The Carbon Farming InitiativeThe Carbon Farming Initiative

Eliza MurrayAustralian Government Department of Climate Change and Energy Efficiency

1

Climate change and agriculture in Australiain Australia• Agriculture and forestry generate around

18% of Australia’s emissions18% of Australia s emissions

• Carbon price from 1 July 2012A i lt t– Agriculture exempt

• Landholders can receive CFI credits for:– Reducing emissions from agriculture

– Increasing carbon in soils and vegetation

• Credits can be sold to people and businesses wishing to offset their emissions

Types of projects• Reforestation

• Revegetation

• Rangelands restoration

• Savanna fire

yp p j

• Revegetation

• Soil carbon

• Native forest protection

• Savanna fire management

• Livestock management• Native forest protection

• Managed regrowth forests

g

• Fertiliser management

• Manure managementg

auscarbon

3

Design of the CFI

• Legislation passed in August 2011

• Independent Administrator established December 2011

• Monitoring, reporting and verification

– Project crediting ex postj g p

– Administrator can compel audits

• Measures to prevent fraud and misconduct• Measures to prevent fraud and misconduct

4

AdditionalAdditionalAdditionalAdditional

PermanentPermanentSupported by

peer-reviewed Supported by

peer-reviewed sciencescience

Integrity PrinciplesIntegrity

PrinciplesLeakage

avoidanceLeakage

avoidanceInternationally consistent

Internationally consistent avoidanceavoidancey consistenty consistent

MeasurableMeasurableConservativeConservative

5

Offsets Methodologies • Developed by government and non-

government g

• Assessed by Domestic Offsets Integrity Committee (DOIC) ( )

– Public consultation

– Makes recommendations to Minister

• Approved by Minister

• Legislative instruments

Additionality• Regulatory additionality test

• Positive listPositive list– Activities that go beyond common business

practice

• Baselines

7

Permanence obligations

• Maintain carbon or hand back credits

• Re establish carbon after a fire or drought• Re-establish carbon after a fire or drought

• Risk of reversal buffert l hil t b i t bli h d– temporary losses whilst carbon is re-established

– wrong doing that can’t be remedied.

C b i t bli ti• Carbon maintenance obligation

8

Avoiding adverse impactsAvoiding adverse impacts

• ‘Negative’ list

– Projects that risk significant adverse impacts for water, biodiversity, local communities or employmentcommunities or employment.

• Must meet environment, planning and water requirementsrequirements

• Consider regional NRM plans

• Co-benefit index – biodiversity, indigenous communities

9

L d S t C b d Bi di it Ad i B dLand Sector Carbon and Biodiversity Advisory Board

Regional NRMRegional NRM Planning for

Climate Change

Carbon Farming Futures

Indigenous Carbon

Farming Fund

Carbon Farming Skills

CFI Non-Kyoto Carbon Fund

Biodiversity Fund

Further information:

www.climatechange.gov.au/cfi

cfi@climatechange.gov.au

11

Extra graphics for Q&A

12

Carbon storage potential

13

Permanence obligations

250

200

100

150

Carb

on

50

0

0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 100

Credits issued (cumulative) Carbon stored (cumulative)

14

Credits issued (cumulative) Carbon stored (cumulative)

15Source: CSIRO 2009

Common practice test

16

Scheme mechanics

Methodology Approval

Project Approval

Reporting and verification

Crediting and trading

Termination or Transfer of

Projects

17

Markets for credits

Kyoto projects Non-Kyoto projectsSELLERS

Carbon price mechanism

2012

International compliance

market

Voluntary markets

Non-Kyoto fund

2013

BUYERS

2012 2013

18

CFI and carbon price mechanismCFI and carbon price mechanism

• Entities can meet carbon price obligations ith K t li ibl CFI itwith Kyoto eligible CFI permits

• CFI carbon credits are called ‘Australian C b C dit U it ’ (ACCU )Carbon Credit Units’ (ACCUs)

– 1 ACCU = 1 tonne of abatement

• Up to 5% fixed price period: 2012 - 2015

• Uncapped in floating priceUncapped in floating price

19

Links to Australia's national accountsLinks to Australia s national accounts

• Measurement and estimation must be consistent with national accounts

– UNFCCC reporting guidelines

– IPCC Good Practice guidance

• Verified site specific data will feed into national accounts as part of continuous improvementaccounts as part of continuous improvement

• Step-wise process for new estimation approaches

• CFI abatement subject to UNFCCC ERT

20