Chapter 7
Related issues
7.1
This chapter considers a number of other issues raised during the
committee's inquiry, including:
-
the importance of the Renewable Energy Target (RET);
-
carbon farming, including abatement opportunities using soil carbon
under the Direct Action Plan and interaction of the ERF with the Carbon Farming
Initiative; and
-
other components of the Direct Action Plan.
Renewable Energy Target
7.2
Submitters and witnesses emphasised the importance of other schemes as
part of the mix of policies to reduce Australia's greenhouse gas emissions. It
was pointed out that, if the Clean Energy Package were repealed, and in the
absence of a carbon price and an overall limit on emissions, these schemes
would become even more important to help Australia meets its emissions
reduction targets.[1]
One of the key schemes raised in evidence was the RET. As the Grattan Institute
submitted:
Although the Direct Action Plan does not explicitly include
the RET, an inquiry into the effectiveness and efficiency of the Government's
climate change policy is not complete without reference to the RET. This is
because the RET contributes to the effectiveness of the ERF in reducing
emissions.[2]
Overview of the RET
7.3
The RET creates financial incentives to promote the deployment of renewable
energy and reduce greenhouse gas emissions in the electricity sector. The
current RET scheme sets a target of 45,000 GWh of electricity generation from
renewable sources by 2020 (representing 20% of projected demand). It operates
in two parts, as the Large Renewable Energy Target (LRET) and the Small-Scale
Renewable Energy Scheme (SRES). The LRET covers commercial-scale renewable
power generation, and sets a target of 41 000 GWh in 2020. The balance of
renewable power generation above this figure will be made up of units installed
under the SRES. The schemes are underpinned by the Renewable Energy
(Electricity) Act 2000.[3]
7.4
Several submissions pointed out that the RET has been a very successful
carbon abatement measure. The Clean Energy Council described the RET as
'Australia's largest and most effective carbon abatement policy, as well as
being a very effective policy for stimulating investment in new generation
capacity'.[4]
Mr Kane Thornton from the Clean Energy Council told the committee that their
analysis showed that the RET will over its lifetime 'deliver some 380 million
tonnes of carbon abatement'.[5]
Mr Erwin Jackson from the Climate Institute noted that the RET produces:
...200 million tonnes of emissions reductions and about $20
billion of investment in Australia through clean energy, mainly in regional
areas.[6]
7.5
Others pointed out that the RET is a relatively cost-effective measure
to reduce greenhouse gas emissions. For example, Ms Kellie Caught from WWF‑Australia
told the committee that:
The RET has already had significant benefits in contributing
to reducing emissions in Australia's energy sector at a reasonably low cost to
consumers, accounting for around three per cent of household bills...some
renewables such as onshore wind are already cheaper than new-build fossil fuel
alternatives...by 2030 the most cost-effective energy option will be solar. The
RET will help accelerate the transition to competitive renewable energy and
drive emission reductions.[7]
7.6
Mr Thornton from the Clean Energy Council also noted that the cost of
the RET is coming down as the 'cost of renewable energy continues to trend
downwards'.[8]
7.7
Mr Oliver Yates from the CEFC also pointed out that the RET 'has a broad
based effect':
Wind is a very small part of the sector that is benefitting
from the RET. We are seeing numerous projects, particularly in the agribusiness
sector—in biogas, in biofuels, in the ethanol sector—where the agricultural
business are seeking out ways to reduce emissions, and they are also
benefitting from the RET.[9]
Interaction between the RET and the
Direct Action Plan
7.8
It was suggested that the RET and other measures to reduce Australia's
greenhouse gas emissions, including the Direct Action Plan, are inextricably
linked. For example, Mr Tony Wood, from the Grattan Institute, observed that:
....the way in which the Renewable Energy Target and the
Emissions Reductions Fund work together is quite different from the way in
which the Renewable Energy Target would work under the scope of an emissions
trading scheme. Under the Direct Action program of the current government, they
work together. One affects the other and, to some extent, a review of one that
ignores the other is going to be somewhat limited.[10]
7.9
The CEFC similarly submitted that 'the effectiveness of Direct Action
and the ERF is co-dependent on what other policy remains in place', including
the RET.[11]
7.10
Indeed, Ms Kirsten Rose, from the Sustainable Energy Association,
expressed the view that the success of the Direct Action policy hinges on the
RET:
The question of whether Direct Action can achieve our
abatement targets can only truly be answered by considering the future of the
