Government invites your ideas on what replaces the Price On Carbon/Carbon Tax

NB. THIS IS AN INVITATION FROM GREG HUNT, MINISTER FOR THE ENVIRONMENT

The Government invites public comment on the Terms of Reference on the design of the Emissions Reduction Fund.

The Emissions Reduction Fund (the Fund) is a central element of the Australian Government’s Direct Action Plan, providing incentives for emissions reduction activities across the Australian economy. Through the Fund, the Government will purchase low-cost abatement through reverse auctions - an 'abatement buy-back'.

The Terms of Reference have been released by the Government to assist interested parties in making submissions on the design of the Fund. Submissions in response to the Terms of Reference will inform the development of a Green Paper setting out the Government’s preferred options for design of the Fund in December 2013 and a White Paper in early 2014 outlining the final design of the Fund.

The Government welcomes comments on any aspect of the design of the Fund, including views on potential sources of low cost abatement, and on key design features such as auctions, baselines and contract arrangements.

Submissions close 5pm (AEDT) Monday 18 November 2013. The Terms of Reference, submission cover sheet and template are available on the Department’s website at http//www.environment.gov.au/emissions-reduction-fund.

The Emissions Reduction Fund (the Fund) is the centrepiece of the Australian Government’s Direct Action Plan. The Fund will work together with other incentives under the Direct Action Plan and the Renewable Energy Target to help meet Australia’s target of reducing emissions by 5 per cent below 2000 levels by 2020.

Through the Fund, the Government will purchase low-cost abatement through reverse auctions - an 'abatement buy-back'. The Fund will provide incentives for abatement activities across the Australian economy and work in conjunction with the Carbon Farming Initiative. The Fund will have an initial allocation of $300 million, $500 million and $750 million over the forward estimates period.

Community input will be invited on potential sources of low-cost abatement and on key design features such as auctions, baselines and contract arrangements.

Emissions Reduction Fund - Terms of Reference October 2013

INFORMATION FOR RESPONDENTS

The Australian Government seeks the views of the community on the design of the Emissions Reduction Fund. These views will be considered in the development of an Emissions Reduction Fund Green Paper to be published in December 2013 and an Emissions Reduction Fund White Paper to be published in early 2014. Following publication of the White Paper, further submissions will be sought in the process of finalising legislation to support the operation of the Emissions Reduction Fund. The Emissions Reduction Fund will begin operation on 1 July 2014.

Key dates

Release of Emissions Reduction Fund Terms of Reference 16 October 2013

Submissions due in response to Terms of Reference 18 November 2013 

Release of Green Paper December 2013 

Release of White Paper and Exposure Draft legislation Early 2014 

Commencement of Emissions Reduction Fund 1 July 2014

Submission guidelines

Where possible, submissions in response to the Emissions Reduction Fund Terms of Reference should be lodged electronically, preferably in Microsoft Word or other text based formats via the email address below. Submissions may alternatively be sent to the postal address below to arrive by the due date of COB AEDT Monday 18 November 2013.

To provide a submission, please download and complete the cover sheet and submission template.

Important: All submissions must include the cover sheet and be written within the submission template.

Email: emissions-reduction-submissions@environment.gov.au (the preferred option)

Post: Emissions Reduction Fund Submissions

Department of the Environment

GPO Box 787

CANBERRA, ACT 2601

For further information, or to request a hard copy of the document, please call 1800 057 590.

EMISSIONS REDUCTION FUND WHITE PAPER – TERMS OF REFERENCE

The Government acknowledges the science of climate change and recognises that climate change is a global problem whereby all countries need to work together. Australia must act in a way that protects Australia’s international competitiveness, while playing our part in any global effort to address this issue.

The Government is committed to reducing Australia’s emissions by 5 per cent from 2000 levels by the year 2020.

Legislation to repeal the carbon tax will be the first Bill brought before the new parliament. In place of the carbon tax, the Government will institute incentives for businesses, farmers, households and other entities to invest in technologies that will reduce our emissions at lowest cost. The Government’s Direct Action Plan will efficiently and effectively source low cost emissions reductions that will contribute towards our 2020 target.

The Government is calling for submissions on the design of the Emissions Reduction Fund, the centrepiece of the Direct Action Plan.

The Government has committed to review Australia’s Renewable Energy Target in a separate consultative process in 2014.

The Government will release a Green Paper on the development of the Emissions Reduction Fund for public comment in late 2013, with a White Paper containing final policy design to be released in early 2014.

Emissions Reduction Fund

The Emissions Reduction Fund will commence operations on 1 July 2014, after the repeal of the carbon tax, and will be designed to purchase low cost abatement.

