On Monday, 15 December, 2008, the Federal Government released
its much anticipated Carbon Pollution Reduction Scheme (CPRS) White
Paper, which outlines the policy behind emissions trading
legislation. The legislation is planned for introduction in early
2009.
The CPRS White Paper outlines a target of a 5–15%
reduction in Australia’s greenhouse gas emissions by 2020.
However, a decision on how emissions from savanna burning are to be
treated will not be made until 2013.
Until then the Government “will further investigate the
opportunity to reduce emissions from savanna burning in Northern
Australia and the potential for carbon offsets from this
activity”, according to the White Paper.
The reference to carbon offsets concerns the idea that
reductions in greenhouse gas emission achieved by decreasing the
frequency of late dry season wildfires in savanna landscapes could
be then be purchased by companies to offset their own
emissions.
This is already happening in Western Arnhem Land where
ConocoPhillips are paying Indigenous fire managers around $1
million per year to reduce greenhouse emissions equivalent to
100,000 tonnes of CO2. The company can then offset
this against emissions from their LNG plant — so the
fire managers receive around $10 for every tonne of emissions
abated.
This is a one-off deal not related to a tradeable market in
carbon offsets.
Once the CPRS scheme begins in 2010, major greenhouse gas
emitting companies across Australia will be forced to reduce their
emissions by obtaining or purchasing permits for every tonne of
greenhouse gas (CO2 equivalent) emitted. There will be a
limited number of these permits available, set by the cap on
Australia's total emissions, and demand for permits should see the
price settle above $20 a tonne.
As well as purchasing or obtaining permits from the Government
or other permit holders, companies covered by the CPRS might also
be able to offset their emissions by purchasing emission credits
from activities like savanna fire management. If savanna fire
managers were able to participate in this new market for offset
credits they could receive above $20 a tonne of greenhouse gases
abated - generating significant income.
However, the Government is not considering allowing any of these
offset deals until at least 2015, with a decision on offsets to be
made in 2013. It has also indicated that a decision will be made by
2013 on whether or not savanna burning should be covered by the
CPRS (i.e. whether savanna fire managers will actually need to get
permits to cover the emissions from fire, although the White Paper
says this is not likely), and if it is not covered whether it
should be allowed to generate offset credits under the scheme.
These decisions will form part of the larger decision on how to
include the agricultural sector in the CPRS.
Until then the Government will be conducting workshops on the
savanna burning issue involving Indigenous stakeholders, starting
in early 2009.
During this time the Department of Climate Change is also
seeking to clarify the science behind the emissions analysis of
savanna burning to ensure that a robust methodology is available to
inform their decision on whether or not to include savanna burning
as an offset activity under the CPRS.
The Government also wants to regulate how activities like
savanna burning can participate in the voluntary (non-CPRS) carbon
offset market and a discussion paper on this will be released in
early 2009.
Go to www.climatechange.gov.au/whitepaper/
