Wednesday, July 28, 2010

Timmins forestry firm turning carbon into cash

Timmins forestry firm turning carbon into cash


Mikro-Tek rapid growth tech recognized by UN


By: Nick Stewart

Mark Kean, president of Mikro-Tek, displays just some of the cultures being grown in the Timmins laboratory to prepare for enhanced tree growth in Chile.
Mark Kean, president of Mikro-Tek, displays just some of the cultures being grown in the Timmins laboratory to prepare for enhanced tree growth in Chile.

Among the foothills of Chile's Andean mountain range lies the handiwork of Timmins environmental bio-tech firm Mikro-Tek, whose rapid tree growth project is turning it into a global carbon credit trader.

After undergoing rigorous inspection by international auditors, accountants and forestry experts, the company's proprietary forest management technology is now registered by the United Nations.

This makes Mikro-Tek the first Canadian company to meet the stringent Kyoto Protocol registration process for forestry projects, and just one of seven such small-scale forestry projects worldwide.

"It's been an awful lot of hard work, but we're proud of this designation," says Mark Kean, president of Mikro-Tek.

"This puts us in a good position for the future and the types of things we have planned."

The move now gives the company the official green light to trade carbon credits between countries that have ratified the Kyoto Protocol.

Through this system, credits are created through the reduction of greenhouse gases in developing countries, which in the case of Mikro-Tek is accomplished through the absorption of carbon by the trees they grow in places like Chile. These credits can then be sold to developed countries who need to meet emissions targets as part of a system to achieve a sort of global balance.

It's a process that's already begun, with Mikro-Tek regaining some of its initial investment costs by selling some of the credits produced through the Chilean project to various European states.

Since 1990, the company has studied the use of natural soil microbes, known as mycorrhizae, to enhance the speed of tree growth, applying them to forest seedlings prior to planting or through irrigation.

It's an effort with proven results: a three-year study done by the company with 10 million seedlings in the late 1990s showed average growth increases of 25 per cent. Re-examination of some of the trees since then has indicated the growth rate has held steady, and in some cases, has actually improved.

It's a proprietary technology Kean has used to help re-green mine tailings areas with the likes of Vale, Xstrata Nickel and Goldcorp.

This success is further enhanced in places like Chile, where trees naturally grow faster than in Canada due to a year-round growing season.

It's something that prompted the establishment of a branch office in the country. Through this, Kean reached out to a coalition of small-scale Chilean farmers who traditionally grow grapes and citrus fruits in areas where forests were cleared 100 years prior to make room for agricultural work.

In the back end of these lands, however, are non-productive hilly regions where farming is all but impossible due to the lack of any real irrigation.

With that, Mikro-Tek struck deals to reforest these clearings, with the farmers needing only to build fencing to protect the young trees from hungry cattle or roving mountain goats.

Back at the Timmins biotechnology facility, testing was conducted to adapt the soil bacteria from its traditional use in Boreal-forest environments to those in Chile. It has since been applied successfully to pine and eucalyptus growth projects in the area, providing UN approval and hope for the company.

Despite the positive results, using forestry projects as a basis for carbon credits has its own challenges. Unlike solar and windmill-driven projects, the amount of carbon credits generated by trees can be challenging to quantify. Trees absorb different amounts of carbon depending on their stage of growth, meaning projects such as those in Chile require updating and monitoring through satellite photography and site visits.

Unexpected events can also threaten the project, as Mikro-Tek discovered when an earthquake registering 6.8 on the Richter Scale shook the region in 2003. The loss of trees to disasters or weather means a smaller carbon capture and a reduction in credits, though a forester hired by the company found no damage, thereby preserving the integrity of the project.

"There are lots of checks and balances to the system," says Kean.

With its Chilean success and UN registration under its belt, the company's plan is now to begin using things like its proprietary C-Trade Carbon Pool to allow investors to put up money for projects. In return, they would obtain the financial equivalent of carbon credits spread over a set period of time, something Kean likens to a mutual fund.

Plans also include the expansion of projects both in Canada and abroad.

Western Climate Initiative offers cap-and-trade


GRANTS PASS, Ore. — A coalition of seven western states and three Canadian provinces on Tuesday offered its most detailed strategy yet for controlling greenhouse gas emissions blamed for climate change, saying they hope it will stand as a model for national systems in the United States and Canada.

At the core is a cap-and-trade system that would go into effect in January 2012, gradually ramping down emissions levels. The system, which gives financial incentives to reduce carbon emissions, would start with power plants, then extend to large industrial producers and transportation.

The goal is to cut greenhouse gas emissions in the next 10 years to levels 15 percent below those in the year 2005.

Building on a less detailed strategy issued two years ago, the plan comes as Congress has been unable to produce a climate bill to address the same issues.

The document includes the first details of how the carbon auction would work, and it recommends that offsets from programs that store carbon would be limited to a fraction of total emissions. There would be a floor price on emissions, and the auction would be open to anyone.

Art Sasse, a spokesman for Pacificorp, which serves about 1.7 million electricity customers in the northwestern U.S., said the utility had not seen enough specifics about the plan to comment.

So far, only two states — California and New Mexico — and three provinces — Quebec, Ontario and British Columbia — are writing regulations in anticipation of joining the Western regional carbon auction when it begins in 2012, said Michael Gibbs, California's deputy secretary for climate change and co-chairman of the initiative.

The two states and three provinces account for 70 percent of the emissions produced by the signers of the strategy, creating enough liquidity to get the cap-and-trade system up and running, said Robert Noel de Tilly, climate change adviser for Quebec's Ministry for Sustainable Development, Environment and Parks.

An economic analysis estimated that fuel savings would offset the cost of investing in new more energy-efficient equipment to meet limits on carbon production, Gibbs said.

Not all of the states in the climate group are enthusiastic. The Utah Legislature has passed a resolution urging Republican Gov. Gary Herbert to pull out, and GOP Gov. Jan Brewer of Arizona has ordered the state not to adopt cap-and-trade.

The other states in the coalition are Montana, Oregon, Utah and Washington.

California Gov. Arnold Schwarzenegger said the coalition's plan is an important step toward reducing dependency on oil, increasing energy security, and creating jobs and investment.

"Action continues to be needed at the national and international levels to address clean energy and climate change, but California and the rest of the Western Climate Initiative partners are not waiting to take action," Schwarzenegger said in a written statement.

Jim Whitestone of the Ontario Ministry of Environment said the coalition hopes the cap-and-trade system will serve as a model for the United States and Canada governments.

President Barack Obama on Tuesday pledged to keep pushing for broad climate legislation, and the White House expressed fresh hope the Senate and House might strike a deal on a sweeping energy plan this year.

Robert Stavins, professor of business and government at Harvard University and director of the Harvard Environmental Economics Program, said he did not anticipate Congress taking action that soon, and he was skeptical anything could be achieved in the next two years if Republicans gain seats in the House and Senate. Republicans have strongly opposed creating a cap-and-trade system for carbon.

"Hence, it's not surprising that sub-national entities, such as states, will move forward on their own," Stavins said in an e-mail. "The state model will be less effective and more costly for what is achieved than a national cap-and-trade system would be, but it may be the second-best approach."

The strategy also called for linking up with other carbon markets in the East and Midwest, an approach Stavins said would make them more efficient.

