CPRS status

This week the government returned the Carbon Pollution Reduction Scheme (CPRS) Bills to the Senate.

Great uncertainty remains as to:

  • whether these Bills will be passed now or later
  • if passed, the final detail of the CPRS, or
  • otherwise, whether a double dissolution election will result.

The government and Opposition continue to negotiate the passage of the bills.1

Exclusion of agriculture from the CPRS

On 15 November 2009 the Minister for Climate Change Penny Wong announced that the government has agreed to a permanent legislative exclusion of agriculture from the CPRS, meeting one of the Opposition’s key demands for passage of the CPRS.

Agricultural offsets

In addition to agriculture’s exclusion from the CPRS, there has been considerable discussion and indication from the government that it is prepared to allow some mechanism to allow farmers to be ‘part of the solution’.

It appears at this stage that the government is open to considering such offsets subject to being satisfied on issues to do with certainty in the monitoring and quantification of the offsets, and acceptance of them under international carbon accounting rules. However, given those uncertainties, it is likely that such offsets will not be included in the CPRS (if passed at this time) and will only be included (if at all) in the future.

Negotiations regarding their acceptance in international carbon accounting rules can continue through the United Nations Copenhagen Conference, and there are indications from the Australian Government that it may advocate this.

Opportunities

The allowance of agricultural offsets would present significant opportunities.

Agriculture

There is significant scope for agriculture to gain additional income through generating agricultural offsets.

Emitters

Significant opportunities exist for emitters to gain access to an increased range of lower cost offsets. The market has observed several large emitters already looking to sure up a supply of offsets.

Waste management

Offsets potentially present additional drivers for the development of alternative waste treatment technologies, in particular biochar.

Types of agricultural offsets

Agricultural offsets fall into one of two basic categories:

  • soil carbon sequestration, or ‘sinks’, and
  • reduced/avoided GHG emissions.

Sinks

Examples of practices to increase soil sequestration by ‘sinks’ include:

  1. low-tillage or no tillage
  2. use of manures and compost
  3. conversion of monoculture systems to diverse systems
  4. crop rotations and winter cover crops
  5. establishing perennial vegetation on steep slopes, and
  6. biochar.

There has been much publicity concerning this latter method. It involves enriching soil with charcoal. Its effectiveness depends on the type of material burnt and the temperature at which it is burnt.2

Reduced emissions

Examples of changes in farming practices which can reduce emissions include:

  1. reduction of nitrogen fertilizer use or increase in nitrogen use efficiency
  2. reduction in the frequency and duration of flooding of rice paddies
  3. reduction in greenhouse gas emissions from manure and effluent, and
  4. reduction in greenhouse gas emissions due to changes in animal management practices, including dietary modifications.

The US approach

Section 503 of the proposed American Clean Energy and Security Bill (also known as the Waxman-Markey Bill) (Section 503) includes an allowance for agricultural offsets. These have been identified in the United States as potentially a significant source of domestic abatement.

Section 503 outlines the method for the creation of a list of eligible domestic agricultural and forestry offset practice types. The section states that the list is to include agricultural, grassland, and rangeland sequestration and management practices, such as:

  1. altered tillage practices
  2. winter cover and other means to increase biomass returned to the soil in lieu of planting followed by fallowing
  3. reduction of nitrogen fertilizer use or increase in nitrogen use efficiency
  4. reduction in the frequency and duration of flooding of rice paddies
  5. reduction in carbon emissions from organic soils
  6. reduction in greenhouse gas emissions from manure and effluent, and
  7. reduction in greenhouse gas emissions due to changes in animal management practices, including dietary modifications.