RETs. With the RET, Direct Action can be more effective and do far less of the
heavy lifting with regards to emissions reductions.[12]
7.11
Infigen Energy warned that:
Any reduction in the 2020 LRET target will inevitably
increase greenhouse gas emissions from the electricity sector resulting in
higher costs for Direct Action to achieve the Government's policy. If the
41,000GWh LRET target in 2020 is significantly reduced, then the cost of Direct
Action will, likewise, be significantly increased.[13]
Reviews of the RET
7.12
On 17 February 2014, the Minister for Industry and the Minister for the
Environment released the terms of reference for a review into the RET by a
government-appointed panel. The Ministers explained that the review 'upholds a
clear commitment that the Coalition took to the election, to review the RET to
make sure it is working efficiently and effectively'.[14]
The review will consider:
...the contribution of the RET in reducing emissions, its
impact on electricity prices and energy market, as well as its costs and
benefits for the renewable energy sector, the manufacturing sector and
Australian households.[15]
7.13
This RET review follows a Climate Change Authority review completed in
December 2012. That comprehensive review found that the RET has a continuing
role to play in supporting investment in renewable generation. Among other
matters, the Authority recommended that the frequency of scheduled reviews of
the RET should be amended from every two years to every four years to promote
greater investor confidence. The Authority also recommended that the target
should remain fixed in terms of gigawatt hours to provide confidence to
investors. Essentially, the Authority sought to leave the broad design of the
RET scheme unchanged, but suggested changes to contain costs and improve scheme
efficiency.[16]
7.14
Meanwhile, the Climate Change Authority is still obliged under the Renewable
Energy (Electricity) Act 2000 (Cth) to conduct another statutory review of
the RET by the end of this year. The Climate Change Authority advised the
committee that it was not pursuing any work related to a review of the target
at this stage, given the uncertainty surrounding the bill to abolish the Climate
Change Authority. However, it is conducting some research work which 'could
usefully be available to be fed into reviews' of the RET in future.[17]
7.15
Several witnesses noted that recent and current reviews of the RET are
causing considerable uncertainty in the renewable energy sector.[18]
This uncertainty has been impacting negatively on investment in the sector and
resulted in a number of projects being put 'on hold'.[19]
The Clean Energy Council submitted that there needs to be 'an end to the
constant reviews of the RET':
The RET has undergone regular and substantial reviews since
it was first designed in the late 1990s. The 20 per cent target was legislated
in 2009 and enhanced in 2010. This was followed by a legislated review of the
scheme in 2012, and an expected review of the scheme in early 2014. Each review
creates uncertainty and results in a slowing or deferment of investment in
renewable energy...the upcoming review should be the last review of the scheme
until 2020.[20]
7.16
In contrast, the ESAA observed that:
...when the RET was originally designed it was envisioned to be
pushing renewable energy into a growing market. What we have seen since 2008 is
a market that is shrinking, yet the renewable energy target is still pushing
new supply into that market. So the effects that we are now seeing are quite
different from what was envisaged.[21]
7.17
Many submitters were concerned about the current non-statutory review of
the RET and that there may be a weakening of the RET. Many urged for the RET to
be retained in its current format as a fixed target—or even increased.[22]
Others warned that any weakening of the RET would increase the cost of
achieving emissions reductions targets under the Direct Action Plan. For
example, Professor Ross Garnaut warned that, if policies such as the RET were
weakened, this 'would increase the load that had to be carried by the Emissions
Reduction Fund, and the fiscal cost of carrying the load'.[23]
Ms Rose from the Sustainable Energy Association agreed that:
Any move to relax the RET will mean that the emissions
reduction hurdle will only be higher for the government's Direct Action policy
and therefore more costly.[24]
7.18
However, in terms of interaction between the ERF and RET, the Department
of the Environment advised the committee that the RET review is being conducted
by an 'expert reference panel' supported by a secretariat in the Department of the
Prime Minister and Cabinet, and 'is an entirely separate process to our ERF
considerations'.[25]
Carbon Farming
7.19
This section considers carbon farming, and in particular:
- opportunities for emissions abatement under the ERF using soil
carbon; and
-
the interaction between the ERF and the CFI.
