Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

by leave—I move coalition amendments (1) and (2) listed on sheet 7120, revised, together:

(1)   Clause 27, page 43 (lines 6 to 9), omit paragraph (4)(j), substitute:

  (j)   the project does not involve the permanent clearing of native forest; and

[permanent clearing of native forest]

(2)   Clause 27, page 43 (lines 27 and 28), omit subclause (6).

[consequential—permanent clearing of native forest]

Firstly, Mr Deputy Speaker, let me add my congratulations formally in this place regarding your election to the role. I look forward to working with you. I am sure you will discharge your duties in a way that is befitting to the chamber.

I just want to make a couple of comments in relation to the amendments. This is quite an important issue and it is receiving a deal of misrepresentation in the Australian community at the moment. Disappointingly, it has been pushed very hard by some activists and particular interest groups. It relates to the capacity of Australia's sustain­ably managed native forests to store carbon over time. It is very important issue to discuss. I mentioned in my speech on the second reading debate that the government has effectively limited the capacity of this legislation to achieve what it could achieve, and this is another example. Ruling out the carbon sequestering capacity of our native forests that are sustainably managed over time severely limits the capacity to store carbon in our natural landscape.

Amendment (1) says 'does not involve the permanent clearing of native forest'. I understand that Senator Xenophon is sensitive to this issue. This is not about permanently clearing native forests for another purpose; this is about sustainably managing and regrowing our native forests over time. In fact, any credible forest scientist will tell you that you will sequester more carbon over time by sustainably harvesting the forests. We need to recognise the carbon stored in solid timber products that are manufactured from that timber, like the magnificent timber furniture that we see around us in the chamber. All of the timber furniture in the chamber is, in fact, a carbon sink. It stores carbon at about 0.8 of a tonne per cubic metre of timber. The sustainable management of our native forests over time provides an opportunity for sequestration and further take-up of carbon in our natural landscape. It is not just me saying that; the IPCC also says that. In fact, the UN Food and Agriculture Organisation and the United Nations Forum on Forests also say that. In the last week, 80-odd Australian forest scientists wrote to the government to say that there is a flaw in their Climate Commission report when it says that the sustainable management of Australia's forests can store more carbon over time.

These are eminently sensible amendments for the government to consider. They do not lock out our native forest industries. They actually dispel some of the myths that have been peddled against our native forest sector. I look forward to the government's response, because it is one of the elements that can assist this country to meet its targets. I am not sure whether the government are aware, but the projections are that some 40 to 50 per cent of the Australian plantation estate will not be replanted in coming years, which puts a significant hole in their carbon accounting. I do not know whether they have done the numbers on that yet—I would be interested to hear whether the minister has those figures—but some 40 to 50 per cent of the Australian plantation estate may not be replanted due to a range of circumstances, but here we have the opportunity to sustainably manage our native forest estate to take up more carbon. It is backed by the IPCC, the UN's Food and Agriculture Org­anisation, the UNFF and credible Australian forest scientists.

I would be very interested to hear the government's support. I am not talking about clearing forests for other use; I am talking about regrowing forests. We know that we do that very well in Australia. In fact, in Tasmania some of our regrowth forests that have been regrown from clear-fell and burn—in the words of Senator Bob Brown, they were 'destroyed forever'—are now being claimed as having high-conservation value. That is how well we do our forestry in Australia. We are recognised globally as managing our forests very well for the sustainable timber and the timber products that can come from them. I look forward to the government's support for these amendments.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

Unfortunately, I am not going to provide that support. These amendments would water down protection for native forests. They would allow projects that involve clearing of native forests, so the government does not support them. Interestingly enough, some of the comments go to what I would describe as 'business as usual' for the commercial forestry sector. This is not for that, and that is clear. You may be better off looking at the carbon price for commercial forestry on Sunday. Business as usual is not to be rewarded under this system. This system is for a couple of things, but ultimately it is about ensuring that we do have permanence. To make the area available, you have to have the additionality. Business as usual for commercial forestry practice does not meet that requirement. That is not to say that commercial forestry practices in Australia are not at world's best practice. They do not look to continue sustainability. For all of that, they should be congratulated. But, in this area of the carbon farming initiative, it is not about rewarding business-as-usual practices; it is about ensuring that we do look at what the CFI is about. The difficulty with the opposition amendments is that I am not sure they would achieve your purpose in any event. Notwithstanding that, I have made it plain that the government does not support the coalition amendments for all the matters that I just raised.

