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STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORT
11/09/2008
Carbon sink forests

CHAIR —Online we have Dr Traill, Senator Joyce and, I believe, Senator McGauran. Welcome everyone. Dr Traill, Do you wish to make a brief opening statement?

Dr Traill —Yes, I do. I am a wildlife ecologist by trade. I have worked on natural resource management and conservation issues with a range of government and non-government organisations and industry for the last 25 years. Particularly in the last 10 to 15 years, and relevant to this committee, I worked as a leader in a range of states to get in land-clearing controls, particularly in Queensland, New South Wales and the Northern Territory. I could go into a range of details, but probably the simple point which I was most exercised about in seeing the tax bill amendment is that, as it is currently configured, it potentially opens up a very risky, perverse outcome. I am happy to go into more details as you wish.

In brief, as it is currently configured from what I have seen in the amendments and the attached regulations, it would allow and permit clearing of a range of types of vegetation that have less than 20 per cent canopy cover and/or below a certain height and to get a tax break to put in plantations. I will give you a couple of examples of how that could play out. In Northern Australia, where I have particular expertise, there is around 100 million hectares of tropical savanna. That area is a huge carbon store as well as, of course, having all of the biodiversity and production benefits and grazing benefits that savanna provides. But most of that savanna has less than 20 per cent canopy cover. This is not an arcane figure. My reading of the amendment as it is currently configured is that that means someone could clear an area of savanna with a big loss of carbon into the atmosphere when the bulldozed vegetation is burnt or rots and then get a tax break to establish a carbon sink plantation or several carbon sink plantations. To give an example of how that could play out, on the Tiwi Islands there have been tens of thousands of hectares of tropical savanna cleared to establish a woodchip plantation. The latest information is they are struggling financially. This of course was done with tax breaks to establish timber plantations. That was a massive carbon loss we created with that because the savanna was cleared and the resulting plantation does not go anywhere near to replacing that over any period of time. That is the Tiwi Islands.

There is a huge carbon sink opportunity around 15 million hectares of regrowth vegetation in central and southern Queensland. This is country with a whole range of eucalypt and brigalow that has been cleared previously for a range of reasons, often because it was poorer country. It is growing back. As currently configured, under current Queensland land-clearing laws that can be recleared legally without a permit, most of it, so again someone could potentially clear that, remove its potential for regrowth to create a huge stable and long-term carbon sink with a lot of biodiversity benefits and replace it with a short-term plantation of very dubious carbon sink benefits and very limited efforts for biodiversity or other production. So I would really emphasise that opportunity there in that 15 million hectares—an area two-thirds the size of Victoria, which has been well measured and well mapped—in central Queensland and the huge opportunity that provides for landholders to have that country, if there are carbon dollars available, return to native bushland—particularly if much of it is on less fertile country, which is why it is going back to regrowth and not being recleared, so it is not actually taking land out of production.

Looking at southern and south-central New South Wales, the New South Wales land-clearing laws are very poorly enforced in my experience. You could have a situation in southern New South Wales where you have productive grazing country in the Southern Highlands where there are scattered trees, native pastures. Under this amendment, as I understand it, a landowner could put in and get a tax break for a carbon sink and replace that native ecosystem, which is also very productive grazing country. I could go on with more details for any particular type of country you may wish to question me on, but there is enormous risk there. As currently configured, this will create a very perverse outcome where companies or individuals may see an opportunity to get into the carbon market, get a tax break to do that and in fact increase clearing and increase the amount of carbon emissions.

CHAIR —We do only have seven minutes of your valuable time, so I will go straight to questions.

Senator HEFFERNAN —Barry, have you gone from the Wilderness Society to what is called the Pew Environment Group?

Dr Traill —Yes, I have, Bill. It was about 18 months ago. I should have explained it at the start. Pew Environment Group is a global environment organisation which is well-known in North America and Europe, but only recently started here in Australia 18 month ago.

—We have been told by the department—and they are about to appear—that the switch into prime agricultural land for a lot of this stuff will occur when carbon gets to $80 a tonne. We are going to try and look for the modelling on that. I guess it would be fair to say that this is all dependent on the climate predictions for the changes in the weather in Queensland as to where this all might occur. Do you see this happening in what would be called food-producing country?

Dr Traill —Give us an example of what type of country you are talking about.

Senator HEFFERNAN —I suppose the more marginal wheat country in Queensland.

Dr Traill —I am not an expert on the economics of carbon versus wheat versus cattle in some of that Central Queensland country. It will vary a lot with the soils, of course.