Soil carbon
Soil carbon and soil sequestration
7.20
The original 2010 Direct Action Plan placed a heavy emphasis on
abatement (emissions reductions) from sequestration[26]
of carbon into soil. It anticipated that 60% of abatement, or 85 million tonnes
per annum of CO2,[27]
would come from 'soil carbon' – that is, changed land management practices that
take carbon out of the air and incorporate it into soil. The Direct Action Plan
claimed that:
The single largest opportunity for CO2 emissions
reduction in Australia is through bio-sequestration in general, and in
particular, the replenishment of our soil carbons. It is also the lowest cost
CO2 emissions reduction available in Australia on a large scale.[28]
7.21
In contrast, the ERF Green Paper only briefly mentions soil carbon in
the context of land sector abatement in relation to the CFI.[29]
7.22
At the time of writing, there are 22 carbon farming methodologies
approved under the CFI, none of which relate to soil carbon. The methodologies
currently relate to agricultural projects (dairies and piggeries), vegetation
projects (regrowth, reforestation and savannah burning) and landfill and
alternative waste treatment (landfill gas and waste diversion and capture).[30]
7.23
However, on 18 March 2014, the Minister announced that the land
management activity 'sequestering carbon in soil in grazing systems' would be
added to the Carbon Farming Initiative Regulations, which in turn 'paves the
way for developing methodologies for soil carbon sequestration, under which
projects can participate in the Emissions Reduction Fund'. The Minister further
announced that:
This initial methodology is expected to be ready in mid 2014,
in time for land managers with soil carbon sequestration projects to
participate in early rounds of the Emissions Reduction Fund soon after its
commencement on 1 July 2014.[31]
7.24
Some, such as the Wentworth Group of Concerned Scientists, pointed out
the potential of 'carbon farming' more generally to make a contribution, both
to climate change and to other issues such as land degradation.[32]
However, there was considerable debate during the committee's inquiry about the
role, relative contribution and potential of soil carbon sequestration to
reduce emissions.[33]
7.25
Some were optimistic about the role of soil carbon.[34]
For example, Carbon Farmers of Australia disputed the idea that soil carbon
might only be a 'minor player with not much potential to contribute to climate
action' as 'patently wrong and based on ignorance of the facts'.[35]
They suggested that in three to five years they expected a cost of around $10
to $15 per tonne for soil carbon abatement, depending on a number of factors.[36]
7.26
However, many cautioned against an over reliance on soil carbon. The Commonwealth
Scientific and Industrial Research Organisation (CSIRO) told the committee that
soil carbon 'is not likely to make a substantial contribution to national
abatement activities'.[37]
CSIRO explained that building up soil carbon is a 'challenging task' and
estimated that by 2020 around 2–3Mt
of abatement 'might be possible'.[38]
CSIRO further cautioned that 'what is required is that methodologies deliver
confidence in the credited level of abatement, not necessarily precision in the
sequestered level of carbon'.[39]
7.27
CSIRO acknowledged that there is potential to increase soil carbon 'on
the extensive savannah areas of Australia through changes in burning regimes
and so forth, but those rates are very low and will take centuries of changed
practices to accumulate'.[40]
CSIRO suggested that the major opportunities in the land sector could instead
be found in 'afforestation, avoided deforestation, livestock methane and
increasing rangeland and savanna carbon stocks through changed fire regimes.'[41]
7.28
The NFF also acknowledged that 'there appears to an over reliance on the
ability for soil carbon to contribute significant sequestration opportunities'
and that it was cognisant that research findings indicated that the
'opportunities are likely to be limited.'[42]
7.29
Another key concern was that the potential price of abatement through
soil carbon would be too high compared to other sources of abatement.[43]
Professor David Parnell described soil sequestration as 'difficult and
expensive' and cautioned against it as a cornerstone of any climate change
policy:
...we would caution against making an assumption that it will
play a very major role in the overall portfolio of abatement activities...it
probably has a reasonably minor role to play...[44]
7.30
Mr Tas Thamo agreed that:
....the real potential of soil carbon as a means to mitigate
climate change is much more limited than some believe. It would be very
difficult to design and implement a soil carbon policy in a way that is
effective and efficient, and there is a high risk that it will redirect policy
efforts away from superior approaches.[45]
7.31
Mr Thamo also warned that soil carbon is only a 'short-term solution'
because carbon is difficult to retain in the soil, and that 'sequestration
basically offers a finite amount of abatement. You can only store so much
carbon per area of land'.[46]
As a result:
...creating an efficient and effective policy for carbon
sequestration in soil is extremely difficult. There is a high risk of paying
farmers to sequester soil carbon but getting minimal greenhouse gas benefits. Creating a system that would actually
provide genuine mitigation unavoidably involves high transaction costs and
conditions that make it somewhat unattractive to farmers. Simpler systems, with
lower transaction costs, would be more attractive to farmers but probably
deliver little abatement benefit in the long term, and potentially make
emission levels worse than having no policy...[47]
7.32
Others cautioned against reliance on 'offsets', such as soil carbon, on
more general principles. Sustainable Energy Now submitted that 'Australian
emissions must be reduced, rather than offset to meet our targets and tree
planting and soil carbon will not do this'.[48]
And as Mr Paul Pollard told the committee:
...if you have a limited amount of funds, the more you spend on
offsets, the less you spend on abatement...if you spend all your money on
offsets...you are not really addressing the cause of the problem...the less
offsetting at the expense of abatement the better.[49]
7.33
In response to questioning as to whether soil carbon abatement would be
viable under the ERF low-cost abatement abatement approach, representatives
from the Department of the Environment advised that:
...these questions about these sorts of costs are best answered
on the back of actual experience with doing the projects...We have some internal
work that we have done looking at the costs. The transaction costs have come out
a little lower...it really is going to turn around actually seeing how it rolls
out on the ground and what people's experience of it is. As with other aspects
of the CFI, it will be something that farmers will need to make decisions
about. No-one will be required to do these sorts of projects.[50]
Interaction between the ERF and the
CFI
7.34
As noted elsewhere in this report, it is proposed that the ERF will
build on the existing arrangements under the CFI for crediting emissions
reductions.[51]
However, the Green Paper did seek views on options for 'streamlining' the CFI.[52]
7.35
Many expressed support for the CFI and were pleased that 'the major
elements of the CFI have been retained'.[53]
Others recommended a number of changes to the CFI. For example, AFPA suggested
that 'the cumbersome and lengthy administrative processes for methods approval
under the CFI' needed to be addressed.[54]
7.36
Others expressed concern that the CFI verification requirements might be
weakened, for example, by reducing auditing requirements, consultation periods
and the permanence requirement from the present 100 years to just 25 years.[55]
In response to questioning on the permanence requirement, the Department of the
Environment advised that:
...the development of a 25-year permanence option could involve
appropriate discounting of crediting under that option, compared to a 100-year
permanence arrangement.[56]
7.37
However, the key concern was the financial viability of the CFI without the
carbon price and with a focus on lowest cost abatement as proposed under the
ERF. For example, Dr Michael Battaglia from the CSIRO told the committee that
'significant CFI abatement will be impeded through the transaction costs of
participating at a low carbon price'.[57]
WWF-Australia told the committee that:
The ERF, as currently proposed, is unlikely to deliver a
significant amount of abatement credits from the land sector, due to
competition from larger and cheaper sources of non-land sector abatement.