___

Online:

Western Climate Initiative: http://www.westernclimateinitiative.org

Tuesday, July 27, 2010

Forest Cover Loss Indonesia: Norway $1 Billion

Forest Cover Loss in Indonesia, 2000-2005: The Starting Point for the Norwegian Billion to Reduce Deforestation

Overview
Up to 84% of Indonesia’s national greenhouse gas emissions arise from land use change and deforestation. This map shows the extent and location of forest cover loss in Indonesia—detected by satellite—for 2000 to 2005, when deforestation averaged 0.71 million hectares per year and Indonesia was the second-most deforesting country, following Brazil. Globally, Indonesia accounts for approximately 27 percent of GHG emissions from land use change and forestry.
Norway and Indonesia recently signed a letter of intent (LOI) worth $1 billion to reduce greenhouse gas emissions caused by loss of Indonesia’s forests. Through the LOI, Indonesia has agreed to a two-year moratorium on the conversion of natural forests and peatlands to other uses, such as palm oil plantations. In addition, Indonesia has pledged to move agricultural development from forests to already degraded lands. Through this agreement, Indonesia has pledged to reduce total national emissions by 26% relative to business as usual levels by 2020. With assistance from international partners emission reductions could reach 41%.

Sources
Forest cover loss data: Matthew Hansen et al., Global Forest Monitoring project, South Dakota State University

Forest cover density data: Vegetation Continuous Fields project, University of Maryland
Hansen, M.C., Stehman, S.V., Potapov, P.V., Arunarwati, B., Stolle, F., and Pittman, K., 2009, Quantifying changes in the rates of forest clearing in Indonesia from 1990 to 2005 using remotely sensed data sets, Environmental Research Letters, 4(3) doi: 10.1088/1748-9326/4/3/034001.

Climate Analysis Indicators Tool (CAIT) version 7.0. (Washington, DC: World Resources Institute, 2010).

Copyright
This work is licensed under the Creative Commons Attribution License. Cite “World Resources Institute.”
WRI Indonesia News and Information
Degraded Land, Sustainable Palm Oil, and Indonesia’s Future
What’s Next for Indonesia-Norway Cooperation on Forests?
Low Carbon Palm Oil for Indonesia?
Project POTICO: Palm Oil, Timber & Carbon Offsets in Indonesia
Other Featured WRI Maps

NZ Forest subsidy chopped

Forest-planting subsidy gets the chop
By Brian Fallow
4:00 AM Wednesday Jul 14, 2010
The Government is winding down a scheme to subsidise the planting of new forests, saying the emissions trading scheme makes it unnecessary.
Labour forestry spokesman Stuart Nash disagrees, saying a range of options is needed to encourage planting and the ETS doesn't suit everyone.
But critics of the afforestation grants scheme say it is badly designed and open to abuse.
About $16.5 million has been allocated under the scheme so far. But this year's Budget cut the funding for 2011/12 and 2012/13 from $7 million to $5 million a year. The scheme will then be closed, a year earlier than intended.
This frees up $6 million to be "reprioritised" towards the cost of executing the forestry-related aspects of the ETS, estimated to be about $8 million over the next two years.
Forestry Minister David Carter said that was mainly for the forestry allocation plan, making sure units distributed under the ETS were accurately allocated and registered.
"We are dealing with an allocation value of something in excess of $1 billion.
So we have to do our best to get that right."
He said that under the previous Government significant net deforestation had occurred so it had developed the afforestation grants scheme, which at least got some people interested in planting trees again.
"Now we have a credible emissions trading scheme established and we are seeing a significant increase in interest from rural landowners in planting trees. I don't think we need the afforestation grant scheme to get more trees in the ground."
But under the ETS eligible forest owners who opt into the scheme to earn credits for the carbon their trees lock up while they are growing, also accept liability for the emission of that carbon when the trees are harvested.
Nash said some were deterred by those potential liabilities. "The Government needs to have options available where landowners don't necessarily take up the carbon credits."
Under the afforestation grant scheme ownership of the credits generated by a new forest for its first 10 years remained with the Crown.
One forestry consultant spoken to by the Business Herald said although the scheme was supposed to be fiscally neutral, in practice up to twice as much had been paid out in subsidies as the carbon sequestered in the trees' early years would be worth.
"The industry loves it. But it's a rort," he said.
It had, however, helped to keep forestry nurseries in business during a particularly lean time.
Nash said it was a strength of the scheme that half of the funding available was administered by regional councils and could help them to meet sustainable land management objectives such as reducing erosion or improving water quality.
Other schemes to encourage afforestation remain, though both are under review. One is the East Coast forest scheme, aimed at erosion-prone country in the eastern North Island.
"It is being scaled back quite a lot and that is a worry as well," Nash said.
The other is the Permanent Forest Sinks Initiative which awards carbon credits for new permanent, as distinct from plantation, forests.
The more stringent environmental standards which need to be met to qualify for the latter make them more attractive to European Governments fastidious about the credits engendered by plantation forestry.
Carter said it was a bit rich for Nash to accuse him of taking a chainsaw to the afforestation grants scheme when Labour had presided over more than 30,000ha of net deforestation. That was the real chainsaw massacre.
"He does have a point," Nash said. "I acknowledge that."

ERA - First in Canada to receive gold level CCBA standard validation

ERA Carbon Offsets Ltd.: Community Ecosystem Restoration Program First in Canada to Receive Gold Level-Climate, Community and Biodiversity Standard's Validation

VANCOUVER, BRITISH COLUMBIA, Jul 14, 2010 (MARKETWIRE via COMTEX) -- ERA Carbon Offsets Ltd. /quotes/comstock/11v!esr (CA:ESR 0.25, 0.00, 0.00%) , through its 100% owned subsidiary ERA Ecosystem Restoration Associates Inc. (ERA), is pleased to announce that their Community Ecosystem Restoration Program (CERP) has received final validation to the Climate, Community and Biodiversity Alliance's (CCBA) Gold Level Project Design Standard as of June 24th, 2010.
The CCBA Project Design Standards evaluate land-based carbon mitigation projects in the early stages of development. The CCBA Standards were created to foster the integration of best-practice and multiple-benefit approaches into project design and evolution. The Standards identify projects that simultaneously address climate change, support local communities, and conserve biodiversity, while promoting excellence and innovation in project design.
In order to meet CCBA's "Gold Level Project Standard" a project must meet or surpass the following criteria:
"The Gold Level Climate Change Adaptation Benefits criterion identifies projects that will provide significant support to assist communities in adapting to the impacts of climate change. Communities and biodiversity in some areas of the world will be more vulnerable to the negative impacts of climate change. Land-based carbon projects have the potential to help local communities and biodiversity adapt to climate change by: diversifying revenues and livelihood strategies; maintaining valuable ecosystem services such as hydrological regulation, pollination, pest control and soil fertility; and increasing habitat connectivity across a range of habitat and climate types."
Dr. Robert Falls, ERA's Chief Executive Officer, commented: "In being the first in Canada to have attained the rigorous Gold Level Standard, ERA has again demonstrated its pioneering spirit and its capacity for developing high quality projects and carbon offset products for growing international carbon markets."
The third party validation was completed by KPMG Forest Certification Services Inc. The CERP project is the first project in Canada to be double validated to both the ISO-14064-2 standard and the CCBA Gold Standard.
CERP is a large scale urban ecosystem restoration program that began in the District of Maple Ridge in 2005, and now includes projects in the District of Mission, the City and Township of Langley, and Metro Vancouver. To date, CERP has generated over 700,000 tonnes of Verified Emission Reductions (VERs) for the international carbon markets. The VERs generated from CERP are serialized and registered on the international Markit Environmental Registry.
About CCBA
The Climate, Community and Biodiversity Alliance (CCBA) is a partnership between leading companies, non-governmental organizations (NGOs) and research institutions seeking to promote integrated solutions to land management around the world. With this goal in mind, the CCBA has developed voluntary standards to help design and identify land management projects that simultaneously minimize climate change, support sustainable development and conserve biodiversity. Website address http://www.climate-standards.org/index.html
About KPMG Forest Certification Services Inc.
KPMG Forest Certification Services Inc. (KPMG FCSI) is a wholly owned subsidiary of KPMG LLP, the Canadian member firm of KPMG International. KPMG FCSI is accredited to conduct forest management and chain of custody certification audits worldwide by the Forest Stewardship Council. KPMG FCSI's team of professional foresters, biologists, and environmental management systems assessors has been actively involved in the evolution of forest practices auditing for over eight years, and brings a wealth of auditing expertise to task in conducting each assessment.
http://www.kpmg.ca/en/
About ERA Carbon Offsets Ltd.
ERA is a Canadian pioneer in forest restoration and conservation carbon offset projects. The company's Community Ecosystem Restoration Program located in the Lower Fraser Valley, British Columbia, began in 2005 in the District of Maple Ridge, and has grown to include five communities including Metro Vancouver. ERA has delivered over 1,000,000 tonnes of carbon offsets to the voluntary market and is engaged in the development of forest carbon projects in Canada, Africa and the Hawaiian Islands to supply the North American pre-compliance market. ERA's clients and product users include Air Canada, Catalyst Paper, HSE - Entega, Rolling Stone Magazine, Shell Canada Limited, The Forest Carbon Group, and The Globe Foundation of Canada. ERA's carbon offsets are being validated to the ISO 14064, CCBA, and VCS standards.
Additional information on ERA can be found on the corporate website www.eracarbonoffsets.com or by contacting investor@eracarbonoffsets.com
On behalf of the Board of Directors of ERA CARBON OFFSETS LTD.
Robert Falls, Chief Executive Officer
FORWARD LOOKING STATEMENTS: This document includes forward-looking statements as well as historical information. Forward-looking statements include, but are not limited to, the continued advancement of the company's general business development, research development and the company's development of forest-based carbon offsets. When used in this document, the words "anticipate", "believe", "estimate", "expect", "intent", "may", "project", "plan", "should" and similar expressions may identify forward-looking statements. Although ERA Carbon Offsets Ltd. believes that their expectations reflected in these forward looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include fluctuations in the marketplace for the sale of carbon credits, the inability to implement corporate strategies, the ability to obtain financing and other risks disclosed in our filings made with Canadian Securities Regulators.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Contacts:
ERA Carbon Offsets Ltd.
Alex Langer
604-646-0400
alex.langer@eraecosystems.com
www.eracarbonoffsets.com
SOURCE: ERA Carbon Offsets Ltd.