Senator HEFFERNAN —When it comes down to it, farmers are not going to plant out prime land if they can get a bigger quid out of something else. We have heard there is a complete new face to all of this with perennial grasses and zero tillage as a model for carbon sink sequestration. There is some controversy over the planting of a tree as to how effective that is as a carbon sink activation. The average plantation sinks carbon from eight or nine years up to 15 or 18 years and after that it gradually deteriorates. We were told it could take up to 50 years to start to sink the carbon, depending on the species. Have you got any information you can give the committee on the sinking rate of the average species of tree?

Dr Traill —This is just figures in my head from when I worked on forestry back in the eighties and nineties, but on very fertile country with good rainfall you are looking at maybe a tonne sequestered per hectare per year. If you are talking $80 a tonne, that starts to add up. Of course, that plateaus. It starts off slow when the trees are saplings, then it increases when they are a moderate size and it plateaus off when they get older. I actually think that is the wrong question to ask. The point here which I am focusing on is the land productivity and those potentially terrible trade-offs for communities on highly productive land. I think what I am most focused on here, and I want to make sure people understand, is the terrible perverse possibility that on some of the poorer country—a lot of which is currently grazing land but is under natural tree coverage—there will be an incentive to clear it, creating an enormous carbon pollution signal there which will not be measured.

Senator HEFFERNAN —With a negative outcome.

Dr Traill —With a negative outcome for which the landowner will not be liable, and then they will get a tax break to establish a plantation. It is very perverse. That is ignoring the situation for landowners who may have a mixed property in, say, central New South Wales, Central Queensland or maybe the Midlands of Tasmania, where they have got a mixture of productive lower country and maybe some hill country and a range of country in between, and some of the country has been knocked down previously and is regrowth but it is poor fertility and they have not recleared it, where they will not get any incentive to allow that regrowth to grow through. That regrowth, when it grows through, will provide stable long-term carbon. The problem with most plantations is that the trees grow and then they die. I cannot see anything in the amendment that deals with that simple basic fact, that plantations are not self-replicating. Natural bush, including from regrowth, is self-replicating. Even if it is burnt or knocked down by a cyclone, it will still move to recover and get a maximum carbon store in that land type.

Senator HEFFERNAN —We take your point.

Senator MILNE —Dr Traill, the issue for me is the adequacy of the guidelines covering this legislation, because they are so general you could drive a truck through them. They rely on state governments having decent land-clearing laws that are reinforced, they rely on catchment management plans being properly drawn up and enforced and they rely on water plans being enforced. Can you just give me a view of how consistent this sort of regulation is around the country and what the enforcement pattern is.

Dr Traill —It is very mixed. South Australia and Victoria both tend to be good. New South Wales has very poor enforcement and we know that a large amount of illegal clearing is happening, and enforcement of a whole range of basic NRM regulations should be in place. Queensland is somewhere in between. Northern Territory and Tasmania are very poor. So relying on those guidelines, very simply, will not work. Even if they were interpreted in best phase the other thing to understand is that, on the most basic level, a lot of the information is not there. The amendment itself sets a bar, which sounds good on paper potentially, that you cannot get the tax break if the land had bush on it in 1990 or that more than 20 per cent cannot be covered with bush. I do not know of any state except possibly South Australia where that data is actually available. It is data that does not exist. You are relying on an honour system from the landowner, who might of course have a financial reason not to be completely truthful about the area having been cleared in 1990. The data is simply not there.

Senator MILNE —With regard to catchment management plans and so on, it seems to me that there are not very many of them finished around the country, especially when they are looking at things like potential salinity mitigation benefits or at increases in instream salinity, which would require a plan to be finished and based on some kind of decent analysis. How many catchment plans around the country would stand up to any sort of scrutiny if you tried to apply these guidelines?

Dr Traill —I cannot give you a number. I have not done an analysis probably for 18 months or two years, and there would have been some more coming through then. But I can answer in the reverse. I know of many regions, tending more towards Northern Australia but also many areas to the south, where there are not detailed active catchment management plans in place. That is simply the reality. The NRM bodies are relatively new outside small areas of probably Victoria, South Australia and southern New South Wales.

Senator MILNE —Having looked at these guidelines, what do you think would be the strongest thing we need to recommend? Is it insisting that the plantings be biodiverse, that they be in the ground for 100 years or that you not get a tax deduction if there is not a registered catchment management plan or a water plan? How do you think we could improve them?

Dr Traill —I would be happy to put more detail on paper, but in brief, because I am conscious of time, the first and most important thing is that native vegetation of any type, with its carbon stores, is not removed and replaced with a plantation because that would be a perverse outcome and would provide for an incentive for a perverse outcome. There are ways that could be done. It would not be relying on NRM strategies. The first thing is to get rid of that major perverse outcome, and then I think a focus on existing NRM plans where they exist. Where they do not exist, frankly, I would have to think about it. I am not sure there are any easy options there.

CHAIR —Dr Traill, thank you very much for making yourself available.

Dr Traill —Thank you and I apologise for the noise problems.

[4.20 pm]