Instead it is anticipated that the ERF will be dominated by lower cost forms of
abatement, with short payback periods (e.g. energy efficiency), crowding out
other more costly forms of abatement. Reforestation and other land sector
activities are likely to be constrained by the relatively high cost of
implementation, versus the low forecast auction prices driven by the ERF.[58]
7.38
To overcome this problem, it was suggested that the ERF should be
'banded' – that is, giving particular categories of abatement different pricing
structures.[59]
It was suggested the projects developed under existing CFI methodologies should
be banded, to ensure funding allocation for categories of abatement projects
that have a different cost per tonne of abatement.[60]
Mrs Louisa Kiely, from Carbon Farmers of Australia, told the committee that
'banding' would mean that soil carbon and land sector abatement would not need
'to compete with other 'potentially very cheap offsets'.[61]
7.39
However, WWF-Australia observed:
Increasing the price paid for abatement under the ERF is
likely to significantly boost abatement from the land sector. Even under the
high auction price scenarios, however, the land sector is projected to deliver
only a small fraction of the total abatement required to achieve Australia's
2020 emission reduction goals.[62]
7.40
There was considerable uncertainty about the future of existing CFI
projects under the ERF system. For example, the Kimberley Land Council were
concerned that the Direct Action Plan and the CFI should not 'disadvantage
remote Australia communities' and submitted that the CFI and ERF design should
recognise and support Aboriginal carbon projects such as savannah burning.[63]
Origin also submitted that:
...on equity grounds, existing projects which are accredited
under the CFI and have already spent a significant amount of time and money
securing these approvals in good faith should be allowed access to the ERF.[64]
7.41
Concern was also expressed about existing CFI projects becoming
'stranded' when the focus shifts to lowest cost abatement under the ERF:
...the cost of abatement under CFI is typically in double
digits...That is one of the risks that we see with an absolute dogged
determination to achieve absolute lowest cost abatement: you lose other
benefits like the social...and broader benefits of a project like savanna
burning. That could be the case with many CFI projects—biodiverse
reforestation, for example. That is very hard to achieve at anything close to
$3.60 a tonne.[65]
7.42
Mr Bret Harper from Reputex for WWF-Australia told the committee that:
A lot of the large potential sources of abatement from the
land sector are in the form of carbon farming through land use and forestry,
and those are portions of the CFI [Carbon Farming Initiative] that would not
respond to the low carbon prices. They really require certainty around the
investment that is going to be given to them and also a minimum price over time
to make those kinds of land use changes and unlock that abatement.[66]
7.43
Ms Skarbek from ClimateWorks Australia remarked that the CFI:
...was meant to offer revenue to farmers who had an opportunity
to store carbon in their soil or through trees. The challenge is: what is the
price that they can be paid for that? Under the current legislation, they can
be paid the equivalent of the carbon price. So at the moment, this year, they
could strike a deal with someone who would be liable to pay the $24 carbon
price ...Those companies can choose to purchase a carbon farming project instead,
and therefore pay the farmer the $24 instead...The uncertainty is what will
happen in future years given the current government's policy.[67]
7.44
In response to the concerns raised about the future of the CFI under the
ERF, the Department advised that:
There will be transitional arrangements for people who are
generating credits under the CFI to move quickly into the ERF.[68]
7.45
The Department went on to state:
Anyone generating credits in the ERF arrangement, once the
ERF commences, will be able to bid those units in, particularly from CFI projects,
into the auctions or the purchasing arrangements.[69]
Other components of the Direct Action Plan
7.46
As noted in Chapter 5, the Direct Action Plan originally proposed other
initiatives such as a 'One Million Solar Roofs Program'; 'Solar Towns and
Schools'; 'Geothermal and Tidal Towns'; 'Clean Energy Employment Hubs', and
'Urban Forests and Green Corridors'.[70]
7.47
The initiatives now listed under the Cleaner Environment Plan are:
- One Million Solar Roofs Programme to provide $500 rebates to
support the installation of one million rooftop solar energy systems over 10
years. This will be capped at 100 000 rebates per year ($50 million per year).
-
Solar Towns and Solar Schools programmes, under which $50 million
will be allocated for at least 25 Solar Towns and a further $50 million for 100
schools. The projects will be developed over six years ($100 million per year).