TNC/WCS On-the Ground REDD experience

On-the-Ground REDD Project Experience (The Nature Conservancy / IISD)
Posted on July 24, 2010 by willem van cotthem
Read at : Forest Policy Info Mailing List
New Casebook of On-the-Ground REDD Project Experience
The Nature Conservancy, Conservation International and Wildlife Conservation Society are pleased to share with you a new publication entitled Reducing Emissions from Deforestation and Degradation (REDD): A Casebook of On-the-Ground Experience, which we hope you will find of interest. The full report is available electronically at: http://conserveonline.org/workspaces/redd/documents/redd-a-casebook-of-on-the-ground-experience
Today, there is widespread consensus that we cannot solve the climate change crisis without addressing deforestation. Yet, there are on-going attempts to cast doubt on whether forest carbon can be a credible part of the climate solution, and a debate is in full swing about the inclusion of forests in U.S. and international climate policy. Against this backdrop, we felt it was important to document and share our experience. To that end, we set out several months ago to painstakingly synthesize over a decade of history and thousands of pages of technical documents into the attached 70-page casebook on a selection of our REDD efforts.
For a combined 38 years, The Nature Conservancy, Conservation International and Wildlife Conservation Society have been leaders in piloting 17 on-the-ground REDD demonstration projects. Through these projects, we have helped pioneer and further the state of knowledge of forest carbon measurement, carbon accounting methodologies, conservation strategies, and community involvement approaches.
This casebook draws on four specific experiences in Bolivia, Madagascar, and Indonesia. The report examines the principal aspects of demonstrating REDD credibility (e.g., baselines and additionality, measuring and monitoring, leakage, impermanence, etc.). For each issue, a project is examined in depth, describing how the challenges were dealt with and lessons learned for the future. The bottom line is simple: These projects demonstrate that REDD can produce credible carbon benefits, often with positive effects on local people and biodiversity.
As the discussions continue about whether and how to structure climate policy and financial investments to address emissions from forests, there is much to learn from on-the-ground activities. We hope that you find our experiences both interesting and informative.

