Member for Isaacs

ABC TV News 24 Melissa Clarke 5 May 2011

05 May 2011


Parliamentary Secretary for Climate Change and Energy Efficiency

5 MAY 2011


CLARKE: Mark Dreyfus thanks very much for joining us.

DREYFUS: Hi Melissa.

CLARKE: Can you give us a quick explanation of how the Carbon Farming Initiative will
work? How do farmers create carbon credits and how will they get the money from it?

DREYFUS: The Carbon Farming Initiative is a new legislated scheme that we hope to put
through the Parliament later this year which is going to provide opportunities for farmers to
engage in new farming practices, new land use practices, that will assist in reducing Australia’s
carbon emissions. It will be things like manure management, soil carbon, and depending on the
methodologies that are used, some forestry activities.

CLARKE: Some of these sorts of projects though will take a long time. Things like planting
forests; it takes a long time for the trees to grow and for that abatement to happen. There are
long timeframes involved in changes to soil management programs. So if you are paying a
farmer early in that space how do you ensure the project is still being covered down the track or
does the farmer not get money or a credit for that until years down the track?

DREYFUS: The farmer will be being paid full credits up front but that’s the reason why it’s
necessary to have a registry system. That‘s what the legislation does, provides a methodology
so we can be certain that there is going to be the emissions abatement achieved and we can be
certain that there will be, what is called, environmental integrity.

The other reason for approving the methodologies up front is to ensure that we are getting
what is known as additionality, in other words, that we are getting from land users, from
farmers, something that they wouldn’t have done anyway in the ordinary course of their
business. Because what we are about here is improving the way in which Australia reduces its
emissions, expanding the range of activities through which we can reduce emissions.

CLARKE: Does there then have to be strong monitoring and enforcement to make sure
that those projects are followed through by the methods that farmers have said they will

DREYFUS: I’d expect that there will need to be some monitoring but one of the important
aspects is that having approval upfront of the methodology for abatement is to make sure that
before farmers and land users embark on a particular methodology we all know in advance that
its got environmental integrity, that it is – whether it be soil carbon, or manure management,
or tree planting, or forest management – something that is going to produce the emissions
abatement that has been calculated.

CLARKE: Well if we are setting up legislation and a process where methodologies can be
approved, we feel that we can account for carbon savings that farmers are going to make. If
farmers can benefit and it can be shown they are saving carbon, surely it can be shown if
they’re doing bad land management practices, shouldn’t they also then come under any future
emissions trading scheme or carbon pricing scheme that applies to the economy more broadly?

DREYFUS: We’re not proposing at present that agriculture will be included in the carbon
pricing scheme and this is to do with what is covered under Kyoto at the moment. What we
are proposing is this voluntary scheme that farmers and land users will be able to participate in.

CLARKE: Is that fair for other industries that the agriculture sector can get a win from
carbon improvements but might not make any losses? Is that fair to other sectors who will
have to come under a broader carbon pricing scheme?

DREYFUS: We think that all of Australia is going to actually benefit from the carbon price
scheme. We think that industries in the long term will benefit by moving to low carbon
technologies, low emissions technologies. So I don’t think it’s a matter of win or lose. I don’t
think it is a matter of some industries here being given the possibility of benefit and others are
only going to lose. I think that Australian industries potentially are going to win just as the
community and the world community is going to win by lowering carbon emissions.

CLARKE: On the political side of getting changed to a low carbon emissions economy.
One of the key independents, Tony Windsor, has pointed to this idea of farmers being able to
get carbon credits and trade credits as being a real positive from making a switch to a low
carbon emissions economy. Is the success of the Carbon Farming Initiative important in the
government being able to promote the idea and benefits of broader carbon policies across the

DREYFUS: I think it is important and I think Tony Windsor is right to draw attention to this.
He is right indeed, in his very warm support of the Carbon Farming Initiative, because he sees,
as we see, that there are real opportunities for farmers in this. There are real opportunities for
users of the land to assist in the emissions reduction task that Australia has. We are looking by
2020 to get to annual emissions reductions of 160 million tonnes and the land sector can play a
part in that emissions reduction task.

CLARKE: And just finally if I can ask you about the credits, the subsidy system for solar
panels. The Government has cut further the subsidy for solar panels. Why is the Government
doing this? Is this a reflection of the fact that the solar panels credit scheme has been in
trouble for a while now, ever since the troubled scheme was mixed in with the renewable
energy target and the problems that flowed from that?

DREYFUS: In fact what we have seen is a wildly successful industry. From the position we
are now in we can see that it’s not necessary for the industry, in order to be sustainable in the
future, to have this level of subsidy and we are very concerned about the impact that it has had
on household electricity bills.

Adjusting the solar credit multiplier is what is going to be announced later today. We had
announced that the multiplier was going from 5 to 4 on 1 July. We are going to announce later
today that it is in fact going to be adjusted from 5 to 3 on 1 July. The purpose of doing that is to
reduce the burden on household electricity bills and to ensure the sustainability of the

We have been listening to industry Melissa, and very many people in the industry have been
calling for this kind of adjustment to be made. We think it’s the right thing to do at this time. It
is of course an artificially supported industry as long as it has this kind of certificate
arrangement and this kind of multiplier arrangement. It’s about getting the balance right
between the burden on household electricity bills and sustainability of the industry.

CLARKE: But one of the other things the industry has been saying is there has been a lot
of changes in recent years, so when it comes to subsidy and that causes confusion and
instability and uncertainty into the future, is this the last change you will make for awhile now?

DREYFUS: It’s the right thing to do at the moment. This is an industry that is going to be
supported by Government into the future. The renewable energy certificates will go on until
2030. We want it to be a sustainable industry and that’s why we are changing the multiplier.

CLARKE: Mark Dreyfus thanks very much for joining us.

DREYFUS: It is good to be with you Melissa.