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Carbon sink forests

CHAIR —Welcome. I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Officers of the department are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim. Before we go to questions, does anyone wish to make a brief opening statement?

Mr James —I am happy to make a short statement. As I understand it the committee has asked for clarification of how the guidelines interact with the National Water Initiative. Insofar as they relate to the possible impacts of carbon sequestration forests on water resources, the guidelines fully reflect the commitment contained in the National Water Initiative in relation to so-called interception activities. Consistent with paragraph 57 of the NWI, the guidelines require that water access entitlements be held for carbon sink forests that will have significant interception impacts and are located in catchments with high levels of water allocation. I would also just note that the Commonwealth, state and territory governments are all signatories to the NWI.

Senator BOSWELL —I would like to get a copy of those guidelines.

Senator NASH —There is some concern about the planting of the forests in prime agricultural land which will displace prime cropping type areas ranging across a multiple of varied crops. What work has the department done on the social impact effect of cropping out, if forestry was going to go in in its place?

Dr Zammit —I do not think we have done anything specific around that. I do not know of any specific research on the social consequences of land use decisions taken by private landholders.

Senator NASH —So there has been none at all? When the government was working on this—

Dr Zammit —The example I am thinking of happened a long time ago when we were preparing work around regional forest agreements and there was conversation around the shift of tenure of forests from production forests into the conservation state. Social impact assessments were undertaken in that context because there was a genuine policy concern about dislocation of employment, for example.

Senator NASH —There has not been a genuine policy concern about dislocation of employment with these tax measures for the carbon sink forests?

Dr Zammit —I cannot comment on that because I am not closely involved in the carbon forest work. That happens through the Department of Climate Change.

Senator NASH —Who would I ask that question of?

Dr Zammit —You would have to ask the Department of Climate Change, I think.

Senator NASH —The Department of Climate Change.

Senator BOSWELL —Are they appearing?

Senator NASH —Yes, they are, this afternoon. I think that is a very important question if these policy decisions have been made without any kind of social impact analysis that could be quite significant indeed.

ACTING CHAIR (Senator Milne) —Mr James, you just said that the guidelines are completely consistent with the National Water Initiative. The carbon sink forests legislation is law right now but in relation to the National Water Initiative, whilst the intent has been signed off, for how many areas around Australia have we now got a hydrological analysis? At this moment if I were to go and plant a carbon sink forest somewhere, where could I get accurate data about the hydrological analysis of the catchment, interception and so on and by what date would I expect to be able to get that?

Mr James —The NWI has a commitment that by the end of 2010 states and territories are supposed to have dealt with what is termed overallocation and overuse of the water resources within their jurisdiction. In most states, there are now 10-year or in some cases longer water resource plans that the states claim were designed to do that. For example, across the Murray-Darling Basin nearly all parts of the basin, as I understand it, are covered by at least surface water plans. With the process of looking at what the water resource is, how big it is and how it is likely to change over time and making an informed decision about how much water can be taken out of the system and how much ought to be left in the system for environmental outcomes, those decisions were made in a lot of instances four or five years ago. Those plans are now on a 10-year path. They will be reviewed at the end of that period.

I cannot give you precise data across Australia about which areas are covered by plans or which are not. What I can say is that in most areas where the resource is under pressure—so, where there is a significant amount of use—that planning has generally been done. I certainly would not claim that it has been done everywhere. While the fact is that in many areas the plans are in place, perhaps there is a subsequent question about whether those plans have gone far enough. On the work that CSIRO has done recently for the Murray-Darling Basin and indeed the rationale for the federal government’s intervention in the basin, there is a view that those plans have probably not gone far enough.

Senator MILNE —It is the disjunct in the time here that I am talking about. This legislation is law now. You said that it will be 2010 before the states and territories have to comply. You said that for the Murray-Darling mapping has been done. What about Tasmania? How many catchments in Tasmania, if any, have had a hydrological analysis done?

Mr James —I am sorry, I cannot answer that question.

Senator MILNE —Okay. Why did you say a minute ago that this legislation was completely in compliance with the National Water Initiative when you do not know about a whole state, the state of Tasmania? I do know, and I can tell that for most catchments there has been no hydrological analysis done. They have just started that process. If I was a plantation company going to set up in Tasmania now, under these guidelines isn’t it true that I would be deemed to have complied because of the fact that there is no data to comply with?

