As the public policy developments shifted to transport and energy efficiency initiatives, work in April continued with the practical challenges of construction, implementation and integration of a policy and fiscal framework to drive a just transition to net zero, and then negative emissions economy.
May will need to deliver Safeguard Mechanism Rules to underpin last month’s legislative changes; the implementation plan for Chubb and related Safeguard reforms to the carbon crediting framework; a parliamentary referral for the net zero plan as agreed between the Greens and Government; and a budget which will need to properly resource the institutions needed to steer this economic transition and leverage necessary private investment in emissions avoidance, reduction and removal.
No-one is pretending the Safeguard reforms are sufficient in themselves to drive the necessary industrial decarbonisation. However, their compounding liabilities provide significant investment guardrails and we have already some green shoot announcements leading the way here (see below). However, they will need to be supported by systematic springs of regulatory, investor and community guidance, transparency. This needs to be a managed transition, shifting away from a high-carbon political economy that has for too long thwarted credible decarbonisation strategies and prevented proper accountability for carbon emissions.
Nor should anyone pretend that the supply of Australian carbon credits is a ‘magic pudding’, with limitless carbon offsets generated by the growing demand from the safeguard compliance reforms, as well as sub-national and voluntary carbon initiatives. The fears of some and hopes of others need to be tempered with very real challenges to investment in land-based and other climate actions able to create carbon credits. Economic theory should say the demand will drive the supply, but the real-world challenges can’t be overlooked. These include: uncertainty about carbon abatement contract exit arrangements; potential restricted data release that may lead to distorted analysis of carbon estimation areas (see our earlier note on this); lags in new, reformed or available methods, and; delays while the new Carbon Abatement Integrity Commission is established.
It’s a hefty agenda for a government implementing a range of reforms watched carefully by a crossbench who brokered important improvements, and while the Coalition still determines its pathway.
Many of these issues will be in focus at our seventh Carbon Farming Industry Forum in Cairns later this month. This forum will also grapple with some of the many other issues facing the industry. These include: building on integrity frameworks; linkages to potential nature repair markets and environmental reforms; appropriate free, prior and informed consent for first nations peoples; insetting versus offset creation decisions of landholders; industry accreditation as well as Code of Conduct next steps; and establishment of a national database platform, as well as other platforms that can truly support and inform the task of nature, climate and history repair. Make sure you join us!
May will also see CMI continue further research on the policy positions and reforms needed for Australian and international policy, in the aftermath of Safeguard and Chubb Reviews, and amidst important international policy developments in compliance, voluntary and UNFCCC arenas. We are also working on our membership and sponsorship policies, as well as other initiatives on education, engagement and communication here and in the region – stay tuned.
As ever, appreciate your ongoing support and interest.
Carbon Market Institute