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.”  
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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.

Carbon farmers more powerful than politicians

Author and wool producer Charles Massy believes that farmers could do more than any other group in society to address the crisis of Climate Change. In a speech at Bombala, NSW, he declared that "climate change and population growth around the globe is the biggest crisis that has ever confronted humanity up until now. And I don't believe the solutions are going to come from (politicians.) I really feel it's farmers who can probably do more than any other segment of society to address the crisis."

There are many examples of farmers reversing damage on the landscape and putting carbon back into the system. "The good news is are a lot of solutions out there, I think a more ecological approach to carbon farming is the key. We can do this by putting more carbon into the soil, whether we are going to be paid for it or not. We are going to need to strive for 100 per cent of ground cover to stop this, deeper-rooted vegetation, different forages." (Weekly Times)

What’s next for the New CFI?

 Greg Hunt, new Minister for Climate Action, laid out his immediate plans for the CFI in a  Speech to the Sydney Institute, 30 May, 2013

“We will hold a White Paper process after the election. It will provide an opportunity for industry to make submissions on issues such as the timing of the auction process and the setting of baselines. We will call for submissions within 30 days of being elected, consult between days 60 and 100, release the White Paper and draft legislation by day 100, receive further feedback and release final legislation by day 150. Our goal is to commence the system on 1 July 2014.

We have already held extensive discussions with all sectors to encourage potential participants to consider how they can engage with Direct Action and create opportunities for generating abatement, so they are fully prepared for its implementation. We are also keen for any suggestions or feedback at this stage, to ensure all potential issues are addressed. 

The New CFI: Coming Soon

The Federal Election here in Australia is likely to hand power to the conservative parties for the next six years, such is the maths of our democracy. The new Prime Minister, who has been reported as saying the argument behind Climate Change is “absolute crap”, campaigned on a “Scrap The Carbon Tax” platform. In the ranks of his party are many who deny man-made Climate Change.  Australia has been the great laboratory of land sector solutions to Climate Change .The Carbon Farming Initiative (CFI) is a ground-breaking innovation. The new government has promised to dismantle much of what had been built around the “Carbon Tax”. Does this spell the end of the CFI? No. There will be a new CFI. Let’s look at comments made by the new Minister for Climate Action, Greg Hunt:

Direct Action Webpage

“Under the Direct Action plan, soil carbons will be the major plank of our strategy,…

Speech to Sydney Institute, 30 May, 2013

1.     “The Carbon Farming Initiative will be expanded to include a wider range of emissions reduction methodologies.

2.      “We will support the application of methodologies that have been approved internationally, modifying for local conditions where required.” This is in response to complaints about the slow progress of methodologies, in particular the soil carbon meth.

3.     “The current system of methodology approvals has restricted people from engaging in potential projects, both in terms of time and scope,” he says.

4.     “The Clean Energy Regulator, will be responsible for approving the methodologies. It will ensure that the emissions reduction being claimed is genuine and verifiable”.

5.     “At present, the Clean Energy Regulator approves the viability of projects and issues recognition of abatement once it occurs. This method will continue”.

6.     “Methodologies that have been approved to date will be maintained. “

7.     “Registered projects will also be continued. “

8.      “We will unblock the approvals process, create a 25-year option for land-based sequestration and broaden the range of methodologies to include all forms of abatement such as cleaning up power stations and energy efficiency.”

ABC Online 5 September, 2013

“The Coalition intends to place Landcare back at the centre of our land management programs. The grants application process will be simplified and funding will be made triennially, to allow continuity of funding for projects. It is a recognition of the valuable work local Landcare groups undertake. We must ensure that they are part of the decision-making process with funding allocated at a local level, rather than in distant Canberra.”

House of Representatives Speech, 25 May, 2011

“The coalition supports the science and agrees to and supports on a bipartisan basis the targets that Australia has set but disagrees clearly, strongly and absolutely with the primary mechanism brought forward by the government to deal with this issue

“Let us give a fair reading to this legislation. Its objective is to help Australians reduce greenhouse emissions by contributing to the bipartisan five per cent reduction on 2000 emissions by 2020. It seeks to create incentives for farmers and landholders to undertake voluntary land sector abatement projects. These are principles that we in the coalition have set out, so the principles in this legislation are in agreement with those that we have put on the table. It seeks to give farmers some sort of incentive.

“We also want the inclusion of soil carbon in a constructive way from the outset… we want the construction of an acceptable set of rules around permanence… we want the construction of an acceptable set of rules around additionality…"