Offsetting COnfusiOn

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                                                                                                        Issue 14, February 2010

In thIs edItIon of the                           which can be confusing for consumers or               The Standard will come into effect only
                                                 business. Some critics have claimed that              once the CPRS is implemented.
KInesIs ClImate monItor,                         offsets merely offer a new form of moral
we examIne Carbon                                absolution (See Cheat Neutral and                     Until now, carbon offset products available
offsettIng, opposItIon                           The New York Times).                                  on the voluntary market were certified
polICy and natIonal                                                                                    by the Federal Government’s Greenhouse
CommItments under the                            In Australia the integrity of carbon offsets          Friendly Scheme, first introduced in 2001.
                                                 has recently attracted regulatory scrutiny,           This program is due to be phased out by
Copenhagen aCCord.                               particularly from the Australian Competition          July 2010. According to the EPA Victoria

                                                 and Consumer Commission (ACCC).                       and RMIT Carbon Offset Guide, only 16
                                                 Graeme Samuel, ACCC’s chairman, has said              out of the 85 listed offset companies are
                                                 that the ‘green credentials’ of companies are         registered under the Greenhouse Friendly

                                                 being increasingly questioned by customers,           Scheme. Concerns have been raised that in
                                                 with complaints about green advertising rising        the event that the CPRS fails to pass the
                                                 from almost none two years ago to 500 since           Senate, neither the Greenhouse Friendly
                                                 early 2008 (See The Age).                             Scheme nor the Standard will be in
The Federal Government has announced                                                                   operation and individuals and business will
the details of its voluntary National Carbon     In January the Federal Government sought to           once again face uncertainty.
Offset Standard (the Standard) which             remove some of this confusion by introducing
aims to provide guidance on what is an           a National Carbon Offset Standard. The
acceptable form of carbon offset.                Standard seeks to provide greater confidence
                                                 to consumers and business by providing
Carbon offsets are a means to balance the        guidance on carbon offsets and corporate                  WANT TO KNOW MORE?
greenhouse emissions which a business,           carbon neutrality. It specifies:
individual or government are willing to take       •	 the type of carbon offsets that will             To find the National Carbon
responsibility for, by paying for a project or        constitute genuine additional emissions          Offset Standard go to:
activity which either reduces emissions or            reductions in the context of the CPRS  
sequesters carbon from the atmosphere.             •	 general principles to be followed by             initiatives/carbon-offset.aspx
                                                      organisations calculating the carbon
Over recent years offsetting has emerged as           footprint of their operations or products and    To read the EPA Victoria and
a mechanism for companies to reduce their          •	 requirements for measuring, recording            RMIT Carbon Offset Guide go to:
carbon impact. This new market has led                and auditing carbon footprints and offsets
to the creation of new terms and processes            to ensure this veracity.

One of the difficulties facing                   providers claim to neutralise the                    be asked about the calculation of
consumers who wish to buy                        emissions from a single Sydney to                    environmental impacts, the costs
carbon offsets is the wide range of              Melbourne flight.                                    and the efficacy of the projects
prices and claims made by offset                                                                      receiving funding.
providers. The following table                   The table shows a clearly diverse
                                                                                                          WANT TO KNOW MORE?
shows how four different offset                  and variable picture. Questions can
                                                                                                      To use the Qantas offset calculator go to:
 FLIGHT EMISSIONS                                                                           
 (tonnes of CO2-e)                     COST?      WHAT DOES YOUR MONEY GO TO?
 QANTAS CALCULATION:                   $1.02      To the provision of energy efficient light
 0.107                                            bulbs and water saving showerheads to
                                                                                                      To use the Climate Friendly flight
                                                  eligible homes and businesses.
                                                                                                      calculator go to: https://climatefriendly.
                                       $6.51      To wind, geothermal, hydro and biomass              com/flight?status_message=Please+comple
                                                  projects around the world. Countries include
 0.2                                              China, Turkey, India and Australia.
                                       $5.06      To the generation of renewable energy in            To use the Carbon Reduction
                                                  India from burning agricultural waste
                                                                                                      Institute calculator go to:
 0.23                                             and/or implementing energy efficiency
                                                  lighting in New Zealand.
 GREENFLEET CALCULATION:               $1.50      To mixed species trees which will each              To use the Greenfleet calculator go to:
 0.12                                             absorb and hold an average of 268 kilos
                                                  of CO2 by the time they are fully grown.