-
Twenty Million Trees will be planted by 2020 in a programme that
will commence mid-2014. The funding commitment for Twenty Million Trees is not specified
in the Plan for a Cleaner Environment.[71]
7.48
At the time of writing of this report, further detail on these
initiatives was unavailable.
7.49
The status of other proposals contained in the 2010 Direct Action Plan
are outlined in Appendix 4: some initiatives have been retained (albeit with a
reduced budget), others have been abandoned and the status of others is
unclear.
Solar Roofs, Towns and Schools
7.50
Some submissions queried the need for the Solar Roofs, and Solar Towns
and Schools programs. For example, Origin submitted that 'current support for
solar PV systems should be moderated', noting noted that, since the Direct
Action Plan was first announced in 2010:
...Australia has already eclipsed the one million solar roofs
mark and based on our internal modelling is on track to deliver more than a
further million solar roofs by 2020, based on current policy settings.[72]
7.51
Energetics similarly suggested that:
Putting aside work that has shown that rebates are the least
economically efficient means of promoting action, the recent history of the
uptake of solar PV in Australia driven by the changing economics of solar PV
has clearly indicated that an additional rebate from the Commonwealth is not
required to support these activities.[73]
7.52
AUSTELA agreed that it was not clear why these programs are required:
...given that solar PV is already a cost effective
investment, that new retail financing models are emerging making solar PV more
accessible and affordable for Australian households and businesses, and that
all Australian governments have actively been withdrawing subsidies from such
systems over recent years. Investing further government funds in small scale
solar PV installations has serious potential to distort the existing market for
no discernable national benefit. Current policy settings have already delivered
a million solar roofs in Australia in the last five years, high rates of
deployment of solar PV continue despite withdrawal of government subsidies, and
there is ample evidence of the damage, and unsustainable 'bubbles', caused by
ad hoc interventions.[74]
7.53
The Clean Energy Council supported the commitment to a Million Solar
Roofs, but cautioned that the scheme needs to be carefully considered so that
it does operate alongside existing measures and works effectively.[75]
The Clean Energy Council suggested that the program should have a focus of
helping low-income Australians, including those in the rental market or public
and social housing, to access solar PV and solar hot water.[76]
Twenty Million Trees
7.54
According to the Department of the Environment's website:
Twenty Million Trees will be planted by 2020 in a programme
that will commence mid-2014. The Twenty Million Trees Fund will help green our
urban and regional areas and create new green corridors, while making a contribution
to meeting Australia's target of reducing greenhouse gas emissions by five per
cent below 2000 levels by 2020.[77]
7.55
The funding commitment for Twenty Million Trees is not specified in the Plan
for a Cleaner Environment, although the original Direct Action Plan
allocated a total of $50 million for the Green Corridors and Urban Forests
commitment, which committee to the planting of an additional 20 million trees
by 2020. However, the original Direct Action Plan also estimated that the cost
would be around $5 per tree, yet only allocated $50 million for 20 million
trees.[78]
7.56
The Government recently released further information about the so-called
'Green Army', in which teams of Australians aged 17-24 will be deployed across
the country to help communities deliver local conservation outcomes. However,
this information makes no mention of the Twenty Million Trees initiative.[79]
This is despite the fact that an earlier version of the information suggested
that the Green Army might assist in the process of planting the Twenty Million
Trees.[80]
7.57
In relation to the Twenty Million Trees initiative, the NFF told the
committee that it had not 'seen any detail on what is proposed by the
government in the 20 million trees program'.[81]
NFF supported the initiative 'provided it remains a voluntary program, and does
not target planting trees on productive agricultural land'.[82]
7.58
The committee understands from a recent speech given by the Environment
Minister, that the 20 million trees will be 'planted in and around our cities
over the coming years'.[83]
7.59
The Nursery and Garden Industry Australia also supported the Twenty
Million Trees proposal, but noted that:
...the Green Corridors and Urban Forests component is budgeted
at $50 million dollars over four years. This equates to $2.50 per tree planted.