Australia Forest Industries Climate Change Research Fund

Forest Industries Climate Change Research Fund
– July 26, 2010

1. Overview
The Australian Government is committed to ensuring Australia meets its responsibilities in facing the global challenge of climate change.
Climate change has significant implications for Australia’s forests and forest industries. The Australian Government, as part of its 2007 election commitments, has provided $8 million in government grants over three financial years from 2008–09 to 2010–11 to address major knowledge gaps about the impacts of climate change on forestry and forest industries. The forest industries ministerial advisory committee, the Forest and Wood Products Council, has assisted in identifying priorities for investment.
As part of this commitment, the Australian Government will provide $5 million in government grants through the Forest Industries Climate Change Research Fund, which will commence in 2009-10 and cease on 30 June 2011.
These guidelines provide details on the Forest Industries Climate Change Research Fund program, which is to be administered by the Australian Government Department of Agriculture, Fisheries and Forestry (the department).
2. Purpose and aim of the program
The Forest Industries Climate Change Research Fund will provide $5 million in government grants in one round of funding to address major knowledge gaps about the impact of climate change on forestry and forest industries in Australia.
Through research, this government grant program will assist the industry to better understand the implications of climate change and build industry capacity to adapt to predicted scenarios and capitalise on emerging mitigation opportunities.
Addressing knowledge gaps will assist commercial forest planners and managers to better manage their forest assets in a changing environment. Generating information and developing tools and expertise will assist sustainability benefits to flow through the value chain and contribute to growth and development in forestry dependent communities.
Projects funded through this program aim to achieve the following outcomes:
Forest industry stakeholders are better able to adapt to changed climatic conditions through the availability of new technologies and techniques which encourage different practices
Forest industry stakeholders are better equipped with the knowledge, tools and strategies to manage their emissions, including a greater ability to participate in the Carbon Pollution Reduction Scheme
Forest industry stakeholders and forestry dependant communities better understand the range of climate change impacts and the future implications for their enterprise and region.
Collaborative research projects involving industry, scientific and government organisations are supported. This will ensure that relevant expertise and experience is brought together so that commercial realities are taken into account in achieving outcomes and improve the transition from applied research to demonstration and implementation of commercial applications.
3. Delivery of the program
This program is a competitive government grants program. Expressions of Interest (EOIs) from research providers will be assessed on a competitive basis by an independent assessment panel including relevant experts from the industry, scientific and government sectors.
In assessing EOIs, the panel will draw upon work completed to date to ensure that projects sufficiently advance the forest industries’ understanding of the implications of climate change, the ability to adapt to predicted climate scenarios, to manage emissions, and capitalise on emerging mitigation opportunities.
Based on the assessment by the independent panel, proponents of highly ranked EOIs will be invited to prepare full project proposals. The department will negotiate these project proposals with the proponents. Finalised research project proposals will also be sent to the Rural Research and Development Council for consideration. The Minister for Agriculture, Fisheries and Forestry will be responsible for the final approval of projects under this program.
Larger scale collaborative projects with cross sectoral applications, and which combine the efforts of a number of eligible parties in consortia, are strongly encouraged.
Government grants from this program will generally be up to $500,000. Higher grants may be considered in special circumstances where collaborative and integrated projects seek outcomes that will apply across the whole industry. Some very specific projects in priority areas will not require the full available allocation. The funding will be provided on the basis of cash and in-kind co-contributions by proponents. Funding from other Australian or state/territory government sources, research institutions and industry partners will be accepted as an applicant’s contribution to a project.
Government grants under this program will complement not duplicate, other research initiatives.
Government grants will be paid when an applicant completes each milestone specified in a negotiated Funding Deed. The program will end on 30 June 2011. Approved projects must be delivered by 30 May 2011, in order to ensure final funding is paid before 30 June 2011.
4. Who is eligible?
To be eligible to apply for government grant funding, you must satisfy the following criteria:
1. Your organisation must be able to provide, upon request, professionally prepared financial statements demonstrating your ability to fund your share of project costs
2. The proposed project must primarily involve new work
3. The proposed work must be completed and reported by 30 May 2011
4. Your EOI must address the assessment criteria
5. The proposed work must not duplicate other research activity
6. EOI proponents must be an Australian registered company or research agency, for example:
Peak national or state forestry organisations
Australian, state or territory government agency
Australian tertiary education institution
Australian Cooperative Research Centre
Australian registered business or registered industry group
Australian public sector research agency
Australian private, not for profit, research organisation.
5. What activities are eligible for funding?
Project proposals need to address major knowledge gaps about the impact of climate change on forestry, forest industries and forestry dependent communities in Australia, while providing skills, knowledge or strategies to help industry address these issues and respond to the challenges and opportunities arising from climate change.
Priority areas for addressing knowledge gaps for the industry include, but are not limited to:
Adaptation
Further research, which will allow all commercial forest sectors, forest planners and managers, and forestry dependent communities, to better adapt to climate change is a priority. The fund will support research in the following area:
Development of diagnostic tools and techniques to determine when (and what) specific management intervention is required to respond to the threats and opportunities of climate change. This will include but will not be limited to determining interactions between; increasing atmospheric carbon dioxide concentrations, changed rainfall regimes, water availability, fire risk, incidence and severity of pests and disease outbreaks; and forest enterprises, to inform the development of management systems and intervention options
Develop methods to identify critical infrastructure necessary for the industry where viability is at risk from climate change
Develop, provide and facilitate farm forestry and other regional-scale tree planting and sustainable forest management options, which can be used in the business models of forestry, agricultural and other land use sectors as a means of adaptation.
Mitigation
As a sequesterer of carbon, the forestry sector has opportunities to make contributions to the national climate change mitigation effort. Projects on mitigation techniques and technologies which attempt to integrate economic and social analysis are strongly encouraged as it would assist in informing the development of commercial applications.
Mitigation priorities include:
Expanding and strengthening the dataset underpinning the fate of carbon in harvested wood products during use and after disposal; and demonstrating how net emissions from harvested wood products could be recognised within international carbon trading protocols
Research and demonstration projects that identify and investigate opportunities to reduce emissions and improve carbon sequestration potential in the industry, and determining the social and economic implications of these opportunities
Develop measures to identify and address critical bottlenecks to greater use of recycled wood and paper products
Bioenergy
Bioenergy currently contributes just 0.5% to Australia’s total electricity supply, with energy generation from wood related waste and residues occurring on a very small scale. The Australian biofuels industry is also small, supplying less than 0.5% of Australia’s transport fuel. Research projects may be considered that promote the development and deployment of sustainable bioenergy generation based on forest industries resources on a commercial scale. Projects that identify required resources to realise the opportunities presented by bioenergy may also be considered.
Inventory and data
A basic level of information about the forestry and forest products industry is required urgently to establish a benchmark against which the results of strategies addressing the challenges and opportunities faced by the industry from climate change may be assessed in the future. A stocktake of existing relevant data sets and a gaps analysis of existing baseline data have been undertaken. The Data Gaps Overview is available from the Secretariat by request. A priority is to fill the data gaps so that quantitative analyses on climate change responses can be undertaken in the future.
Projects demonstrating the results and integration of applied research will be considered. The assessment panel will seek to balance the level of investment across priority areas.
6. What activities are not eligible for funding?
Government grant funding will not be provided for:
Projects that look at non production forests
Capital expenditure for the purchase of assets such as office furniture and equipment, motor vehicles, computers, printers, photocopiers, construction, renovations and utilities
Any cost incurred prior to the commencement date of a Funding Deed with the Commonwealth
Staff relocations costs
Administration/overhead and infrastructure costs
Travel and living expenses
Hospitality/catering costs
Costs involved in the purchase/upgrade of software including licences
Costs associated with the protection or patenting of intellectual property
Feasibility projects/studies
Costs associated with market research for products or research carried out by surveys to assess the size of the market and/or the price of a particular service or product
Costs associated with activities of a distinctly commercial or proprietary nature that are aimed at selling or attracting investment
Costs associated with product development and the building or production of commercial prototypes
Marketing campaigns
Projects funded solely by other Australian Government programs.
Expressions of interest close on 20 August 2009

Property Rights in relations to CPRS Bill-Australia

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By John Sheehan
27 July 2010 – The Australian Property Institute has called for a major review of property rights ahead of a carbon price and trading of carbon credits.
According to NSW API carbon spokesman John Sheehan, the carbon pollution reduction scheme, which the Labor Government has put on hold, contained a vital flaw, quite apart from any political issues: it fails to provide secure property rights to allow trading in carbon credits. He called on the states to enter a dialogue to create harmonious legislation to deal with the issue ahead of a carbon trading scheme.
Following is the text of a paper that Mr Sheehan, deputy director of the Pacific Centre for Complex Real Property Rights, presented to the Australian Property Institute Victorian Division Annual Conference last year. Mr. Sheehan calls for debate on whether emissions trading schemes like the CPRS or carbon tax schemes can offer a better pathway to decarbonisation for Australia.

Carbon and Rural Property
Introduction
In December 2007, the Australian Government ratified the Kyoto Protocol, and as a result the necessary national response to the obligations of the Protocol emerged in the form of the Exposure Draft of the Carbon Pollution Reduction Scheme (CPRS) legislation. The CPRS proposes an emissions trading scheme utilising a “cap – and – trade” system where the cap is slowly reduced on the quantum of green house gas (GHG) emissions permitted annually expressed as equivalent carbon dioxide emissions.
Such a system involves the creation of Australian Emission Units (AEUs) which will be issued by the proposed Australian Climate Change Regulatory Authority to industry equaling the annual permitted cap on carbon dioxide emissions. Some industries may have more AEUs than required and will trade those permits to other industries that do not have an adequate number of AEUs. This is the fundamental nature of the carbon permit trading market that is proposed in the CPRS.
The following section of this paper examines the relevant components of the CPRS, and the emerging fragile relationship with land property rights.
CPRS and Property
The proposed CPRS legislation was first released by the Department of Climate Change as an Exposure Draft on 10 March 2009 by Senator the Hon Penny Wong, Minister for Climate Change and Water, in response to Australia’s anticipated carbon dioxide equivalent emissions over the period 2012 – 2020. In this period the Department of Climate Change suggests that emissions in 2012 will be at an average of 108 per cent of 1990 levels and rising in 2020 to 120 per cent[1]. The Department states that for Australia to meet its Kyoto Protocol target of limiting emissions, a “comprehensive response to climate change”[2] is needed and that Australia:
…is well placed to provide the necessary financial services to support developing carbon markets in the Asia-Pacific region.[3]

Increasing Australian levels of GHG since 1995 reveal there is “considerable momentum in national emissions”[4] and unsurprisingly CPRS is the critical tool for the Government necessarily to manage “the transformation to a low-carbon economy”[5]. Arguably, the proposed AEUs and the associated trading scheme create a form of “new property”[6] given established notions of property are of little relevance in the current carbon constrained environment. According to Boydell et al, AEUs as “new property” are a form of right hitherto unknown in Australian property law, allowing:
…the commodification of the “right” to pollute the environment. Conceiving this right accurately could have implications on the future institutional arrangements of governments.[7]

Confounding this collision between climate change and property law, the CPRS Bill adopts at Section 240 a definition of carbon sequestration right for Torrens system land which states inter alia:
…the person has the exclusive legal right to obtain the benefit (whether present or future) of sequestration of carbon dioxide by trees to which the [reforestation] project relates…[8]

Further, the above proposed definition is expanded by the following:
…in determining whether a person has the exclusive legal right to obtain the benefit (whether present or future) of sequestration of carbon dioxide by trees to which a reforestation project relates, it is immaterial whether that right extends to sequestration of carbon dioxide by the soil in which the trees are growing.[9]

This breathtaking definition of carbon sequestration right conveniently ignores the historic legal nexus between the ownership of the elemental land property right and all things in or on that land, such as the living fibre of vegetation (trees). The definition does not explain how the right to carbon in the living fibre will be crystallised out of the land property right. A number of States have adopted profit a prendre[10] as a basis for the right to carbon, however this action offends the common law notion of land property, and is fundamentally flawed.