The process that we have outlined in the carbon farming initiative is about enabling the crediting of land sector greenhouse gas abatement. We have illustrated the schema, which are the steps involved in operating an offset project, through the positive list. They are the types of projects that we are recognising and pursuing. The commercial forestry practices would not fall within those.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to oppose these coalition amendments, which seek to have logging of native forests recognised as an offset under the carbon farming initiative. It is the complete opposite of the intent of this legislation. What we are seeking to do with this legislation is to provide incentives for people to maximise carbon in the landscape, not to be able to go and log and clear carbon from the landscape.

In fact, the Climate Commission's recent report The Critical Decade says that, if you want to maximise carbon in the landscape, the best thing you can do is protect your native forests, and it made that very clear. That is why this legislation is designed to maximise carbon in the landscape and to minimise the perverse outcomes of seeing business-as-usual forestry getting a double dip by claiming carbon credits for their business-as-usual activities. This is why the Greens opposed the carbon sink forests 100 per cent tax deduction. It is why we have heard the Nationals, as have the Greens, raving in this place about the possible perverse outcomes—

Senator Nash interjecting—

That is why, Senator Nash, I have gone to great lengths in this bill to make sure of a number of things. Managed investment schemes are excluded. That is something I argued very strongly for and we got them on the negative list. Plantation forestry is not allowed. I share the concern that Senator Nash has raised very often, and we have spoken on this together at various times, about not allowing plantation forests to march across the landscape and displace agricultural land. That is why there is this test in the legislation that is designed to prevent that happening. We got rid of the managed investment schemes. Now we are getting rid of the ability of the plantation sector or the native forest sector to try and get on the back of legislation that was designed to do the opposite of what they would seek to achieve.

I am very pleased that the legislation, as it stands, will not give credit for projects which involve the clearing of native forests or which use material obtained as a result of the clearing or harvesting of native forests. That is a critical component of the legislation for maximising carbon in the landscape. It gives opportunities to people for genuine environmental plantings and gives people the opportunity to benefit from those environmental plantings but does not allow managed investment schemes in the plantation sector to double dip or business-as-usual forestry to put up their hand for logging companies. It is a nonsense to suggest you should be given a credit for a project that involves destroying a carbon store.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Senator Colbeck made some reference to the IPCC in what he sees are the beneficial aspects of clearing native forests. I am more inclined to support the position of Senator Milne on this, given that I am concerned that there could be unintended consequences as a result of the amendment. But, in fairness to Senator Colbeck, I would like to hear from him about the matters he has raised in relation to the IPCC.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

Thank you to Senator Xenophon for his consideration. My reference to the IPCC and the FAO comes from a letter that I have been copied into from a considerable number of Australian forest scientists who have written to the government. I understand Senator Ludwig is a recipient of this letter, as is the Minister for Sustainability, Environment, Water, Population and Communities, and it has also been sent to the Climate Commission. I am pleased that Senator Milne referenced the Critical Decade report because the subject of the letter is to say that that report's approach to native forests is flawed. I will read a couple of paragraphs out of this letter that has been sent by these 87 forest scientists.

We, the undersigned forest scientists and practitioners, wish to draw your attention to what we regard as some serious flaws, omissions and lost opportunities in relation to the best approaches for using forests to reduce greenhouse gas emissions in the Climate Commission's latest report, "The Critical Decade".

We argue that there is significant potential for managed forests to contribute to a more sustainable future for our economy and society and to address climate change. However, we are deeply concerned that climate change policy will be based on assertions not supported by sound analysis or scientific evidence.