In the January edition of the Climate           Brazil and Indonesia have submitted                   In contrast, analysis by US think tanks
Monitor we noted that one of the key post-      targets that are more ambitious than those            The Center for American Progress and
Copenhagen milestones was the January           they had tabled prior to Copenhagen.                  The Peterson Institute for International
31st deadline for countries to submit their     Other nations, including Canada have                  Economics both argue that current targets
emissions reduction targets and actions to      submitted weaker targets.                             could put the world on a trajectory towards
the Copenhagen Accord. As the initial                                                                 a 2 degree limit.
draft of the Copenhagen Accord did not          Analysis by Ecofys argues that only two
contain any emissions reduction targets, this   developed countries (Japan and Norway)                      WANT TO KNOW MORE?
date was to be crucial in judging the final     have submitted targets that are in line
outcome from Copenhagen.                        with the reductions needed to achieve                 To see the list of targets and actions
                                                the Copenhagen Accord target of limiting              submitted to the Copenhagen Accord go to:
With this deadline now passed, more             global warming to two degrees by 2050.       and
than fifty countries (responsible for over      Ecofys states that if each country meets    
80% of global emissions) have submitted         its target then the world is likely to see
targets. Some countries, including Russia,      warming of more than three degrees.                   To read the analysis by Ecofys see:

COALITION ANNOUNCES ITS CLIMATE POLICY                                                                climate_action_tracker.htm

Australia’s Federal Opposition has released     tree planting and solar panels, will contribute       The Center for American Progress analysis
the details of its new ‘Direct Action’          and thus how the policy will achieve a 5%             is at:
climate change policy which aims to reduce      reduction by 2020.                                    issues/2010/02/copenhagen_progress.html
Australia’s emissions by 5% by 2020. The
policy establishes a $3.2 billion emissions     How will the policy be funded?                        The Peterson Institute report can be found
reduction fund available to firms that          It is unclear how the $3.2 billion                    at:
reduce their emissions below their ‘historic    emissions reduction fund will be financed.
average’. Businesses that increase their        Presumably, funding will come through
emissions above their average will incur a
penalty. The policy also aims to achieve
                                                consolidated revenue.                                 The Way Forward
the sequestration of 85 million tonnes          What penalties will be applied                        After Copenhagen
of CO2-e in soils and the planting of 20        to business?
million trees by 2020 together with the         The Coalition policy states that businesses will      In January Ross Garnaut presented the
provision of a $1000 household rebate for       incur financial penalties if their emissions exceed   Keynote Address to the Annual Conference
solar hot water and photovoltaic panels.        their average in a given year. Details of what        of Supreme and Federal Court Judges
                                                these penalties will entail have not been released.   in Canberra. The Address provides an
To what extent will each action                                                                       examination of the outcomes of Copenhagen
contribute to reducing emissions?                    WANT TO KNOW MORE?                               and explores some of the ways forward to a
Other than stating that 85 million tonnes                                                             global agreement on climate change. Garnaut
of abatement will be achieved through           To see the Coalition climate policy go to:            also considers alternatives for Australian
carbon sequestration in soils, it is unclear                  climate change policy, including regulatory
how the policy’s other actions, such as                                                               and market based approaches, to create a low
                                                                                                      carbon economy.
 THREE FIGURES AbOUT TREES:                          WANT TO KNOW MORE?
                                                                                                             WANT TO KNOW MORE?
 Australia’s annual emissions of CO2-e:         Australia’s annual emissions are based on
 553 million tonnes                             Department of Climate Change figures:                 To read a transcript of the address go to:
 Sequestration potential of Coalition’s         change/~/media/publications/greenhouse-report/        lets-tell-our-leaders-to-get-on-with-the-job-
 20 million trees by 2020 policy:               national-greenhouse-gas-inventory-pdf.ashx            20100126-mut4.html
 290,000 tonnes
                                                Sequestration potential of 20 million trees 
 Sequestration potential of this policy         was estimated by Kinesis using data from:
 in 2020 as a percentage of Australia’s
                                                                                                      Level 2, 255 Riley Street, Surry Hills
 current annual emissions: 0.05%                Researchers/Technical_information/index.aspx
                                                                                                      telephone 02 8005 4290

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