Greenfleet - Greenfleet's thoughts on the Clean Energy Future plan

18 July 2011

Greenfleet's thoughts on the Clean Energy Future plan

Well it's been a week since the Federal Government released its Clean Energy Future plan, which includes a price on carbon for Australia's top 500 greenhouse gas emitters, along with a suite of other tax changes, rebates and funding sources to help Australia take action on climate change.

We believe that this policy approach is more comprehensive than the CPRS and the recognition of forests and land-based activities is important in our plan to tackle climate change.

In summary

Forests are a recognised form of abatement, with liable parties able to reduce obligations using forest carbon credits by
- 5% during fixed price period (Jul 2012 - Jun 2015)
- 100% during market pricing period (Jul 2010 and beyond)
Light vehicle transport (<4.5 tonne vehicles) are not subject to carbon pricing
Voluntary action is treated as additional - with credits retired through government registers and not counted towards national target (i.e. goes beyond the 5% by 2020 reduction target)

Land-based measures

The Government intends to ensure that "land managers who use their skills, experience and knowledge of the land to lower carbon pollution are rewarded for their efforts." We support this sentiment and look forward to the environmental benefits that improved land management practices will bring.

Greenfleet's native revegetation program clearly demonstrates the sustainable land management practices being encouraged through the Carbon Farming Initiative and the Clean Energy Future Plan, and we are looking into the scheme details to determine how our program can best be integrated and expanded as part of the broader industry response.

We also welcome the investment into sustainable land management through the Biodiversity Fund, and we await the guidelines for further detail on this aspect of the plan.

Voluntary action

By setting guidelines for the treatment of voluntary action as additional to any emissions cap, the Government has acknowledged the importance of voluntary action to our nation's climate change solution.

We believe this is an important factor and it will encourage the continuation of voluntary emissions reductions by individuals and organisations around the nation.

In fact, we think it may encourage even more voluntary action - if the experience internationally is anything to go by. When carbon trading schemes have commenced operating overseas, such as Britain and the EU, the voluntary market has in fact increased - potentially for a few reasons...

The increased awareness of greenhouse gas emissions and the desire to take responsibility for your own carbon footprint in a way everyone understands
The desire to do more than just the absolute minimum required, (aiming to be carbon neutral for example), as we believe that a 5% reduction by 2020, though a good start, is not enough
The sense of communal effort - now that the big polluters and government are doing something, people don't feel like they are wasting their own efforts
The mix of emissions covered in the compulsory scheme - for instance if transport fuel is not covered in the compulsory scheme, more people may choose to take responsibility and offset their transport fuels voluntarily

Transport fuels

There is some complexity to the treatment of transport fuels in the plan - some industries will pay a carbon price and some are exempt - and we know that many companies will be somewhat confused and concerned about the impacts this might have on their business.

Here's a quick summary of the key points...

Households and small businesses using light vehicles (<4.5 tonne) on-road will not see any change in fuel prices to cover a carbon price.
From July 2012, businesses who currently receive credits to reduce the tax paid on transport fuels used off-road, will have those credits reduced and will effectively be paying a carbon price as a result. The agriculture, forestry and fisheries sectors have been exempt from this - in an attempt to keep food costs down for households.
Marine and rail transport providers will also have fuel tax credits reduced, thus applying a carbon price to these industries.
The government also wants to apply similar fuel tax credit changes to heavy on-road vehicles (>4.5 tonne vehicles) from July 2014, however this has not yet been agreed to by the entire multi-party committee that developed the plan.
Aviation providers will pay an effective carbon price through an increased fuel excise (or fuel tax) that will be equivalent to the carbon price.

We strongly encourage all individuals and any businesses who are exempt from carbon pricing on transport fuels to take responsibility for these emissions and offset them voluntarily - preferably with Greenfleet, of course.

Overall...

All in all, Greenfleet supports the Government's intention to put a price on carbon and believes this is a positive step in taking action to reduce carbon pollution and our impact on the planet.