In recommending policy options, we urge you to:

This is 87 highly qualified, highly regarded forest scientists. It goes on:

I think we all understand that they have a carbon footprint, as I have explained here previously. Timber is in fact a carbon store, so all that lovely timber furniture that you might have at home is actually storing carbon for the life of that product. It continues:

This where the reference comes from, Senator Xenophon. I am happy to provide you a copy of that letter. It has been provided to me and obviously to members of the government. I think it actually demonstrates some of the myths that have been peddled in the current debate about forestry: that the best way to manage these forests is to just lock them up. It is certainly not true. I am disappointed that the government is not prepared to support our amendments because, if the government is genuinely serious about mitigating carbon—and it tells us that it is every day—here is one opportunity that sits there before it to do so. But the government obviously will make its choices.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I think it is worth while adding to this debate—not to prolong it—that there is a little bit of misinformation I think starting to seep in. Current inter­national accounting rules recognise neither the carbon stored in harvested wood products nor the carbon dioxide emissions generated by the disposal of these products. That means that, in terms of international account­ing standards for this, it is something that we can wish for but does not currently exist. To that end the government is actively seeking an international climate change outcome that includes a more complete and balanced approach to recognise the ongoing storage of carbon in wood products and create an incentive to produce longer-lived wood products. Accounting for emissions from forest products as and when they occur, I think we all agree, is quite complex. We do want to ensure that we then move to a low-carbon economy. I do not want that complexity to prevent that, but we do need at least be sure that the current international accounting rules do not allow that to be used. The government is consulting with industry. We are aware of the industry's view on the proposed changes to international rules with a view—and I would not put it any higher than that—to ensure that the CFI remains consistent with international rules. It is important that we do recognise that there is an international accounting body. We will continue to maintain consistency with that. Therefore, it does mean at this juncture that the argument has been progressed, and even if it had merit—I assume it does—the current rules do not allow it.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

(Tasmania—Deputy Leader of the Australian Greens) (12:26): I note with interest Senator Colbeck's letter. I have not seen that letter nor do I know who the eminent forest scientists are, but I do know who the scientists are on the Climate Commission and I am very well aware of the work of Professor Will Steffen, who is one of Australia's leading scientists in the field of terrestrial carbon, and I am aware of the work of the team at ANU, including Professor Brendan Mackey. I am certainly aware of their work. I do not have the quote with me now but I was referring to it in a question to the minister this week where they make it perfectly plain that the best thing you can do to reduce your greenhouse gas emissions, maintain resilience in the landscape et cetera is to protect your existing carbon stores.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

(South Australia) (12:27): Further to the minister's comments in relation to Senator Colbeck's amendments, is the minister saying that there could be a reconsideration of this if there is a change in the international accounting rules?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

(Queensland—Minister for Agriculture, Fisheries and Forestry, Manager of Government Business in the Senate and Minister Assisting the Attorney-General on Queensland Floods Recovery) (12:27): The short answer is yes. If the rules change then we will obviously take cognisance of those rules as they change.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

The question is that amendments (1) and (2) on sheet 7120 be agreed to.

Question negatived.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

(South Australia) (12:28): by leave—I move amendments (1) and (2) on sheet 7118:

(1)   Clause 41, page 60 (line 3), after "Act", insert "and subject to subsection (1A)".

[additionality test]

(2)   Clause 41, page 60 (after line 7), after subclause (1), insert:

(1A)   Notwithstanding subsection (1), if a project is determined by the Minister, on the advice of the Domestic Offsets Integrity Committee, to have a beneficial impact on:

  (a)   the availability of water; or

  (b)   land and resource access for agricultural production;

the project is deemed to pass the additionality test.

(1B)   A determination under subsection (1A) is a disallowable instrument for the purposes of the Legislative Instruments Act 2003.

