Guilt Offset

In this week’s blog post, various forms of offsets are discussed. 

It may be useful to consider the parody website which offers offsetting of one's fidelity.

Carbon Offsets

The Australian Government introduced the National Carbon Offset Standard (NCOS) on 1 July 2010. The NCOS provides national consistency and consumer confidence in the voluntary carbon market.

The standard:

·           provides guidance on what is a genuine voluntary carbon emissions offset and

·           sets minimum requirements for calculating, auditing and offsetting the carbon footprint of an organisation, product or event to voluntarily achieve 'carbon neutrality'.

In the lead up to a Federal Election later this year, it is still unclear what the Federal Opposition’s policies are on carbon offsetting and the voluntary carbon market.

Environmental Offsetting

Environmental offsets were established by the former Qld Government to replace environmental values lost through development that supports a rapidly growing economy and population.

In Queensland, environmental offsets were administered under the Queensland Government Environmental Offsets Policy (QGEOP) but it still unclear whether the current Government supports this concept. 

The purpose of the QGEOP was to:

·         provide a foundation of guidelines and principles for the development, operation, monitoring and review of new and existing specific issue offset policies and

·         provide a supporting framework for the management of offsets in Queensland.

Some of the QGEOP appears to have been removed from the Department of Environment and Heritage Protection website.

There are a number of other offset policies under the Qld Government Environmental Offsets Policy which can still be accessed via the environmental offsets section.

Vegetation Offsetting

Vegetation management offsets in Queensland, introduced by the previous Qld Government commenced on 1 July 2008 were administered under the Policy for Vegetation Management Offsets.

Proposed reforms to relax Vegetation Management laws have been referred to the State Development, Infrastructure and Industry parliamentary committee but it is still unclear whether the provisions for Vegetation offsetting will be retained or not.

Many of the policies are no longer available on the Department of Environment and Heritage Protection Website.

Vegetation Management was a statutory policy that formed part of the broader vegetation management framework designed to regulate the clearing of native vegetation throughout the state.

Prior to the last Qld State election, Campbell Newman promised that the LNP would retain the current level of statutory vegetation protection.  The introduction of amendments to Vegetation Management laws seem contrary to this assertion.

Biodiversity Offsetting

Researchers from the National Environmental Research Program's have been considering the effectiveness and the technicalities of biodiversity offsetting rather than the moral and philosophical issues.

The former Queensland Government had developed the Queensland Biodiversity Offset Policy with the intent to increase the long-term viability of the state’s biodiversity where residual impacts from development on an area possessing state significant biodiversity values cannot be avoided or minimised.

The policy is a specific-issues offset policy under the Queensland Government Environmental Offsets Policy (QGEOP) previously mentioned.

Under the Biodiversity Offset Policy, there were certain development activities that might trigger the requirement for a biodiversity offset.

Many of these triggers are now being removed or reviewed.

• The Sustainable Planning Act 2009  is being simplified.
• Development in the coastal zone under the Coastal Protection and Management Act 1995,
• Environmentally relevant activities have been reviewed under Green Tape Reduction,
• The State Planning Policy 2/11 (SPP 2/11) is under review and a temporary Planning Protection Policy is currently in place.

The China First Coal Project is entering the last stages of review for its proposed coal mine in Queensland’s Bimblebox Nature Refuge. The proposal suggests protecting about two hectares of remnant bush for every one hectare of the nature refuge that is affected by the mine.

It remains to be seen if the Qld Government will just revoke the protected status of the Bimblebox Nature Reserve or whether biodiversity offsets will be required. 

Questions still remain as to whether or not biodiversity offsetting could balance out the impact developments have on the environment.  These questions may be moot, if the Qld Government removes the requirements for biodiversity offsets.

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).