Carbon Offsets & GHG Emission Reductions

South Korea’s ETS

This week, South Korea has passed legislation to establish a national emissions trading scheme from 2015, covering 500 of that country's largest emitters. South Korea is Australia's fourth largest trading partner. South Korea joins Australia, New Zealand, the European Union & the American state of California, among others, in putting a price on greenhouse gas emissions. 

The South Korean scheme covers about 60% of all their greenhouse gas emissions. Like Australia’s scheme it captures site which emit more than 25kT/yr CO2-e.  Each permit represents a tonne of carbon emissions, with up to 95% free permits awarded during the scheme's two first phases, spanning 2015-2017 & 2018-2020. The rest would be auctioned.  Overall the South Korean scheme looks very similar to Australia’s scheme.

South Korean has Asia's fourth largest economy, having doubled since 1990. The South Korean Government says the scheme is crucial to reining in emissions by a pledged goal of reducing greenhouse gas emissions by 30% from projected levels by 2020.

The National Carbon Offset Standard (NCOS)

Australia is one of the top 20 polluting countries in the world & produces more green house gases per person than any other developed country in the world.  This is not something to be proud of.

Australia's green house emissions are projected to increase by 24% between 2000 to 2020, under a business as usual scenario. The current Federal Government recognises that many businesses & individuals are concerned about climate change.

The Australian Government’s has failed to effectively sell the Clean Energy Future plan.  Some sort of emission trading is probably the best way to meet Australia’s emissions reduction targets in cost effective manner.  Australia has committed to reducing its emissions by between 5 - 25% by 2020. The 5% target is unconditional.  The up to 15 per cent and 25 per cent targets are conditional on the extent of international action.

A key component of this plan is the carbon price mechanism (Carbon Tax) established under the Clean Energy Act 2011.  

The Australian Government has also committed to a long-term target to cut pollution by 80 per cent below 2000 levels by 2050.  This will not be possible relying on emissions trading alone.

Many ASBG members wish to make their own contribution to reducing greenhouse gas emissions.

The National Carbon Offset Standard (‘the Standard’) is one way that organisations may take additional action to reduce carbon pollution beyond Australia’s national targets. 

In December 2007, Australia ratified the Kyoto Protocol to the United Nations Framework Convention on Climate Change, agreeing to limit annual carbon pollution to an average of 108 per cent of 1990 levels during the Kyoto period (2008 - 2012).

The Standard was developed following extensive stakeholder consultation.  This revealed a strong consensus that achieving carbon neutrality involves action that goes beyond compliance with the carbon price mechanism, and opposition to the idea that compliance with the carbon price equates to carbon neutrality.

Accordingly, eligible offsets cancelled to achieve carbon neutrality under this Standard must be in addition to any eligible units surrendered to meet a liability under the carbon price mechanism. 

Biodiversity Fund

The Australian Federal Government has announced that revenue from the carbon price will soon begin flowing to support biodiversity protection & landscape restoration projects across Australia.

The first round of recipients of the Federal Government’s Biodiversity Fund provided practical examples of how land managers could help reduce carbon pollution, while at the same time protecting Australian wildlife.

The land sector accounts for close to a quarter of Australia’s annual carbon emissions, but also holds the potential to deliver significant reductions through the protection & restoration of our carbon sinks.

ASBG members with significant land holdings can access new sources of funding to achieve lasting conservation benefits, rather than short-term fixes. Terrestrial carbon storage was a critical part of Australia’s response to climate change. Any scaling back of the carbon price would leave farmers & land managers vulnerable to the budget cycle.

The Yintjingga Aboriginal Corporation’s is leading by example with a project to enhance biodiversity values across Traditional Lands on the east coast of Cape York Peninsula. There is also a biodiversity restoration project in south western WA called the Save the Black Cockatoo Trust Fund’s habitat reforestation.

The Biodiversity Fund has been established to use a portion of revenue from the carbon price to support initiatives that store carbon in the landscape, while at the same time helping to restore or manage Australia’s biodiversity. The Fund will invest $946 million over six years, beginning in 2012.

If the carbon price is repealed, the Government would have to find these funds though annual federal budgets rather than from the guaranteed revenue raised by putting a price on the top 250 polluting companies.

The top 250 polluters?

We have had plenty of notice that a price signal would be applied to greenhouse gas emissions.

This week the Australian Federal Government released Liable Entities Public Information Database (LEPID): the official list of the 250 biggest polluters that will pay the Carbon tax.

It is no surprise that many ASBG members are on the list.  Those of you who do make the list have an opportunity to reduce your carbon emissions and in doing so can reduce  the impacts on your shareholders and/or your customers (which is kind of the point after all).