[additionality test]

These amendments relate to the positive list. It states that projects based on advice by the Domestic Offsets Integrity Committee that have a beneficial impact on the availability of water or on agricultural production should be on the positive list. Projects which offset carbon which improve the availability of water and which aids Australia's food production should be supported. This amendment allows for that. That is why I am seeking the support of the Senate in relation to this. I think it is important that there be a positive encouragement of projects that assist food production or water security. I will be moving amendments in relation to the negative list which will make it clearer that if a project has a negative impact on food security or on water security those matters ought to be considered. But this is where a project is shown to have a beneficial effect on food production or on water security and those projects ought to be encouraged by getting a tick.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I say at the outset—and this would come as no surprise to Senator Xenophon—we do not support his amend­ment.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

No, nothing surprises me.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I did not think it would any longer. The difficulty with this amendment is that it would allow environmentally or socially beneficial projects to bypass the additionality test. The additionality test ensures that the carbon credits represent an extra tonne of carbon abatement and they can be used to offset emissions from an industrial sector. It underpins the credibility and value of carbon credits. Under the CFI, project proponents are required to consider natural resource management plans. Regional NRM plans provide a vehicle for communities to provide guidance on the type and location of carbon farming projects that will deliver maximum social and environmental benefits. Ultimately the market will determine what projects come forward. Those which have important co-benefits will naturally stack up better than those without.

The amendment seeks to assess if a project has a beneficial impact on the availability of water or land and resource access for agricultural production and if so the project is deemed to pass the additionality test. It simply sidelines the additionality test with those broad terms of the 'availability of water' and 'land and resource access for agricultural production'. It does not go to the actual substance of this legislation—that is, carbon abatement and stacking up projects to see which does it better. Ultimately it is the market, and not the legislation, that is designed to determine the projects that will stack up, rather than your legislation bypassing the additionality test.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

In response to the minister's answer regarding the additionality test, I note that the explanatory memorandum says that the additionality test is to ensure that credits are only issued for abatement that would not normally have occurred and therefore provides a genuine environmental benefit. Minister, isn't an increase in the abatement from an existing set of circumstances also of environmental benefit? Why would that not be genuine?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

Unless you give me something as an example, I cannot say we would not necessarily rule that out if it is additional. If it is business as usual it would not pass the additionality test. It is hard to talk about this unless we put forward a particular project or business, but the additionality test is about providing something additional. The short answer is it would not necessarily rule out what you are putting forward. If there is a follow-up question designed to catch me, we will wait for that.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I am not trying to catch you out, Minister; I am just trying to get a very clear understanding. An example would be use of fertiliser in paddocks. That is obviously common practice, not something that is going to be additional. You may well get an increase in your soil carbon, therefore increasing the abatement, from a practice that is not additional and yet there is an increase. Therefore I would have thought that would be seen to be genuine, but according to this apparently existing practices that increase the abatement are not a genuine environmental benefit.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

If you were to reduce the fertiliser use and demonstrate that it is not business as usual, but a reduction designed for carbon abatement, and it stacks up as a project then you would want to look at the offset methodology, the project and the abatement it would arguably reduce. That could fall within it. I do not want to pick winners during this process because it goes to the way the scheme is designed to operate—that is, develop the offset methodologies and if that includes a reduction in the use of fertiliser in a particular type of operation that stacks up, to use a broader term, then why not?

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I understand what you are saying, Minister, but I think we are still not getting to any sort of clarification. I take your point that we can reverse it and look at it as a reduction in fertiliser use, which is common practice amongst farmers. Reducing fertiliser occurs right across the breadth of the farming sector, so one would assume that is going to be common practice. Decreasing fertiliser is going to give us the environ­mental benefit of an increased abatement and yet it is not going to be considered for getting an ACCU because it is common practice.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I do not want to disagree with you, but I do. That is why it is important to do surveys if you say it is common practice to reduce fertiliser use within the industry; tell me that and they can develop offset methodologies. One way would be to do industry surveys of a particular product, a type of produce, and what fertiliser is being used—what type, what amount is being put on per hectare or per square metre—and demonstrate that, in addition to other time series data, there has been a net reduction for different reasons; so we have developed an offset methodology. So none of what you have said rules out the opportunity for reduction in fertiliser to be used, but you do have to demonstrate that it is not business as usual, even if business as usual means improved practices, but that it is part of an offset methodology that leads to a project that reduces the use and therefore you can demonstrate that you have reduced carbon pollution.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I just want to talk about the integrity of the scheme, because this issue goes to the integrity of whether or not the offset that is created is a genuine offset and additional to what would have occurred otherwise. The reason for that is that, when these offset credits are created, they will be sold in a voluntary market or a compliance market if they qualify for that, and they will offset a tonne of pollution that is coming from an industrial project, for example. So you have to be sure that, as you have that additional tonne of emissions going to atmosphere, you actually have this additional tonne in the landscape. Otherwise you are actually cheating the climate and cheating the atmosphere, because you are doing what you always do in the landscape sector while the emissions are going up there, so you do not actually have a genuine level of reduction—of additionality.

