Carbon Farming After Copenhagen

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Grain Growers' Association policy executive Bryan Clark gave his insights about Copenhagen at the Third Annual Carbon Farming Conference & Expo 2009 in Orange NSW Australia - the only soil carbon farming conference of its type in the world. (4-5 November 2009)

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Carbon Farming After Copenhagen

  1. 1. Carbon farming after Copenhagen Bryan Clark, Industry Development Manager, [email_address]
  2. 2. <ul><li>What is the CPRS anyway? </li></ul><ul><li>Part of the domestic response to an international treaty obligation – Kyoto Protocol (2008-2012). </li></ul><ul><li>3 pillar response to climate change </li></ul><ul><ul><li>reducing Australia’s carbon pollution; </li></ul></ul><ul><ul><li>adapting to unavoidable climate change; </li></ul></ul><ul><ul><li>and helping to shape a global solution. </li></ul></ul>
  3. 3. <ul><li>CPRS has 2 parts: </li></ul><ul><li>Emissions trading scheme </li></ul><ul><ul><li>Main tool to use a market based “cap and trade” system </li></ul></ul><ul><ul><li>Reporting Entities above 25,000 tonnes CO2e (target 1000 companies) </li></ul></ul><ul><ul><ul><li>47 farms in that category </li></ul></ul></ul><ul><ul><ul><li>“ Agriculture” is currently “uncovered” </li></ul></ul></ul><ul><li>“ Other complementary policies” </li></ul>
  4. 4. <ul><li>Reducing emissions should be good for farmers </li></ul><ul><li>Reduced fuel / fertiliser use </li></ul><ul><li>Improved feed conversion </li></ul><ul><li>Improved soil health </li></ul><ul><li>Except the scheme doesn’t provide these incentives. </li></ul>
  5. 5. <ul><li>So what does that mean for farmers? </li></ul><ul><li>Ag decision in 2013 - 5 yrs of “uncovered” yet exposed </li></ul><ul><ul><li>Reduced terms of trade for farmers from 2011. ~ 5% increase in costs. </li></ul></ul><ul><ul><li>No intention of dealing with farmers under any circumstances </li></ul></ul><ul><li>Ag “covered” after 2015? based on what? </li></ul><ul><ul><li>Next political cycle </li></ul></ul><ul><ul><li>Second commitment period? International rules evolution. </li></ul></ul><ul><li>Uncertainty for ag is too great </li></ul>
  6. 6. Kyoto Protocol accounting rules for land‑based emissions are not comprehensive ; they cover a limited set of emissions sources and sinks. These sources are as follows: • Agriculture emissions (Annex A of the Kyoto Protocol) includes enteric fermentation (feed digestion) in livestock, manure management, rice cultivation, agricultural soils (for example, fertiliser use), prescribed burning of savannas, and field burning of agricultural residues • Emissions from land-use change and forestry (Article 3.3 of the Kyoto Protocol) which includes net emissions from forests established since 1990 on land that was clear of forest on 31 December 1989, and from deforestation (deliberate removal of forest and replacement with non-forest land use). Source: DCC Green Paper Where are we now?
  7. 7. Article 3.4 of the Kyoto protocol provides for additional activities that countries may elect to count towards their emissions target during the first commitment period. These elective activities are: forest management (plantation forests established before 1990 and all native forests under some form of management) revegetation (establishment of woody biomass that does not meet forest criteria) grazing land management (carbon stored in soil and vegetation on grazing land) cropland management (carbon stored in soil and crops). If a country chooses to include any of the additional activities, it must also include, and report on, all emissions from all land nationwide on which those activities are undertaken. Australia has elected not to include these activities because of the risk that drought or bushfire could result in significant emissions from these sources during the Kyoto commitment period. Source: DCC Green Paper Where are we now?
  8. 10. Copenhagen <ul><li>“ If you are not at the table, you are probably on the menu” (Peter Whitted) </li></ul><ul><li>Ag is on the table (following Bangkok Oct 09) </li></ul><ul><ul><li>Long-term Cooperative Action (LCA) track </li></ul></ul><ul><li>Article 3.4 future - Compulsory in post 2012 commitment period? </li></ul><ul><li>Govt position </li></ul><ul><ul><li>Sought exclusion of “major” natural events </li></ul></ul><ul><li>Industry position </li></ul><ul><ul><li>Sought exclusion of all natural events </li></ul></ul><ul><ul><li>What if there is no agreement? </li></ul></ul>
  9. 11. What are other counties doing re Ag? NZ 40% Included in cap and trade from 2013 – subject to review Canada Developing ag offset schemes in provinces EU 7% (UK) Ag not covered but recognised as needing to play a part while maintaining productivity. UK transition plan – voluntary actions to reduce ag emissions by 6% (review in 2012, R&D, technical support) USA 6% Ag not covered but able to provide offsets Brazil Reduced burning of sugar cane Incentives for sustainable ag practices Increase power co-generation from sugar cane bagasse Increase in ethanol consumption (from sugar cane) Reduced deforestation