Mr James —I cannot comment on the amount of data that is or is not available in Tasmania. But, in terms of the issue of retrospectivity that you raised, my understanding is that, if in applying the guidelines a proponent wants to establish a plantation for carbon sequestration and there is no requirement in that particular catchment to hold a water access entitlement to cover that type of activity, then yes, they would be compliant, presumably.

Senator MILNE —Yes. So you can see where we are coming from here. We have tax deductibility for planting so-called carbon sink forests now in the absence of any consistent data around the country—data that is going to come out under the National Water Initiative. Who is going to enforce it?

Mr James —I do not think I could support the statement that there is no information. The comment that I made before the committee last time was that when states go about undertaking their planning process—which is a lengthy and expensive thing to do—they start with the areas where the resource is under the most pressure. Those tend to be the areas that have plans in place. I am not sure that it is right to say that there is no information or indeed that you can assume that just because there is no plan there the resource is somehow therefore at risk. In a lot of cases, those areas are deemed by the states to not be under the pressure that requires them to be a priority for planning. I am not defending the way that that is done. In a perfect world, all of these things would have been done a long time ago. But states have a program of working through these things and they start with the most at-risk catchments.

Senator MILNE —Do you think it would be an improvement to the guidelines if the tax deductions were only available in areas where a catchment management plan and a water management plan were in place? That gives some incentive for people to put them in place and it gives some certainty to us, and to anyone else, that the water issues have at least been addressed.

Mr James —I would have no problem with that. From our point of view we are very keen for water plans to be in place in all catchments. The only thing that I guess causes me to slightly hesitate in fully endorsing that would be that you are assuming that, if there is no plan in place, the resource will somehow be at risk. My point is that if there is no plan there it could well be that that resource has been assessed in a reasonably quick way and people think: ‘Well, there is not a lot of activity going on there. It is not likely to be at risk and there are not a lot of people queuing up to use the resource, so it is not a high priority.’ All I am saying is that there are water resources where that is the situation.

Senator NASH —I have a question that follows up on that and it may sound very simplistic. We spent all day yesterday down in Adelaide dealing with Murray-Darling Basin issues and water issues. As the legislation and the guidelines currently stand, if you want to put in a carbon sink there is no requirement for determining beforehand what the impact on water in terms of interception or anything like that is going to be. Is that correct?

Mr James —The guidelines, I think—

Senator NASH —I know it is simplistic, but if I am Joe Bloggs and I want to put in a carbon sink—

Mr James —Are you talking about how this would operate?

Senator NASH —I am asking whether there is any requirement anywhere for me to show how my trees are going to affect the water environment, if you like—where it is in the basin, how much it is going to suck out, how much it is going to intercept and how much it is going to use. Is there any requirement for me to find that information out and give it to anybody?

Mr James —For clarification, are you talking about the situation in the absence of this bill, or just in a general sense?

Senator NASH —I am talking about the bill and the guidelines as they currently stand. Is there any requirement in there?

Mr James —No. The guidelines are about the arrangements that are in place within particular states.

Senator HEFFERNAN —The guidelines are just a motherhood statement; they are meaningless.

Senator NASH —I agree with you. So—

Mr James —To continue, in South Australia, for example, where they do have a requirement for plantation proposals to offset their water use by holding an entitlement—South Australia is, as I understand it, the only state that has that—then, yes, the guidelines would suggest that in those areas you would have to do that.

Senator HEFFERNAN —You put out an absolutely meaningless motherhood statement as the guidelines. It is just a motherhood statement. It is just one page in length and it could mean any damn thing.

Senator MILNE —It is not their department that put it out.

Senator HEFFERNAN —Those are the guidelines. The river management plan for all the rivers in New South Wales did not include any interception when it was set—against the background of the 2020 Vision. It is a complete cock-up. This is further direction of that; there is absolutely nothing in it.

Senator NASH —As it currently stands with those guidelines and that legislation, if I have a piece of land out in western New South Wales in the Murray-Darling Basin and I want to plant trees—

Senator BOSWELL —Good luck!

Senator NASH —I will repeat this again so that we can be absolutely clear about it: do I have to determine what the impact on the basin will be, or how much water those trees are going to use on an annual basis or, indeed, what interception may occur? And, if I were to determine that, would I have to inform anybody what the impact will be of my planting those trees?

Mr James —No, not as I understand it. I might add that, under the NWI, there is an obligation on states to have in place by the end of 2011 arrangements of the type that are in place in South Australia at the moment.