Underpinning the definition of carbon sequestration right is the notion of a forest stand which is defined as a stand of forest where:
(a) under the regulations, the stand is taken to have been established by means of direct, human-induced methods; and
(b) the stand occupies an area of land of 0.2 hectares or more; and
(c) the stand consists of trees that:
(i) have attained, or have the potential to attain, a crown cover of at least 20 per cent of the area occupied by the stand; and
(ii) have reached, or have the potential to reach, a height of at least 2 metres; and
(d) on 31 December 1989, the area occupied by the stand was clear of trees that:
(i) had attained, or had the potential to attain, a crown cover of at least 20 per cent of the area occupied by the stand;
(ii) had reached, or had the potential to reach, a height of at least 2 metres; and
(e) the stand meets such other requirements (if any) as are specified in the regulations.[11]

However, this definition of forest stand was expanded by the Commentary to the Exposure Draft which states at paragraph 6.30 that:
It is envisaged that the regulations will specify requirements going to the calculation and reporting of net greenhouse gas removals, including that the trees comprising a forest stand be established at the same time within a single encompassing boundary (and excluding all non forest stand areas) and are of the same (set of) species and are subject to the same management regime.[12]

Given biologically diverse stands of vegetation may arguably have a greater capacity for carbon sequestration than a mono species stand, the requirement that a forest stand should contain the same species is somewhat curious. Clearly, further detailed scientific investigation is required before a mono species regime is adopted, to ensure that greater harm is not actioned upon the natural environment.

The CPRS Bill in the outline to Part 10 states at Section 190 that the number of free AEUs will be determined by the “net total number of tonnes of greenhouse gases”[13]
which are removed by each reforestation project subject to the unit limit determined by the Australian Climate Change Regulatory Authority. Of concern, the International Accounting Standards Board (IASB) had already withdrawn in March 2005 its accounting standard for the attribution of forest-derived GHGs which utilised sequestration levels of 40 per cent, 60 per cent and 8 per cent% net tradeable carbon respectively in the three forest classifications[14].

The IASB withdrew the accounting standard reportedly:
…as a result of pressure from the European Union and other international bodies, expressing concern that the document was unworkable.[15]

Clearly, the approach adopted at Section 190 is problematic given continuing absence of scientific clarity.

At Section 195(2) the bill requires that the issue of a certificate of reforestation only be issued if the applicant holds “the carbon sequestration right in relation to the project”[16]. The unclear nature of the right to carbon in vegetation crystallised out of the elemental land property right denies the authority the capacity to ascertain that the right to carbon is held as asserted by any applicant. The capacity of the authority to satisfy itself as to the fundamental nature of the right to carbon asserted by any applicant, will be severely limited by the resources of the authority. Sequestration through reforestation throughout the Australian continent requires a level of accuracy in mapping of vegetation, species identification and biomass assessment which is currently not possible.

Further, at Section 240(1)(e) it is proposed in the bill that a carbon sequestration right in Torrens system land will be held by:
…the person [who] has the exclusive legal right to obtain the benefit (whether present or future) of sequestration of carbon dioxide by trees to which the project relates…[17]

The common law concept of land property has not been approached correctly in this Section which purports to identify an exclusive legal right to the benefit of sequestration. Legislation in the Australian states variously attempt to distil such a right out of the elemental land property right, however, as previously mentioned the general basis used is profit a prendre which is neither exclusive nor correct in application for this purpose.[18]

The use of the terminology “exclusive” in Section 240(1)(e) highlights the poorly understood nature of the carbon sequestration right in vegetation, which currently lies firmly with the landowner. This area of Part 10 is significantly flawed, further confounded by the disparity between the states in adopting either a profit a prendre or a statutory carbon right in land.[19]
Hepburn points out that by the adoption of disparate concepts of carbon rights rather than a clear universal statutory interest, Australia has moved to a complicated position which now:
…depends heavily upon a rigorous regulatory framework.[20]

Adding further complexity to this situation, the CPRS bill states at Section 240(8):
For the purposes of this section, in determining whether a person has the exclusive legal right to obtain the benefit (whether present or future) of sequestration of carbon dioxide by trees to which a reforestation project relates, it is immaterial whether that right extends to sequestration of carbon dioxide by the soil in which the trees are growing.[21]

This area of the bill purports to include sequestration rights of carbon dioxide in the soil in which the trees are growing. This section is poorly drafted, and demonstrates an appalling misunderstanding of common law concepts of land property. It is inconceivable under current Anglo-Australian property law that carbon in soil could be separated from the elemental land property right. The prospect of separate carbon property rights in soil was examined and discounted by Sheehan and Kanas in 2008 who concluded that:
…the huge potential carbon sink in Australian soil cannot as yet be assured scientifically, Indeed whether this pathway is a sustainable solution for carbon sequestration and trading in the future is at best problematic. Although the effects of carbon in soil is well reported in the scientific literature, paradoxically an understanding of carbon sequestration continues to develop albeit much more slowly than emerging property theory and law.[22]

The somewhat cavalier approach adopted in the bill to the obvious difficulties in conceiving nationally consistent land based carbon property rights perhaps reflects the support for soil carbon storage in particular by both major political parties given pressure from Australian farm groups, who reportedly:
…have begun lobbying the Government for support to offset their emission costs, such as carbon sequestration in soil or trees.[23]

On 3 March 2009 Tony Burke, Commonwealth Minister for Agriculture announced $32M funding for around 20 research projects to explore the capacity of national soils to “emit and capture greenhouse gases” reportedly:
…to help build the knowledge to support Australia’s bid to change global greenhouse accounting rules on soil carbon storage.

Soils can add or subtract from the nation’s greenhouse account depending on their composition and management, but their role is yet to be acknowledged in international negotiations.[24]

The following section of this paper canvasses the policy implications of adopting a cap and trade emissions trading scheme as proposed in the CPRS Bill, rather than the alternative of a carbon tax regime, which may be less complex and expensive.CPRS v Carbon Taxation?
Given that Australia is now internationally obligated to reduce national GHG emissions the manner of decarbonisation is of crucial importance. An alternative way of reducing GHG emissions is a carbon tax whereby a tax of per tonne of carbon is imposed on industries emitting carbon dioxide. The principle is that the cost of producing goods and services which are emissions intensive increases due to the carbon tax, and hence the consumption of those particular goods and services is reduced as they become more expensive. Arguably, a carbon tax encourages industries to produce goods and services which are less emissions intensive through alternative pathways. The alteration of manufacturing behaviour is one pathway which avoids raising the price of goods and services significantly.

