So here we are at Carbon Expo, the one stop shop for carbon marketers, offset providers and other hangers on!
Right near the start there was a panel on Direct Action and the design of the Emissions Reduction Fund. A great range of speakers from NDEVR Environmental Consulting, Westpac, Climate Works Australia, Ernst and Young and Bloomberg.
At this early stage, I just wanted to note four interesting points made in the discussion about an offsets scheme:
- We need to balance economic and environmental policy. Environmental policy demands integrity and precision as outlined in detailed legislation. Economics wants simple rules of thumb that can ignite innovation.
- Carbon cost curves suggest the amount of different kinds of abatement available and the cost to provide it. The best carbon cost curves for Australia suggest that to reach a target of 5% reduction by 2020 will need all of energy efficiency abatement and half of the land abatement. A target of 25% will need all of energy efficiency and land and some clean power switching as well.
- Looking for cheapest cost depends on the time window. For example, a forest project might take 6-7 years to achieve its highest rate of abatement. This might make it cheaper to deliver a larger amount of abatement over a longer time than say some energy efficiecy projects with a shorter time window.
- Getting in early in the proposed auction process will be the most effective. That’s because if you get a 5 year contract in the first year, you will get money out of the following budgets as well. The early contracts will leave less room for new contracts in subsequent years.
Food for thought for Aboriginal carbon farmers who want to take advantage of the proposed Direct Action policy. Ideas coming thick and fast!