Non-Kyoto activities become Kyoto compliant

The Australian Government will elect to formally account for soil carbon and human induced regeneration of native vegetation in our national greenhouse gas inventory.

Under past rules, the absence of these activities from national accounts meant that any carbon credits generated from these activities would not have been Kyoto-compliant, and therefore, could not have been sold to businesses with a carbon price (or carbon tax) obligation. Non-Kyoto compliant credits can only be sold to businesses volunteering to offset emissions, and this was likely to affect demand and price.

Now, when Carbon Farming Initiative (CFI) methodologies are developed for these activities, they will generate Kyoto-compliant credits that can be purchased by businesses with obligations under the carbon pricing mechanism (carbon tax).

The reason why soil carbon and revegetation were previously not accounted for is due to concerns that carbon stored through these activities could be lost as a result of natural phenomena like bushfire and drought that are beyond the control of land managers.

 

Kyoto signatories recently agreed to some rule changes that mean that some emissions resulting from natural causes are no longer counted towards a countries’ Kyoto targets. In addition, the Government has recently implemented a series of improvements to the way it estimates emissions from land activities. This will reduce the risk of emissions from fire and vegetation loss due to natural causes being counted for the second Kyoto target.

A very small number of activities remain outside of the Kyoto accounting framework and remain ineligible to meet carbon tax obligations, such as feral animal management.

The Government had set aside funds to support non-Kyoto compliant activities. With these additional activities now Kyoto-compliant, the Government will now no longer proceed with the Non-Kyoto Fund, allowing $236 million to be returned to the Budget over the forward estimates.

Source and more information.