A carbon tax would arguably continue to increase until evidence existed that a reduction in emissions was occurring and indeed had fallen to the desired level. Economists such as Gittins note that a carbon tax:
…is intended to discourage the consumption of [emissions intensive] goods and services, while also providing producers with an incentive to find ways of reducing the amount of emissions generated by their production process.[25]

Arguably, the sophistication of emissions trading schemes are more difficult to monitor and administer than a carbon tax system, which involves the imposition of a specific tax rate for a specific purpose. Michael Costa, former NSW Treasurer argues that the proposed CPRS is too complicated in a country which currently has “one of the most complex personal tax regimes in the world, and now another rebate scheme has been added”.[26]

The bankruptcy of Lehman Brothers highlights the already speculative nature of carbon emission trading, that company previously seeking to enter the carbon market in the:
…hope to dominate…centred on the buying and selling of carbon permits, through the EU’s[27] Emissions Trading Scheme (ETS) set up in 2005, the UN’s Clean Development Mechanism (DM) and the “cap and trade” system proposed for the US by both McCain and Obama.[28]

The interest that Lehman Brothers had in carbon emission trading centres on the concept that the number of permits[29] available will fall each year resulting in an increasing shortfall in emission capacity. This reduction in permits can only be addressed in two ways, either through active reduction in carbon emissions or through the purchase of further permits, presumably at increasing cost. This aspect was not missed by Lehman Brothers:
..[b]ecause the [carbon] titles are transferable and because large numbers were allocated to large corporations when the licenses were first introduced [by the EU and UN], there arose a market in carbon trading. Powerful businesses were able to sell their CO2 permits to smaller companies that needed to emit a certain amount of CO2.[30]

In addition, China one of the world’s largest GHG emitters is in the bizarre position of reportedly being a net “carbon creditor” because it has constructed huge dams for hydroelectric power which according to the International Energy Agency generated from that source 397017 gigawatt hours (GWh) in 2005[31]. Hence, China will be capable of selling offset credits in the future to the EU in particular. This potential to sell carbon credits occurs against a backdrop where China constructs one additional coal based electricity power station every four days.[32]
Mark O’Neill, the executive director of the Australian Coal Association observed in 2006 that the annual Australian energy output at approximately 30,000 megawatts was equalled by the combined output of those Chinese coal fired power stations constructed every nine months.[33]
All of the above demonstrates that any reduction in carbon emissions on a global scale will be difficult to achieve, although there is increasing evidence that some countries such as Australia are taking their obligations under the Kyoto Protocol seriously. The earlier CPRS Green Paper highlighted the evolution that is occurring in international accounting rules, indicating that:
[t]here is a general movement towards a more comprehensive and scientifically accurate international accounting framework, however, as negotiations are at a very early stage, the direction of any changes cannot be predicted.[34]

The issue of accuracy has also been highlighted by the Australian Competition and Consumer Commission in its findings arising from investigations into claims being made about carbon offsets. There are strict obligations under the Trade Practices Act 1974 (Cth.) prohibiting misleading and deceptive conduct together with a series of prohibitions against specific misrepresentations. Importantly the Commission published an Issues Paper in January 2008[35] seeking comments on claims about carbon offsets and whether such claims when assessed against the requirements of the Commonwealth trade practices legislation could involve breaches.

In June 2008 the Commission released subsequent guidelines on carbon claims observing that:
[t]he development of a credible and transparent carbon offset market and straightforward carbon offset marketing will assist Australia to reach its climate change goals. However, false or deceptive claims damage consumer perception of carbon offsetting, thereby damaging the emerging industry.[36]

The following section of this paper canvasses the costs associated with decarbonisation irrespective of the regime chosen.

The cost of decarbonisation
Much debate has occurred since the release in March 2009 of the CPRS Bill focused particularly on the cost to carbon emitters of the introduction of an emissions trading scheme. Issues of cost are obviously of great interest not only to Australian emitters, but also elsewhere. It is reported that the current wholesale cost of UK electricity is around GBP32 billion, and it is calculated that every ton of carbon dioxide emitted in electricity production will cost GBP35, with UK electricity suppliers paying an additional GBP8 billion for carbon permits. This is calculated to add 25 per cent to the total annual cost of electricity in that country.[37]

The UK government recently detailed its plans to reduce carbon emissions by 34 per cent from 1990 levels by 2020. It is also proposed to increase the amount of electricity generated from renewable sources whereby in 2020 it is estimated 40 per cent will be obtained from wind and tidal energy as well as continuing nuclear power generation and “clean coal” generation.[38]

The EU Environment Committee has decided approval of new rules will be sought from the European Parliament and the EU member states requiring coal power electricity generators to meet the cost of “all their carbon dioxide emissions from 2013”.[39] The Committee also decided on 7 October 2008 that all large power stations constructed from 2015 are to be equipped with carbon capture and storage technology (CCS), rather than release carbon dioxide into the atmosphere.[40]

However, in British Columbia Canada, concerns have been expressed over the cost of decarbonisation, following the introduction on 1 July 2008 of an alternative approach to the CPRS, namely a carbon tax scheme. The current Provincial Budget published on 17 February 2009 lists a carbon tax collection of CAD300million for the 2008-2009 fiscal year. For the fiscal year 2009-2010 the carbon tax has been estimated in the Budget at approximately CAD546 million rising to CAD754 million in 2010-1011 and CAD968 million in 2011-2012.[41]
When the tax was introduced in 2008 the base was CAD10 per tonne of carbon dioxide, increasing to CAD15 on 1 July 2009 and in successive similar amounts annually until reaching CAD30 per tonne in 2012. The tax collected is returned under the scheme to individuals and industry in the form of reductions in personal and corporate income tax, together with low income tax credits.[42] It has been estimated that the projected increases in the carbon tax in 2009-2010 will add CAD0.0117 (1.17cents) to the cost of a litre of petrol and CAD0.0135 (1.35cents) to the cost of heating oil or diesel.[43]

Whether this Canadian carbon tax is actually encouraging decarbonisation is yet to be determined, however British Columbia also has a “cap –and – trade” system which was introduced on 3 April 2008.[44] However, whilst offsets gained by reforestation have a potential to be used by carbon intensive industries, the Canadian government when signing the Kyoto Protocol declared that it was the owner of all “forest carbon sinks”, an issue which has created concern amongst First Nations[45] and the Provincial Government of British Columbia.[46]
Given the above discussion concerning the likely cost of the CPRS and the alternative carbon tax regime, the final section of this paper briefly canvasses the reality of decarbonisation in Australia.

Closing Comments
It is surprising that there has been so little debate on whether emissions trading or carbon tax regimes offer better pathways to decarbonisation for Australia. Emissions trading schemes such as the proposed CPRS actually operate in a somewhat similar manner to carbon tax schemes, through limiting annual allowable emissions hence increasing the cost of goods and services which are emissions intensive. The difference between the two methods is that the quantity of permitted emissions is controlled by the cap, while a carbon tax determines the price of emissions, with the market place deciding on the quantum of emissions that are economically possible.
However the global financial crisis has resulted in the overall price of carbon traded to drop significantly. In the first few weeks of October 2008, the price of carbon traded dropped from USD30 per tonne to below USD22 per tonne. Given that the price in July 2008 had been as high as USD37 per tonne, the necessary market stability for a carbon tax scheme is now problematic.[47]

Similarly the CPRS relies on an increasing scarcity factor for AEUs, and hence their tradable value is of critical importance for the success of the scheme. The worrying collapse in the worth of carbon tonnes and the resultant impact upon international emissions trading is however not unexpected, with Martijn Wilder, Chair of the Sydney Carbon Market Taskforce observing in December 2008 that:…[a] good emissions trading scheme needs broad coverage and a carbon price sufficient to drive change…[48]