Senator NASH —In 2011—and this legislation is in place now. What is the obligation? What happens to them if they do not?

Mr James —If they do not what?

Senator NASH —If they do not have the plans in place.

Mr James —If the states do not have those requirements or those processes in place to make the assessments you are talking about—

Senator NASH —What happens to them?

Mr James —I guess they would be acting inconsistently with an intergovernmental agreement.

Senator NASH —What is the penalty?

Mr James —As far as I know there is no—

Senator NASH —There is no penalty. So there is no penalty for something that is not going to happen for another three years even if they do not do it then.

ACTING CHAIR (Senator Milne) —That is right. Senator Fisher?

Senator FISHER —As Senator Nash outlined for you, we have been spending some time separate from this inquiry looking at the Lower Lakes and Coorong and the Murray-Darling Basin in general. I was interested to hear your comments a little earlier in response to questions from Senator Milne in which, if I understood you correctly, you indicated that you do not do assessment of land use decisions by private operators. Is that right? That is what I understood you to say.

Mr James —I said that in the context of any sort of social evaluation or social impact assessment we do not do a social impact assessment when a private landowner chooses to change their land use from one type of land use to another.

Senator FISHER —Why is that? Why do you not do that analysis? Is it not part of your—

Dr Zammit —It is not part of our remit, for one, and I am not quite sure what the Commonwealth’s role would be there. Private landowners make all kinds of decisions about their land use daily, weekly and monthly, depending upon the enterprise.

Senator FISHER —Sure. Would you do assessments of public land use?

Dr Zammit —A government would. Depending on what the Commonwealth’s responsibilities were for the particular intervention, we may have a view; we may not. It depends. Most of the land use planning happens through state legislation, as you know, so our points of entry are actually quite small.

Senator FISHER —Nonetheless, we are talking here about the National Water Initiative and we are talking to the Department of the Environment, Water, Heritage and the Arts. Has the department done an assessment of the land use implications of the decision just announced by the federal and New South Wales governments to purchase Toorale Station?

Mr James —Sorry, what sort of assessment are you asking about?

Senator FISHER —A land use assessment. You have indicated that you do not do that for private operators. However, we are talking about the National Water Initiative. You are the department for water and the environment, amongst other things. We are talking about a forecast land use change by a public operator in a conglomerate, we understand from the media, between the federal government and the New South Wales government. It is a change in land use from food production and irrigation, essentially, to an environmental purport site. Obviously, there will be land use implications and other implications: for food, employment and water and social and economic. Has the department provided that analysis to the federal government?

Mr James —As far as I am aware, we have not done a socioeconomic analysis of that particular purchase. I guess the more general point, though, is that the government has an intention to purchase quite a lot of water over the 10-year period of that program to redress the balance of water use within the basin, and we are certainly looking more generally at the issue of social and economic consequences of that activity. The Minister for Climate Change and Water recently commissioned an independent panel to provide her with some advice on some of those issues.

Senator JOYCE —So you have spent $26 million to get 14 gigs a thousand kilometres away from South Australia—an average 20 gigs a year—and you have not done a socioeconomic study about what is going to happen to the town of Bourke?

ACTING CHAIR —Senator Joyce and Senator Fisher, this is our last hearing on carbon sink forests. Whilst I appreciate—

Senator JOYCE —I did not want to participate, but since it was brought up and it is contentious I thought—

ACTING CHAIR —It is just that we have five minutes and Senator Boswell has been following this carefully and we want to get back to some biodiversity questions.

Senator FISHER —Can I ask that my remaining question be put on notice then? Is that all right?


Senator FISHER —Thank you. So you have not provided advice. Can you answer on notice whether you have been asked to provide that advice by the federal government? It is possible that you have been asked but have not yet provided it. Also, have you either provided to the federal government or been asked to provide to the federal government advice or modelling about the use to which the water realised from this sale will be put? I ask that question in the context of Minister Wong saying in the media today that it will be returned to the river, for environmental purposes, for the health of the river.

ACTING CHAIR —Thank you, Senator Fisher. I am happy for you to put it on notice but we need to move on. This is our last hearing.

Senator BOSWELL —I looked at these guidelines and they seem pretty innocuous but is there anything that would prevent a carbon sink forest being established on the most prime land available?

Mr James —I am not sure if I can answer that.

