There were two hot topics today. First, the Minister has announced that Australia is ready to join a second commitment period of the Kyoto Protocol. This commitment will have a number of conditions, including continued progress in international negotiations towards the 2015 agreement and existing land sector rules continuing and providing emissions abatement opportunities through better land management, including the Carbon Farming Initiative. This commitment, following closely on the heels of the announcement of linking with the EU ETS, is another step by the Government in its attempt to embed the Carbon Price Mechanism (CPM) into the Australian landscape and the global carbon market and make it difficult to unwind.
That, of course, leads to the second hot topic of the day, and potentially for the conference. Embodied in the title of the last session, and dealt with in detail by the Shadow Minister in his address, the question "will it stay or will it go?" was a constant amongst delegates. This is a reference of course to the Coalition's pledge to repeal the CPM if it wins office. The Shadow Minister made further unequivocal statements that under a Coalition government the 'carbon tax' would go and would be replaced by a direct action scheme largely focussed on the land sector.
Ultimately, and unfortunately, the question remained unanswered. Each side appears strong and entrenched in its view. Perhaps the answer will only be revealed with the passage of time and the electorate being asked to vote on this question once again.
From the sessions
The Carbon Farming Initiative: where are we at and should you invest?
- The CFI continues to be a key component of the Government's response to climate change, with the real prospect of providing an alternative option for liable entities as well as credits for the voluntary market.
- The Government has established a process which is rigorous and detailed and which ensures the integrity of all emissions abated or offset.
- There is a concern amongst business that this process is taking too long and the CFI market is not being allowed to "have its head".
- One way to kick start the CFI market may be to approve projects quickly but with less scrutiny and then revisit the approvals later for the purpose of detailed scrutiny and amendment if required.
Address of the Hon. Greg Combet AM MP, Minister for Climate Change and Energy Efficiency
- The CPM is in place and key data (such as CPI and energy price rise data) has shown that its effect on the community has been negligible, but that it has contributed to a 7 per cent decline in the emissions intensity of the electricity sector in the three months since it was introduced.
- The CFI is up and running however it is important for the market that the rules for each project type (methodologies) are rigorous and scientific so it is more important to get methodologies right than to get methodologies finalised too quickly.
- Despite what many in the media may suggest, the Labor party does not plan on losing the next election, however in the event it does the Coalition will not repeal the CPM.
Linking carbon markets: the new paradigm for international climate change action?
- The development of carbon markets in the medium term will be made up of national and regional emissions trading schemes which link together bilaterally to create markets that are broader and more stable.
- It is critical to linking markets that key market parameters are compatible (such as carbon measurement and accounting rules and the level of scheme ambition) which is why the early markets to link are likely to be the "sons of Kyoto".
- Australia's introduction of a carbon price which transitions into an emissions trading scheme in 2015 is a "shot in the arm" for the development of carbon markets internationally.
Address of the Hon. Greg Hunt MP, Shadow Minister for Climate Action, Environment and Heritage
- The Coalition plans to scrap the CPM and in its place implement its Direct Action plan
- Direct Action involves the creation of an abatement scheme where projects to reduce emissions bid their carbon price to the Government to purchase emissions reductions in a reverse auction. It is supported by the Clean Land policy, Clean Water policy and Heritage policy.
- In the event that the Coalition wins the next election the Labor party will have a new leader and will not be able to resist the repeal of the CPM.
Quote of the day
"Tony Abbott's 'blood oath' to repeal the carbon price is just more arrogant, aggressive bravado that can't be believed. He cannot and will not repeal the carbon price."
The Hon. Greg Combet AM MP, Minister for Climate Change and Energy Efficiency
"The Coalition will seek a mandate from the community to repeal the Carbon Tax at the next election. It will be a referendum on the issue."
The Hon. Greg Hunt MP, Shadow Minister for Climate Action, Environment and Heritage
Footage from the Carbon Expo
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.