Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Hansard source

I thank the minister and the government for moving these amendments. Obviously, as the minister has explained, the detail of these amendments is a sensible change. The detail will ensure that a copy of declarations is only required to be given to land registration officials if the declaration relates to a sequestration offsets project rather than an emissions avoidance offset project. That is the common sense way this should operate and, accordingly, the opposition will support the government's amendments in this regard. However, I note that these amendments relate to the declaration of sequestration offset projects. The need to declare such offset projects stems from matters of the permanence of such projects and the need for future landowners or interested purchasers of land to understand the obligations that flow from that ongoing permanence.

As a result, I bring to the minister's attention recommendation 3 of the Senate inquiry into this matter. It looked at matters of permanence and urged the government to continue monitoring scientific research relevant to the issue of permanence and to adjust permanence obligations to the CFI to reflect international consensus on this matter. That was a government senator's amendment and the coalition feels strongly that the matter of permanence needs as much clarity as possible. We note those who made strong submissions to the inquiry that the 100-year provisions were too long and would discourage some potential proponents from participating in the scheme. Equally, there were some who did not believe the 100 years was long enough.

The CFTA appeared before the inquiry and described the provision as the 'deal killer'. I will read an extract of the evidence that is highlighted in the inquiry. Mr Michael Kiely, Chairman of the CFTA, stated:

No farmer would be silly enough to agree to 100 years for soil carbon or 100 years for anything. A finance lender would want to know seriously the impact on the value of the property of agreeing to such a thing. We did some research into the 100 years thing and discovered it was a policy decision, not a scientific measure ...We believe that 100 years is a perverse outcome. The result is said to be necessary so buyers can be confident they are getting value—that is, genuine abatement—so they get nothing. There is nothing available for them. We have found examples where the IPCC and the Verified Carbon Standard have allowed other periods of time recently—20, 25, 30-odd years. We believe we could work within that sort of time frame.

AUSVEG, in appearing at the committee and in submissions, were also critical of the 100-year provision, stating:

... it would take a very brave farmer to agree to 100 year permanent arrangements in which they (and their children and grandchildren) will be held accountable for "natural disturbances such as drought that may cause carbon to be released from the soil".

Equally, placing all risk and costs as the growers' responsibility for "bushfire ... drought, or actions by neighbours or third-parties" belies the Government's own commitments to meeting its Kyoto obligations.

Given these serious challenges and immense uncertainty of carbon markets, it is quite unrealistic to expect vegetable and potato growers to sign 100 years commitments (with the threat of civil and criminal prosecution), undertake major investments, and change generational farming practices without any firm guarantees on the price they will be paid.

Another of those submitters which highlighted difficulty is CO2 Group Ltd. Its Chief Executive Officer, Andrew Grant, indicated:

It is a problematic issue in that, from an invest­ment perspective, after the growth period you have a long maintenance obligation with no income off it. Whether that is 100 or 50 years is rather semantic post the growth period. So, for argument's sake, say you have a 50-year growth period. You then have a 50- year permanence obligation.

I highlighted these examples of evidence given to the committee to bring the minister's attention to the government recommendation about the need to monitor the research relevant to the issue of permanence and adjust permanence obligations in the CFI. I also seek, for the benefit and record of this debate, his response to what processes the government will put in place to honour that recommendation and ask how they are going to respond to the concerns that were highlighted through the Senate committee process and what they will do in this regard. Again, I emphasise these were issues raised by the government dominated Senate committee not raised by the opposition. It is important for the stakeholders in this regard to actually get from the government some detailed response on the record as to how these issues will be dealt with going forward.