The prospects for success of the CPRS are yet to be determined, especially given that emissions trading and carbon taxation are blunt tools attempting to offset economic activity (GHG emitting) against environmental protection (decarbonisation). Perhaps, on balance emissions trading schemes such as the CPRS appear preferable as they are more in harmony with international trends, Gittins recently observing that:
One good reason for preferring a trading scheme is that it fits better with what other countries are doing and allows international trading in permits. Where other countries can reduce their emissions more cheaply than we can, we effectively pay them to do it for us.[49]

Whilst the CPRS Bill has not passed the Senate, when the Bill is resubmitted in November, if passed in its current form it will not become operative until 2011.
Irrespective, when the Conference of Parties meets in Copenhagen on 1-12 December 2009, the likelihood of a global agreement to reduce emissions for the period 2012-2020 will commit Australia to further its obligations to decarbonisation, which emerged with the ratification in December 2007 of the Kyoto Protocol. Indeed, there have been suggestions an “international carbon-trading regime” should be established with the World Bank acting as the broker for “carbon rights” to be traded between the developing and the developed economies.[50]

Statutes
Carbon Pollution Reduction Scheme Bill 2009 (Cth.) Exposure Draft.Carbon Pollution Reduction Scheme Bill 2009 (Cth.)Carbon Rights Act 2003 (WA).Greenhouse Gas Reduction Targets Act, 2008 (BC).Kyoto ProtocolTrade Practices Act 1974 (Cth.)
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Australian Competition and Consumer Commission (2008) Carbon claims and the Trade Practices Act, (Canberra) (June).
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Boydell, S., Sheehan, J., Prior, J., & Hendy, S., (2009) “Carbon Property Rights, Cities and Climate Change”, in J.-J. Helluin (ed.) Proceedings of 5th Urban Research Symposium – Cities and Climate Change: Responding to an Urgent Agenda. (Marseilles, France: World Bank).
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European Parliament Press Release 20081006IPR38802 (2008) “Equipping power plants to store CO2 underground”, (7 October).
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Gelonesi, Antonio (2007) Carbon Accounting Standard for Planted Forests. Paper prepared for the World Business Council for Sustainable Development, (26 February).
Hepburn, Samantha (2008) “Carbon Rights as New Property: Towards a Uniform Framework”. Paper presented to Australian National University (ANU) College of Law Seminar, (21 August).
International Energy Agency (2008) Electricity/Heat in China, People’s Republic of in 2005, IEA Statistics (Paris), http://www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=CN, (20 October).
Sheehan J. & Kanas, O., (2008) “Carbon Property Rights in Soil”. Paper presented to the 14th Annual PRRES Conference, Hotel Istana, Kuala Lumpur Malaysia, (22 January).
The Age (2009) “Britain outlines major carbon cuts”, (17 July), 11.
The Australian (2008) “EU law makes power firms pay for all emissions”, (9 October) 8.
The Australian (2009) “$32m for research on carbon storage in soil”, (3 March), 4.
The Australian (2009) “Green-industrial complex gets rich from carbon laws”, (3 July), 12.
The Australian Financial Review (2007) “Accounting for carbon credits is still a grey area (26 September) Special Report Sustainable Investments, 8.
The Globe and Mail (2009) “Long-term returns, B.C.’s carbon tax and ABCP”, Report on Business, (19 February), B5.
The Sunday Telegraph (UK) (2008) “Lehman misses out on carbon credit scam”, (21 September), 28.
The Sunday Telegraph (2009) “Inconvenient truth of carbon policy”, (8 March), 42, 95.
The Sydney Morning Herald (2006) “The green backers”, (8 April) Good Weekend, 34.
The Sydney Morning Herald (2008) “Balancing act on the carbon tightrope”, (13-14 December), 22.
The Sydney Morning Herald (2009) “Economists fiddle while climate burns”, (14-15 March), 5.
[1] Department of Climate Change (2009), Exposure Draft of the Carbon Pollution Reduction Scheme Bill 2009: Commentary, (Canberra), 8.[2] Department of Climate Change, 8.[3] Department of Climate Change, 8.[4] Department of Climate Change, 8.[5] Department of Climate Change, 8.[6] Boydell, S., Sheehan, J., Prior, J., & Hendy, S., (2009) “Carbon Property Rights, Cities and Climate Change”, in J.-J. Helluin (ed.) Proceedings of 5th Urban Research Symposium – Cities and Climate Change: Responding to an Urgent Agenda (16)( Marseilles, France: World Bank), 9.[7] Boydell, 9.[8] Part 10 Division 14 Section 240 (1)(e) Carbon Pollution Reduction Scheme Bill, 2009.[9] Part 10 Division 14 Section 240 (8) Carbon Pollution Reduction Scheme Bill, 2009.[10] A right to go on another’s land and take produce from it, as by logging, mining, drilling, grazing animals, etc.[11] Part 1 Section 5 ‘Forest Stand’, Carbon Pollution Reduction Scheme Bill, 2009.[12] Department of Climate Change (2009) Exposure Draft of the Carbon Pollution Reduction Scheme Bill 2009: Commentary, (Canberra) 168.[13] Part 10 Division 1 Section 190 Carbon Pollution Reduction Scheme Bill, 2009.[14] Gelonesi, Antonio (2007) Carbon Accounting Standard for Planted Forests. Paper prepared for the World Business Council for Sustainable Development (26 February).[15] The Australian Financial Review (2007) “Accounting for carbon credits is still a grey area (26 September) Special Report Sustainable Investments, 8.[16] Part 10 Division 3 Section 195(2)(b) Carbon Pollution Reduction Scheme Bill, 2009.[17] Part 10 Division 14 Section 240(1)(e) Carbon Pollution Reduction Scheme Bill, 2009.[18] In Western Australia the Carbon Rights Act 2003 (WA) created a new statutory land interest rather than adopt the pre-established common law notion of profit a prendre.[19] Ibid.[20] Hepburn, Samantha (2008) “Carbon Rights as New Property: Towards a Uniform Framework”. Paper presented to Australian National University (ANU) College of Law Seminar, 21 August, 7.[21] Part 10 Division 14 Section 240(8) Carbon Pollution Reduction Scheme Bill, 2009.[22] Sheehan J. & Kanas, O., (2008) “Carbon Property Rights in Soil”. Paper presented to the 14th Annual PRRES Conference, Hotel Istana, Kuala Lumpur Malaysia, 22 January, 17.[23] The Australian (2009) “$32m for research on carbon storage in soil”, (3 March), 4.[24] Ibid.[25] The Sydney Morning Herald (2009) “Economists fiddle while climate burns” (14-15 March) 5.[26] Michael Costa cited in The Sunday Telegraph (2009) “Inconvenient truth of carbon policy”, (8 March), 95.[27] European Union.[28] The Sunday Telegraph (UK) (2008) “Lehman misses out on carbon credit scam” (21 September), 28.[29] In Australia these are known as AEUs.[30] The Australian (2009) “Green-industrial complex gets rich from carbon laws”, (3 July), 12.[31] International Energy Agency (2008) Electricity/Heat in China, People’s Republic of in 2005, IEA Statistics (Paris), http://www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=CN, (20 October).[32] The Sunday Telegraph.[33] Mark O’Neill cited in The Sydney Morning Herald (2006) “The green backers”, (8 April) Good Weekend, 34.[34] Carbon Pollution Reduction Scheme Green Paper (2008) (Canberra: Department of Climate Change) July, 121.[35] Australian Competition and Consumer Commission (2008) Issues Paper: The Trade Practices Act and carbon offset claims (Canberra), 16 January.[36] Australian Competition and Consumer Commission (2008) Carbon claims and the Trade Practices Act (Canberra) (June), 2.[37] The Sunday Telegraph (UK) (2008) “Lehman misses out on carbon credit scam” (21 September), 28.[38] The Age (2009) “Britain outlines major carbon cuts”, (17 July), 11.[39] The Australian (2008) “EU law makes power firms pay for all emissions” (9 October), 8.[40] European Parliament Press Release 20081006IPR38802 (2008) “Equipping power plants to store carbon dioxide underground”, (7 October).[41] The Globe and Mail (2009) “Long-term returns, B.C.’s carbon tax and ABCP”, Report on Business (19 February), B5.[42] Ibid.[43] Ibid.[44] Greenhouse Gas Reduction Targets Act, 2008 (BC).[45] First Nations Forestry Council (2008) Carbon Credit Opportunities for First Nations in BC. Briefing document for BC Forestry Round Table (Vancouver), 4.[46] The Provincial Government owns over 90% of all forests in British Columbia – personal communication from Chris Rolfe, Chair Climate Action Legal Team, Ministry of Attorney General, (19 February 2009).[47] Bond, Patrick, (2009) “Climate Justice False Solutions: A timely death?” New Internationalist 419, (January/February), 14.[48] Wilder, Martijn cited in The Sydney Morning Herald (2008) “Balancing act on the carbon tightrope” (13-14 December), 22.[49] Gittins, Ross cited in The Sydney Morning Herald (2009) “Economists fiddle while climate burns” (14-15 March), 5.[50] The Australian (2009) “Green-industrial complex gets rich from carbon laws”, (3 July), 12.

