a trade for permits on 1m acres in QLD which went for $1m, bought we are informed by the same Rio Tinto. Now a dollar an acre is the lowest price I have heard anywhere for carbon or carbon dioxide. But it sets the benchmark for such transactions at volume. There are unlikely to be anymore.
Further to your enquiry on Howard's claim to be meeting Kyoto obligations, I found an Australian Greenhouse Office report for May 2006 which said that Australia would be 7million tonnes higher than target. Reasons given by the AGO were 1. increased power generation due to price declines in plasma TVs, computers and air conditioners, and 2. minimum energy performance standards appliances and buildings not delivering abatements expected. The AGO projections for 2020 have us more than 38mt over the target. Reason: Electricity Generation.

Cheers! ANd "Onwards!"