Monday, 22 August 2011
Carbon Credits (Carbon Farming Initiative) Bill 2011, Carbon Credits (Consequential Amendments) Bill 2011, Australian National Registry of Emissions Units Bill 2011; In Committee
As Senator Xenophon has rightly highlighted, this issue was considered in some depth by the Senate committee inquiry into this legislation, an inquiry which you Mr Temporary Chairman Cameron chaired. So you would well recall the bipartisan recommendation that the government continue to monitor scientific research relevant to the issue of permanence and adjust permanence obligations in the CFI to reflect international consensus on this matter.
The bill does put in place a basic permanence obligation regarding the maintenance of carbon stores where credits have been issued. That is an important feature of the bill. There needs to be some certainty in this regard. However, as Senator Xenophon has highlighted, a number of submitters were critical of the 100-year permanence obligations and the impact that would have on the scheme. Senator Xenophon highlighted the evidence of one of the submitters to the inquiry. There were others. Ausveg in their submission made a very strong appeal on what the impact of this 100 year requirement may be. They indicated in the extract from their submission that appears in the Senate inquiry report:
… it would take a very brave farmer to agree to 100 year permanent arrangements in which they (and their children and grandchildren) will be held accountable for "natural disturbances such as drought that may cause carbon to be released from the soil".
Equally, placing all risk and costs as the growers' responsibility for "bushfire … drought, or actions by neighbours, or third-parties" belies the Government's own commitments to meeting its Kyoto obligations.
Given these serious challenges and immense uncertainty of carbon markets, it is quite unrealistic to expect vegetable and potato growers to sign 100 years commitments (with the threat of civil and criminal prosecution), undertake major investments, and change generational farming practices without any firm guarantees on the price they will be paid.
Those types of concerns are the concerns which are likely to manifest themselves and potentially make this legislation ineffectual in terms of its uptake. It is not just the farming or agricultural groups who have highlighted their concerns about this. It is not just the industry bodies; the committee also highlighted the evidence of the Climate Institute. The committee report stated that the Climate Institute agreed that the 100-year permanence provision was:
… likely to be perceived by many landholders as a substantial, even insurmountable barrier to participation in the scheme.
For these reasons, the opposition will be supporting Senator Xenophon's amendments, which put in place obligations on the Domestic Offsets Integrity Committee to monitor scientific research relevant to the issue of permanence and to advise the minister about best evidence in relation to permanence. We think that is an appropriate course of action which will hopefully provide some continual evaluation of this issue.
Importantly, as he so often does, Senator Xenophon has provided a transparency provision in this regard as well, a provision which requires that advice provided to the minister by the Domestic Offsets Integrity Committee on this matter of permanence must be published on the department's website so that it can be scrutinised, assessed and debated. I would expect there to be a feedback loop—that, once such scientific assessment and evaluation undertaken by the DOIC is published on the website, scientists and other experts will scrutinise the findings of the DOIC and provide further feedback to it, informing the DOIC's further deliberations on this issue. For these reasons, the opposition will be supporting Senator Xenophon's amendments and we hope that other parties within the chamber will do likewise.