I totally agree that we need to be encouraging environmentally and socially beneficial projects—that is without doubt—but it has to be additional to business as usual. Of course there are going to be people who are doing the right thing now who think: 'If I'd been doing the wrong thing, I could actually change my practices and benefit. I'm actually a good land practitioner and I'm doing the right thing, and I won't benefit from this.' That is going to be the case, because the people doing the right thing will not be able to claim additionality. I totally agree that that is the position here. It is equally going to be the position, for example, for people who have protected native vegetation on their land and put a covenant on it because they wanted to; they thought it was the right thing to do. They will not be able to create a carbon permit for that, because it is not additional to what was already happening at the time. So that is one of the things that I have thought about a lot; I have thought about how you can address that in other ways. Needless to say, that is something that I can assure you I am aware of and have thought about, but the main thing here is that it has to be additional.

The second thing I would say in relation to environmentally and socially beneficial projects is that one of the things I have been really worried about and have spoken to the government at length about is the fact that I have zero confidence in local government regulations in terms of appropriate land use planning, because I have never seen any local government—I should not say 'any', because maybe there are some; I am not familiar with many—that actually has rigour in land use planning, and I have come across that many times. So my issue was to make sure that NRM groups are supported and that NRM plans meet a basic level of criteria so there is consistency across the country in terms of NRM. That is why I am really pleased that in the legislation now you have a very clear undertaking that there will be consultation with natural resource management groups and with NRM plans, in addition to local and state government regulations, so that people right down to the catchment level will be able to have a say in whether or not a project that is being proposed, whatever it might be, is consistent with their NRM plans. That is one way of overcoming the problem that we have identified previously of farming land being displaced by other activities. We do not want that to happen; we want to have agricultural land protected.

So, Senator Xenophon, I appreciate the intent of this to recognise good socially and environmentally beneficial projects, but I do not want to compromise the integrity of the accounting to make sure that we get genuine additional abatement being delivered through this legislation.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Could I just further explore something with the minister and perhaps seek some guidance. I take his point about perhaps having some sort of survey. What I am trying to get an understanding of is what the criteria and requirements will be in terms of what I guess I would call geographical acceptance. Are we looking at an Australia-wide type survey, at which point you will look at a percentage of farmers' lowering of fertiliser usage? Are you talking region by region? That was actually put forward during the inquiry process, but at that point the department had absolutely no advice for us about the size of those regions and what the definitions of those regions would be. This has actually been one of the problems, and remains the most significant problem, in front of this piece of legislation, in that there is not a sufficient amount of detail to be able to look at this piece of legislation properly; it is simply not there. So could the minister give some guidance as to what the criteria would be to conduct that type of survey so we can ensure that the definition and determination from that would then meet the common practice criteria?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

Not to be frivolous, it would be common sense—comparing apples with apples. So it would be comparing region with region and area with area. It is about ensuring that there is common sense applied. Of course, we can add some words and guidelines around that, but it is the common-sense approach. It is about ensuring that you do compare apples with apples and that you do not compare apples with another region, another country or another non-specific industry. So it is industry-specific and area-specific. It is about making sure that in that region or in that industry you can have your examples developed. Ultimately, of course, the project will have to have the offset methodologies developed; they will have to go through the integrity process and then go through the reports and be demonstrated. The goal is here. It is about demonstrating that there is carbon sequest­ration and carbon abatement happening. If you can do that through a common-sense apples-with-apples examination and you can quantify it through that process then you are achieving that outcome. I always say to people: it is not rocket science. It is about making sure that farmers, land users, can participate in this.

Progress reported.