What we told the Senate

Extracts from Carbon Farmers of Australia and the Carbon Farming and Trading Association (CFTA), Submission and Evidence appearing before The Senate Environment and Communications Legislation Committee in Inquiry into the Carbon Credits (Carbon Farming Initiative) Bill 2011 May 2011

2.12 To prevent progressive farmers from being penalised for practices they currently use to sequester carbon, the CFTA recommended farmers be eligible for credits for carbon they create in addition to a baseline, irrespective of the method(s) they use to do so.12 Mr Michael Kiely, Chairman of the CFTA, was careful to point out, however, that farmers 'should not be rewarded for what they are sitting on; they should be rewarded for what they create'.

2.43 For the CFTA, the permanence provisions were 'the deal killer'.44 Mr Michael Kiely, Chairman of the CFTA, stated: 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...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.

2.57 Interestingly, Mr Michael Kiely of the CFTA believed '[t]he idea that fire and drought will destroy soil carbon has been very much overplayed by the science community'.60 Mr Kiely explained that two Australian carbon farmers of his acquaintance had 'increased their soil carbon by two and a half and three [percentage points] in the last 10 years, which was probably the worst 10 years that we have had, with the drought'.

3.8 Mr Michael Kiely, Chairman of the Carbon Farming and Trading Association (CFTA), highlighted numerous co-benefits associated with soil carbon sequestration and farming including:

¥ Greater yields and improved yield stability;

¥ Greater resilience to drought;

¥ Better cycling of nutrients;

¥ Increasing land value due to improvements in environmental quality;

¥ Cleaner and more reliable water supplies;

¥ Reduced flooding due to better water retention and slower run-off;

¥ More secure food and water sources;

¥ Reduced incidence and intensity of desertification;

¥ Increased soil biodiversity;

¥ Reduced soil erosion; and

¥ Reduced water pollution from pesticides and fertilisers.8

3.9 However, the Carbon Farmers of Australia and the CFTA were concerned that '[d]espite its potential role as a bridge to a low carbon future and all the co-benefits, Soil Carbon Solution faces institutional barriers to being traded as an offset'.9

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 beÉWe 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.

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