Dr Zammit —I cannot answer that. I do not know the guidelines. You will have to ask the Department of Climate Change, who wrote those guidelines.

Senator BOSWELL —Who wrote those guidelines?

Mr James —The Department of Climate Change. We had some input, in terms of the NWI issues, but I think the senator’s question is a broader one.

Senator BOSWELL —No, the question is: who wrote the guidelines?

ACTING CHAIR —Did the Department of the Environment, Water, Heritage and the Arts have input?

Dr Zammit —Have we seen it? I do not think we have seen the guidelines at all.

Senator BOSWELL —Who wrote the guidelines?

Mr James —The Department of Climate Change. I am saying that we had some input in respect of the water parts of the guidelines.

ACTING CHAIR —So you cannot answer Senator Boswell’s question?

Mr James —I will not be able to answer it, no.

Senator JOYCE —Can I ask a very simple question please?

ACTING CHAIR —Yes, Barnaby.

Senator JOYCE —Thank you. Where does more water run off? Does it run out of forests or does it run off grasslands or does it run off agricultural land?

Senator NASH —Good question.

Senator HEFFERNAN —Do you want me to give you the right answer if they cannot?

ACTING CHAIR —Thank you, Senator Heffernan.

Senator JOYCE —I know the right answer; I am just waiting for them to put in on the record.

ACTING CHAIR —Please let the witnesses answer.

Mr James —I think the answer to that is: it depends where you are.

Senator JOYCE —Let’s just say I have 20 acres of country next to the Murray River and I want to know whether to put in a blue gum forest, leave it as natural pasture or cultivate it. Which way is the most water going to run off that country?

Senator HEFFERNAN —It depends on the rainfall, Barnaby.

ACTING CHAIR —Okay. Do you have anything further to add to that?

Senator JOYCE —I did not get an answer. Is there an answer to that question?

Senator HEFFERNAN —Yeah, from 38 inches you will get 2½ megalitres a hectare interception. From 22 inches to 18 inches, you will get bugger-all interception.

CHAIR —Senator Heffernan, Senator Milne has the call. We have only a few minutes left.

Senator MILNE —Yes, we have only a few minutes, so I would appreciate it if you could just be quite sharp with your answers. You have just established that the Department of the Environment, Water, Heritage and the Arts was not consulted about the guidelines.

Dr Zammit —No, I did not say that. I said my area of the department was not. You may need to check with other areas of the department. I did not see it. It is a large department.

Senator MILNE —So the biodiversity section did not get asked?

Dr Zammit —Yes.

Senator MILNE —Okay. I wanted to ask you precisely that. As the regulations currently stand, they do not require the plantings to be biodiverse. They do not require the plantings to be in more marginal areas. They do not require the plantings to be in the ground for 100 years or something that might represent a sequestered amount of carbon. Has any discussion at all been had between you and the Department of Climate Change about the notion of these plantings being biodiverse and setting any kind of rules to make sure they are biodiverse?

Dr Zammit —Not with me personally. I will ask Carey if she knows of any conversations around this. It is a reasonable question. No-one has approached me on it and I get a lot of traffic on forests.

Senator MILNE —So would it be desirable for carbon sink forests, if they are to be carbon sinks, to be biodiverse?

Dr Zammit —I think from first principles you would have to say yes. The argument would go from first principles that if you are going to grow trees for carbon the added benefit of biodiverse trees is a free benefit, so why wouldn’t you do that?

Senator MILNE —Is it true to say that if you have a biodiverse planting it is likely to be more resilient in the longer term and self-replicating, as opposed to a monoculture?

Dr Zammit —It is hard to answer that. It would depend on the adjoining land uses and the context. But, again, from first ecological principles you would say yes. Resilience comes with complexity—

Senator MILNE —Exactly.

Dr Zammit —and diverse forests are more complex. Therefore, you would expect diverse forests to be more resilient.

Senator MILNE —I just need to clarify the guidelines issue, finally. You were not asked and have never been asked to provide feedback from your biodiversity unit on these guidelines?

Dr Zammit —No.

Senator HEFFERNAN —Do you think that an independent person looking at the guidelines would take the view that they are a sort of motherhood statement but meaningless? I am talking about a casual observer.

Dr Zammit —I think you could argue that they are generic.

Senator HEFFERNAN —They are very generic.

CHAIR —On that, I thank officers from the Department of the Environment, Water, Heritage and the Arts very much.

[4.46 pm]