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Australian government releases Draft Emissions Reduction Fund methods for public consultation

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World Cement,

In order to ensure methods are ready for use under the Emissions Reduction Fund, the Department of the Environment has commenced development of a number of priority methods across a range of sectors. Emissions reduction methods set out the rules for estimating emissions reductions from different activities.

The department has released the draft ERF method determinations (listed here) for 28-day public consultation periods. The draft method determinations are based on methods that have been developed by the department in consultation with Technical Working Groups and industry.

Interested businesses, community organisations and individuals are invited to make a submission on the draft method determinations and submit it by the due date for each method. The government is seeking feedback on the content of the draft method determination and views on whether projects implemented under the methods are likely to cause any significant adverse social, environmental or economic impacts.

Innes Willox, Chief Executive of the Australian Industry Group, commented on the government's Emissions Reduction Fund (ERF) legislation:

"Amendments to the Government's Emissions Reduction Fund (ERF) legislation, released for consultation by Senator Nick Xenophon, are substantial and merit serious discussion. Australia's tough emissions reduction commitments will be difficult and costly to meet unless we can agree on an efficient, least-cost approach. But agreement in the Senate to any approach has appeared increasingly out of reach, with the parties holding seemingly irreconcilable positions."Senator Xenophon's proposals would build on the government's mooted Emissions Reduction Fund. The proposals are complex and will require close consideration from industry, which faces potential additional costs from the ERF. But it is already clear that the Xenophon amendments would improve on existing proposals in at least two ways.

"Firstly, by providing an avenue for longer crediting periods and offtake contracts that are better tied to project economics and investor needs, they would help make commercial involvement in the Emissions Reduction Fund more attractive and sustainable.

"Secondly, they would guarantee the achievement of Australia's targets at low cost by establishing a reserve of international carbon units. High quality Kyoto-compliant credits are available in high volumes at low prices, and bringing them in to the ERF as proposed should be a key part of the policy approach.

"Pushing back the start of an emissions reduction safeguard mechanism to 2016 also appears sensible, given the complexity of the issues involved. However, this element is the one with the greatest potential to impose unintended costs on industry and the public and deserves close scrutiny.

"Industry has repeatedly called for policy to be made through full consultation, not last-minute Senate deals. Senator Xenophon's decision to release exposure drafts and seek feedback from business and other stakeholders is commendable. These amendments are not the last word on climate policy. But they deserve constructive discussion and consideration by all sides of politics," Willox concluded.

Adapted from press release by Rosalie Starling

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