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  • Climate change isn’t going to wait for a political solution

    2010 - 01.28

    In 2008 Greenfleet, a non-profit tree planting organisation from Melbourne was awarded the right to display the Australian Federal Government’s Greenhouse Friendly logo. They were congratulated at the time by the Climate Change Minister, Penny Wong.

    “Greenfleet’s biodiversity forest projects will not only result in a reduction of greenhouse gases, they will also provide valuable habitat for native fauna and assist in the regeneration of the Australian landscape,” Senator Wong said.

    Sara Gipton the chief executive of Greenfleet says that they won the accreditation title after a long and expensive process. Greenfleet was also the first non-profit organisation to achieve the Greenhouse Friendly award as an ‘approved abatement provider’.

    It looks like the time and money spent gaining the Federal Government accreditation was worth it though. Any operation trading in Australia’s fledging voluntary carbon offsets market relies on its reputation to convince investors to buy its offsets so having the accreditation goes a long way towards this.

    Unfortunately no good thing lasts forever and barely a year after Greenfleet were given the accreditation Senator Wong announced that the Greenhouse Friendly program would be discarded. Instead it would be superseded by the Government’s centrepiece green policy, the Carbon Pollution Reduction Scheme and replaced by a new national carbon offset standard.

    Under this new scheme Greenhouse Friendly will be officially terminated on June 30th at which point the carbon offset standard will come into play. While the standard is supposedly designed to compliment the reduction scheme it is uncertain whether permissions for the scheme will be granted by parliament in time for June 30th. If it isn’t ready in time for June 30th with no scheme in place a situation is created whereby there is a regulatory vacuum for Greenfleet and its peers.

    Meanwhile, regulations governing forestry are unlikely to be released until after the scheme’s legislation is put to the Senate. So when Greenhouse Friendly goes, so will any national, Government-backed method of accrediting forestry carbon offsets.

    ”At the moment we have massive regulatory uncertainty,” Ms Gipton says. ”If the legislation doesn’t pass, and Greenhouse Friendly is still being shut down on the 30th of June, we have a problem because we don’t have a standard which we can tell our supporters, with certainty, that we operate to. It’s very important that we have that; people want to be assured that we are operating credibly.”

    The problems don’t end there. The emissions that Greenfleet offsets with forestry, which is an abatement method covered by the Kyoto protocol. The danger is that Greenfleet’s forestry projects could be counted towards Australia’s overall emission reduction target.

    The consequences of this would be that for Greenfleet’s supporters there would be less of an incentive to reduce their emissions. As the offsets generated by them would not be additional to the emission cuts Australia is committed to then they would in reality be helping the pollution of the big emitters.

    A possible solution to this problem would be for Greenfleet to opt in to the scheme and retire its permits so they cannot be counted towards the national target. There are two obvious problems with this easy sounding solution. The first is that they would need to retire these permits on a registry that hasn’t been established yet and secondly Greenfleet can not participate in something that doesn’t exist.

    This conundrum is an example of how the Government’s repeatedly delayed reduction scheme has created confusion among participants in the voluntary carbon market.

    ‘Regardless of what happens in Canberra, Greenfleet will continue to plant trees, and those trees will continue to pull carbon dioxide from the air no matter what form of scheme passes Parliament – if one passes.. ”The longer we wait on climate change, the harder the task, and climate change… isn’t going to wait for a political solution.” Ms Gipton says.

    A spokeswoman for Senator Wong said: ”The Government is working through the implementation of the national carbon offset standard with stakeholders.”

    The Timber Investment Blog is sponsored by Greenwood Management. For more information on investing in Forestry please click here

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