It is unclear how this $50 million will be allocated in terms of operational
costs, plant procurement, establishment and maintenance costs. Although this
budget is feasible and will allow the planting of 20 million trees, we believe
that additional funds should be allocated to this component to ensure long
terms success.[84]
Committee comment
7.60
The committee is astounded that the Government has appointed a separate
panel to conduct yet another review of the Renewable Energy Target (RET),
despite the recommendations of the Climate Change Authority that reviews should
be conducted every four years. The committee is deeply concerned by the
evidence that constant reviews of the RET are causing considerable uncertainty
in the renewable energy sector and hampering investment in the industry. In
turn, the evidence was that this is hindering Australia's efforts to meets its
greenhouse gas reduction targets. Previous reviews of the RET have shown the
policy is delivering clean energy, creating jobs, driving significant
investment across Australia and reducing Australia's carbon pollution, at a
relatively minimal cost. Further, the committee acknowledges the evidence that
if the RET were to be weakened, this would increase the load on other policies
to reduce Australia's greenhouse gas emissions. The committee is persuaded by
the evidence that the RET needs to be retained in its current format, if not
increased.
Recommendation 12
7.61
The committee recommends that the Renewable Energy Target be retained in
its current format.
Soil carbon and the Carbon Farming
Initiative
7.62
The committee notes that the original Direct Action Plan placed a large
emphasis on soil carbon. This focus on soil carbon is notably absent from the
recent Emissions Reduction Fund Green Paper. Indeed, the committee heard
evidence from the CSIRO and others that soil carbon will be difficult and
expensive and is unlikely to make a significant contribution to greenhouse gas
abatement in Australia. The committee recognises the evidence that land sector
abatement activities have other benefits, such as repairing degraded
landscapes, improving water quality and soil health, as well as community
benefits. However, these activities need to be managed appropriately and
carefully and in this regard, the Carbon Farming Initiative is critical.
7.63
The committee welcomes the continued operation of the Carbon Farming
Initiative, but is concerned about proposals to 'streamline' the Carbon Farming
Initiative (CFI). At this stage, there is very little detail available as to
government's precise intentions in this regard. The committee is also concerned
about the viability of, and uncertainty surrounding, existing CFI projects and
how they will be treated under the Emissions Reduction Fund. The committee
considers that this is an issue that needs to be addressed.
Recommendation 13
7.64
The committee recommends that, once further details are available in
relation to the proposed streamlining of the Carbon Farming Initiative,
including the changes to permanency rules and the methodologies to be
implemented, that the proposals be referred to a Senate Committee for inquiry
and report.
Recommendation 14
7.65
The committee recommends that, in the event the Emissions Reduction Fund
proceeds, measures are put in place to ensure the viability of existing
projects prior to 1 July 2014 under the Carbon Farming Initiative.
Other components of the Direct
Action Plan
7.66
The committee found that there is little information available about the
implementation of other aspects of the Direct Action Plan, such as the 'One
Million Solar Roofs Program'; 'Solar Towns and Schools'; and 'Twenty Million
Trees'. The committee acknowledges the evidence querying the need for rebates
in relation to solar PV and hot water, given the rapid uptake in recent years
and the issue of government intervention in this area. Nevertheless, the
committee considers that there could be some merit in the Solar Roofs and Solar
Towns and Schools proposals, and supports the evidence suggesting that the programs
focus on helping low‑income Australians to access solar PV and solar hot
water.
Recommendation 15
7.67
The committee recommends that the 'One Million Solar Roofs' and the 'Solar
Towns and Schools' program focus on helping low-income Australians to access
solar PV and solar hot water and not be paid for out of the Australian
Renewable Energy Agency's existing budget.
7.68
The committee received very little evidence in relation to the Twenty
Million Trees proposal, perhaps reflective of the fact that there is very
little information available about the program. The committee therefore finds
it difficult to make any comment on this initiative, and recommends that the
government release further information about the proposal and its
implementation.
Recommendation 16
7.69
The committee recommends that the Government provide further details
about the proposed Twenty Million Trees program and its implementation.
Senator the Hon Lin
Thorp
Chair
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