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Wednesday, 25 May 2011
Page: 4520


Mr DREYFUS (IsaacsCabinet Secretary and Parliamentary Secretary for Climate Change and Energy Efficiency) (11:31): I rise to speak on the Carbon Credits (Carbon Farming Initiative) Bill 2011 and cognate bills. As the Minister for Climate Change and Energy Efficiency outlined in his second reading speech, the carbon farming initiative fulfils an election commitment to give farmers, forest growers and landholders access to carbon markets. By doing so, the carbon farming initiative will create new real and lasting economic opportunities for regional communities in this country. Farmers and landholders will be financially rewarded for their actions to reduce or store carbon pollution. This is a very important step forward for regional and rural Australia. It is important for farmers and landholders and for the families and communities that are dependent on a sustainable productive and competitive agricultural sector.

Australia has amongst the highest agricultural emissions of the developed countries, around 23 per cent of national emissions, but we also have significant opportunities to increase carbon storage in our landscape. The carbon farming initiative presents an opportunity for Australia to address these high emissions and for the agricultural sector to be part of the solution to climate change. This is important because the agricultural sector is likely to be one of the most strongly affected by climate change. Farmers and landholders are right to be concerned about the economic challenge that climate change will pose for their futures and Australia's food security. Notwithstanding the development of advanced farming techniques, climate change threatens to do great harm to our grain, pastoral and livestock industries. There is clear evidence that Australia's climate has already changed. Farmers have always had to live with Australia's variable weather. They are no strangers to the extremes of drought and floods and the ongoing challenges that our climate presents to agriculture.

Australian farmers and landholders recognise the benefits of protecting the land because for them the land represents their greatest resource. The carbon farming initiative will create incentives to protect our natural environment and adopt more sustainable farming practices as well as mitigate climate change. The practices of increasing carbon storage in agricultural soils to improve soil health and productivity, revegetation to help restore degraded landscape and protect biodiversity and tree planting to help address salinity and reduce erosion will all be rewarded under the carbon farming initiative.

Today I am releasing for public comment the first methodology to go through the domestic offsets integrity committee process. I note that the member for Flinders has welcomed the release of that methodology. This methodology will allow Indigenous land managers across the remote regions of the north of Australia to earn carbon credits for improving fire management. The development of this methodology is a world first and represents a unique combination of traditional ecological knowledge, cutting edge modern science and the emerging carbon economy of the future. Projects such as that already being trialled in western Arnhem Land could save over 100,000 tonnes of carbon pollution each year and reward Indigenous landowners with $2 million to $3 million of revenue a year if they sold the credits for $20 each. These are the types of opportunities Indigenous Australians are telling us they need to benefit from the low carbon economy of the 21st century.

The carbon farming initiative is not a government grant program. From the speech he has just given to the House, the member for Flinders seems to have misunderstood the nature of the carbon farming initiative almost entirely. The references and comparisons he made seemed to suggest that his understanding is that this is an initiative that might involve the expenditure of government funds in the form of grants. I stress again that it is not a government grant program.

It is not a program that relies on bureaucrats picking winners. The legislated scheme will allow sellers to deal directly with buyers and leverage the opportunities of the marketplace. Such a marketplace allows companies to invest in local land sector abatement through long-term contracts and partnerships with farmers and landholders. Markets are not new to farmers nor are many of the things which can save or store carbon, trees and soil. What farmers need is a mechanism to add value to their actions and decide whether or not to invest. Participation in the carbon farming initiative is voluntary. Farmers and landholders are free to participate if they see a way to benefit. They can also exit the scheme by handing back an equivalent number of credits if they no longer wish to be part of it.

The carbon farming initiative will create a new industry for rural Australia. By 2020 the carbon farming initiative could be channelling hundreds of millions of dollars into rural communities each year. Farmers and landholders will be paid for reducing or avoiding emissions, for example, through capture and destruction of methane emissions from landfill or livestock manure, or through removing carbon from the atmosphere and storing it in soil or trees by, for example, growing a forest or farming in a way that increases soil carbon. By financially rewarding farmers, the carbon farming initiative will begin to unlock the significant long-term potential for land sector abatement.

Just as the lack of certainty over carbon pricing stopped the long-term investment in our electricity generation sector necessary for energy security, the lack of a framework for rewarding the abatement offered by the land sector has substantially lessened the opportunity for the land sector to be part of the solution to climate change. Investment in land sector abatement needs a long-term framework for the full rewards to be delivered and for the climate to benefit. A grants based approach cannot provide any long-term certainty. That, of course, is the vice of the whole approach that the opposition has brought to this subject with its so-called direct action program. The carbon farming initiative will move the land sector forward by establishing the framework for crediting savings both within and outside international accounting rules. The ability to sell credits to the domestic voluntary market and internationally also allows the carbon farming initiative to be independent of the debate over a broader carbon pricing mechanism. However, to get the most out of this legislation the government intends the carbon farming initiative to link with the carbon price, providing additional demand for abatement and a larger source of revenue for farmers and landholders.

I wish to address one of the criticisms of this initiative now. The government does not accept that Australia's food producing regions and prime agricultural land are threatened by the proposed carbon price or by this carbon farming initiative. The government has excluded agricultural emissions from liability and placed significant safeguards in the carbon farming initiative. Safeguards include the additionality test, which excludes short-rotation commercial forestry and takes into account natural resource management plans. Projects with perverse outcomes will be excluded by regulation and there will be a requirement to comply with state and territory laws. I note that the Department of Climate Change and Energy Efficiency has published preliminary estimates of abatement under the initiative which assume that less than 35,000 hectares of carbon plantings would occur annually.

This package of bills creates a legal framework which will provide certainty for private investment in carbon abatement. The carbon farming initiative provides a framework which is grounded in the science of climate change and provides clear economic value to actions which store or reduce carbon pollution. I should say in relation to the observations that have just been made by the member for Flinders about supposed lack of detail, there has been very extensive consultation around a draft bill which the government published. The comments that have been received as part of that very extensive consultation have been taken into account in formulating the bills that are before the House. The government is also happy to provide further information on such matters as the indicative positive and negative lists, which are a feature of this legislation. The government is happy to provide a briefing on the indicative positive and negative lists and on other details of this carbon framing initiative to the opposition and to the crossbenchers. That is well known to those opposite.

We have a problem in that the opposition has regrettably approached this legislation, as it has so much other legislation, with typical negativity, which has become its hallmark. The speech we heard from the member for Flinders, who is the opposition spokesman in this area, did not go to the detail of this legislation. This is legislation that is well worked through. It has been the subject of extensive consultation. It is entirely clear in the principles which it sets forward, and the mechanism of putting legislation before the House with regulations to follow is an entirely standard mechanism. That is the mechanism that is being followed here. What we see from those opposite is an opposition that does not wish to take meaningful action on climate change and an opposition that has no credibility in this area. That is regrettably reflected in the approach that it appears is being taken by those opposite in relation to the carbon farming initiative. I commend the bills to the House.