  10. 12. Scenarios <ul><li>Post Kyoto agreement in Copenhagen – Aust in </li></ul><ul><ul><li>Domestic legislation required </li></ul></ul><ul><li>Post Kyoto agreement in Copenhagen – Aust out </li></ul><ul><li>No agreement by ongoing discussion </li></ul><ul><ul><li>8 years to get Kyoto Protocol. </li></ul></ul><ul><ul><li>WTO precedent </li></ul></ul><ul><li>No agreement and talks fail </li></ul><ul><li>NAFTA agreement </li></ul><ul><li>NAFTA agreement + China + India </li></ul><ul><li>Domestic legislation not dependent on an international agreement </li></ul>
  11. 13. CPRS Amendments Liberal / NP Greens Trade Exposed Industries a single level of assistance for emissions intensive trade exposed (EITE) industries at 94.5 per cent until 2015 and 90 per cent thereafter. Lower the threshold for assistance from the CPRS proposal of 1000 tonnes of CO2 per $1 million of revenue to 850 tonnes of CO2 per $1 million. Continue to provide assistance to Australian EITE industries at 90 per cent until 80 per cent of their international competitors have also implemented carbon abatement measures. Include primary food processing such as dairy and meat in the EITE scheme. Decreased reliance on road based transport and increased reliance on rail including freight. Restricted use of Fringe benefits tax concessions re cars and limits to the Fuel Tax credits scheme Ag permanently excluded but can provide offsets Unclear on ag specifically but looks to support an offsets system for terrestrial carbon Incentives for improved energy efficiency (household and industrial) Greater support for renewable energy
  12. 14. <ul><li>DCC Technical Options Development Group (TODG) </li></ul><ul><li>ETS </li></ul><ul><ul><li>Cap and trade </li></ul></ul><ul><ul><li>Baseline and credits (offsets) </li></ul></ul><ul><li>Regulation </li></ul><ul><li>Taxation </li></ul><ul><ul><li>Tax consumers? </li></ul></ul><ul><ul><li>1% retail tax on food / beverage = ~$1 billion / yr </li></ul></ul><ul><ul><ul><li>$ Support for R&D </li></ul></ul></ul>
  13. 15. <ul><li>Current legislation – Grains position </li></ul><ul><li>Ag declared “not covered” and not subject to further consideration </li></ul><ul><li>Offsets are included in “other complementary measures”. </li></ul><ul><li>Trade neutralising measures </li></ul>
  14. 16. <ul><li>Offsets </li></ul><ul><li>Clean Development Mechanism (CDM) - Kyoto </li></ul><ul><li>CCX Offset credits – non Kyoto </li></ul><ul><li>Alberta Carbon Offset System </li></ul><ul><li>provide already acceptable market instruments for ag initiatives. </li></ul><ul><ul><li>Not perfect but they provide starting points </li></ul></ul><ul><ul><li>use a baseline and credit system – not cap and trade </li></ul></ul><ul><ul><ul><li>Practice based, supported by science </li></ul></ul></ul><ul><ul><ul><li>Doesn’t require high administrative costs </li></ul></ul></ul><ul><li>Current legislation already provides for non kyoto units and domestic removal units </li></ul>Market systems for carbon credits
  15. 17. Soil carbon offsets Positives Negatives Can be done now - voluntary <ul><li>No real buy side driver – yet </li></ul><ul><li>lack of confidence </li></ul>Possible – scientifically supported Cost effective MVR Proof / verifiable? Can be long term <ul><li>Additionality </li></ul><ul><li>Needs a practice that is not BAU </li></ul>Improves soil health <ul><li>Permanent </li></ul><ul><li>Easily reversible – natural or disturbance </li></ul>Could be done through “avoided” construct Might have to be done offshore International precedents <ul><li>May result in more emissions </li></ul><ul><li>NOx, CH4 </li></ul>
  16. 18. <ul><li>1.       A communications strategy </li></ul><ul><li>2.      The development of a web based training programme portal and associated database of courses available to grain producers and industry participants </li></ul><ul><li>3.      A web based decision support system to provide increased understanding of the historic and future seasonal and production changes under climate scenarios - FutureWise </li></ul><ul><li>4.      Development of specific grains industry course for growers related to specific areas of interest to the grains industry such as the implications for grain marketing and grain quality arising from climate change. </li></ul>Grains Industry Climate Initiative DAFF – Farm Ready
  17. 19. <ul><li>Further information </li></ul><ul><li>UNFCCC – www.unfccc.org </li></ul><ul><li>GGA – www.graingrowers.com.au </li></ul><ul><li>Bryan Clark – 0428 645232 </li></ul><ul><li>Thank you. </li></ul>

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