The Government is seeking business and community views on the design of the Emissions Reduction Fund including:

• the likely sources of low cost, large scale abatement to come forward under the Emissions Reduction Fund;

• how the Emissions Reduction Fund can facilitate the development of abatement projects, including through expanding the Carbon Farming Initiative and drawing on the National Greenhouse and Energy Reporting Scheme;

• the details of auction arrangements to deliver cost effective outcomes;

• the governance arrangements that will support the Emissions Reduction Fund, including the role of key institutions such as the Clean Energy Regulator;

• the details of the monitoring, verification, compliance and payments arrangements for successful bidders at auction;

• transitional issues relating to the existing Carbon Farming Initiative; and

• the design and operation of a mechanism applying to emissions above the business as usual baseline.

Privacy statement

Your views are being sought by the Department of the Environment for the purpose of providing input on the design of the Emissions Reduction Fund. Personal information that you provide will only be used for these purposes. Personal information may be disclosed to employees of other Australian Government agencies assisting the Department for the purposes outlined above. Contents of your submission may be included in subsequent publications.

Confidentiality Statement

All submissions will be treated as public documents, unless the author of the submission clearly requests otherwise. Public submissions may be published in full on the website, including any personal information of authors and/or other third parties contained in the submission.

If your submission contains personal information about any person who is not an author of the submission, please indicate on the cover sheet if the person or persons have not consented to the publication of their information.

Any request under the Freedom of Information Act 1982 for access to a submission marked 'confidential' will be determined in accordance with that Act.

“A once in a ­generation opportunity to replenish the land."

What the Minister said in October 2011:

"THE opposition has clarified its warning to business not to buy future carbon permits, saying yesterday its advice did not apply to those generated through changes to agricultural and land management practices," reports Rural Press outlets such as The Land and STock & Land. Shadow environment spokesman Greg Hunt said the Coalition's promise to repeal the carbon price scheme would not affect carbon offsets generated through the recently established Carbon Farming Initiative. "I said on the floor of the House at the time that the Coalition will continue the carbon farming initiative," Mr Hunt said. "The Direct Action Plan supports abatement through putting carbon back into soil in what could be a once in a ­generation opportunity to replenish the land."

UN says farmers must be paid for enviro-services

"Governments must find ways to factor in and reward farmers for currently unpaid public goods they provide – such as clean water, soil and landscape preservation, protection of biodiversity, and recreation," says the United Nations Conference on Trade and Development (UNCTAD).

In its latest report UNCTAD Trade and Environment Report 2013 it recommends a rapid and significant shift away from “conventional, monoculture-based… industrial production” of food that depends heavily on external inputs such as fertilizer, agro-chemicals, and concentrate feed. Instead, it says that the goal should be “mosaics of sustainable regenerative production systems that also considerably improve the productivity of small-scale farmers and foster rural development”. 
Monoculture and industrial farming methods are not providing sufficient affordable food where it is needed, the report says, while the environmental damage caused by this approach is mounting and is unsustainable. Global fertiliser use increased eight times in the past 40 years. Global cereal production has only doubled in the same period. Growth rates in agricultural productivity recently fell from 2% to below 1% annually. Food prices from 2011 to mid-2013 were almost 80% higher than for the period 2003–2008. The report says that a shift is necessary towards diverse production patterns that reflect the “multi-functionality” of agriculture and enhance closed nutrient cycles. Moreover, as the environmental costs of industrial agriculture are not accounted for, governments should act to ensure that more food is grown where it is needed. It recommends adjusting trade rules to encourage “as much regionalized/localized food production as possible; as much traded food as necessary.”  
\\

Soil carbon biochar methodology goes on show

Soil carbon generated by enhanced microbial activity in the root zone when biochar is applied will qualify for offset credits under a new methodology revealed this week in the US. The methodology also quantifies and credits both the avoided emissions from combustion or decomposition of biomass in the baseline. The methodology applies to biochar produced by the pyrolysis process from forestry and agricultural residues, municipal waste and other biomass. The methodology outlines the conditions necessary in order for carbon offset credits to be generated for biochar. Eg. biomass grown specifically for pyrolising into biochar does not qualify. Feedstocks must meet the definition of biomass residue. Among other requirements, the ratio of hydrogen to organic carbon must be less than 0.7. The resulting biochar must also be applied to land or mixed with another soil, compost or amendment medium. The American Carbon Registry has opened the meth up for public comment. The methodology was prepared by The Climate Trust, the Prasino Group, the International Biochar Initiative, and Carbon Consulting. ACR, a nonprofit enterprise of Winrock International, is a carbon offset program that is active in the voluntary carbon market and is an approved offset project registry for the California Cap-and-Trade Program. An Australian Biochar methodology is due to be delivered in the 2nd quarter of next year by Prof. Annette Cowie.