John Sheehan is also Adjunct Professor, Faculty of Design Architecture and Building, University of Technology, Sydney, Chair, Carbon Property Rights Committee, chair, Government Liaison, past president NSW Division, Australian Property Institute, director, Spatial Industries Business Association, Australia

US forest strategy boomerangs in Brazil

Natalia Viana Update: Carbon Watch July 26, 2010
US forest strategy boomerangs in Brazil
A recent ad campaign aimed at gaining Midwestern senators support for US climate change legislation has backfired in Brazil. The ad by the National Farmers Union and Avoided Deforestation Partners, an alliance of major environmental organizations and utilities, advocates for farm state senators to support U.S. emission limits by offering an incentive: the ability of companies to purchase emission offsets in the form of standing tropical forests, which sequester the potent greenhouse gas carbon dioxide. Thus, the coalition argued, the land would not be cleared for the cultivation of soybeans and other crops that compete with US agriculture. A report accompanying the ad, called “Farms here, Forests there” claims that US farmers could gain up to $221 billion between 2012 and 2030 from less foreign competition.
The report states “the expansion of pasture and plantation to previously forested land in nations such as Brazil, Argentina, Indonesia and Malaysia has contributed to these countries becoming lead producers and exporters of these commodities."
“If the forests are conserved,” the report states, “the land will not be converted to pasture or plantation…. [and] we can expect to see reduced production from these [tropical forest] countries as a result of restricted land use and higher production costs.”
A video created by Avoided Deforestation Partners goes further: “Did you know that saving forests can save American consumers billons…Did you know that saving forests can protect American jobs?" The video concludes: “No new technology is necessary, no new systems need to be invented."
The advertising campaign aimed to win support from conservative legislators for the inclusion of rainforest protection in US domestic climate legislation. Here in Brazil, however, it went seriously wrong. The ad landed in the middle of a debate in the Brazilian Congress, which is considering a proposal by the government to loosen restrictions on the development of the Amazon.
A coalition of major Brazilian environmental NGOs repudiated the claim that protecting the world’s forests would benefit US agriculture. The coalition, including the Instituto Socioambiental, Conservation International-Brazil, WWF-Brasil, Fundação SOS Mata Atlântica and Greenpeace-Brazil, charged that the Avoided Deforestation Partners' argument "ignores the Brazilian reality." According to data compiled by the University of São Paulo, Brazil has at least 61 million hectares (roughly 150 million acres) of low-productivity land, which “can be quickly converted into areas of agricultural expansion” without intrusions into the nation’s forests. "We could double our production of food without having to bring down new forest and still recovering those areas where reforestation is done needed for their potential to provide ecosystem services," it said. The statement also denounced use of the report by deforestation advocates in Brazil to support their assertion that preservationists were playing into the hands of foreign agricultural interests.
US environmental groups that are members of Avoided Deforestation Partners—including The Nature Conservancy, Conservation International, The National Wildlife Federation and the Environmental Defense Fund—later distanced themselves from the report, saying it “is based on the assumption, totally unfounded, that deforestation in tropical countries can be easily interrupted, and its conclusions are therefore also unrealistic."
The groups also cited “several scientific studies [that] show that to reduce deforestation it is necessary to increase the competitiveness of agricultural production outside the forest frontier. Large tropical countries have large under-utilized rural areas where agriculture could be increased without increasing deforestation." The statement came out a month after the report was released, right when then the debate was heating up in Brazil.
Hurriedly, AD Partners responded with a new report that claimed Brazil would actually benefit from forests protection, estimating that its gross revenues from a policy designed to link forest protection to global strategies against climate change—known as REDD (Reduced Emissions from Degradation and Deforestation)—could amount to as much as $306 billion by 2030.
But the harm had already been done. The news about the report came out in Brazil right in the middle of a heated debate in the Brazilian Congress about the revision of the National Forests Code, which would weaken existing forest protections. At the end of June a congressman from Mato Grosso, a soy producing state, Jorge Yanai, cited the report to discredit Brazilian environmentalists, asserting that they were actually driven toward conservation by foreign interests seeking to restrict Brazilian development.
His proposals include, among other things, an amnesty on anyone guilty of illegal logging before July 2008 and permission for small properties not to keep what's known as the legal reserve—the amount of forest on a farm or settlement that must be protected.
The current law obliges all farms to preserve legal reserves in different percentages according to the region. In the Amazon, for instance, legal reserves must occupy 80 percent of the land; in the cerrado (a Brazilian type of savannah), the legal reserve is 35 percent of the land; and in forests elsewhere in the country, 20 percent. The word that small farms won’t have such an obligation has already reportedly led farmers to split their properties into smaller units. The proposed changes to the Forest Code also include a reduction in the width of land to be preserved alongside water courses—from 30 meters to 15.
In early July, the proposed weakening of the rules governing forest protections was passed by a key committee in the Lower House. The bill is expected to be voted on by both the Brazilian House and Senate in the fall—but not until after the presidential elections in October.
Before the revised report from Avoided Deforestation Partners was published, Glenn Hurowitz, the Director of the Tropical Forest and Climate Coalition, which participated in releasing the original ad campaign, told me that the study had been misinterpreted. “The report didn't analyze the impact on Brazil, and it's unfortunate that it has been interpreted that way."
Brazilian environmental NGOs claim, however, that the original report's intention was too clear to be misunderstood. They claim it was based not only on a false assumption, but also on two misunderstandings by the US lobby group.
AD Partners believed that to convince US farmers to preserve forests you have to say they will benefit economically at the expense of competitors. This generated a dichotomy that no environmental groups in Brazil would embrace.
The other mistake, they say, was to assume that nobody else outside the US would care. While within the US, environmental and news organizations generally praised the report’s conclusions, outside the US it was seen as an outrage. It’s something nobody at the US lobby group had thought about—that the report would have an impact on countries with tropical forests. Thus far, it seems to have had a negative impact on Brazilian’s own struggle to conserve its forests.
Natalia Viana is an independent journalist based in Sao Paulo, Brazil. She writes for The Guardian and The Independent (UK), as well as several Brazilian publications, and as a reporter for PBS Frontline. She recently published a three-part series on the debate over forest preservation and U.S. policy in Brazil on the Brazilian internet magazine Opera Mundi.
Tags: Brazil, carbon offsets, climate change