Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

This actually has been the government’s position on the public record since December 2008. I refer you to chapter 6, page 56, of the white paper where, at item 6.10, we talk about a ‘risk of reversal buffer’. It says:

The risk of reversal buffer would create a reserve to help protect forest entities against the exposure posed by emissions from natural events such as fire, insect attack, storm or severe drought. The risk of reversal buffer would be in the form of a small deduction each time permits are issued.

We have not yet determined what that proportion will be.

A delay in applying the risk of reversal buffer would mean that the forest entity would receive the full allocation of permits—

I am sorry; I just want to check something. I am advised that there is a five-year delay from forest establishment for the application of that buffer.

A delay in applying the risk of reversal buffer would mean that the forest entity would receive the full allocation of permits during forest establishment when costs are greatest. In addition, during the early years of forest growth the amount of total carbon storage and therefore potential carbon that could be lost due to natural disturbance is relatively low.

In determining each entity’s risk of reversal buffer, the Scheme regulator would seek to take account of project-level risk factors, such as the number of permits issued, the location of the forest and the entity’s management record. Buffers could be amended over time to reflect changed circumstances.