Thank you for the invitation to submit comments on the Wet Tropics Region Biocarbon Sequestration Project. Those I have had time to compile are as follows:
The project is managed by Degree Celsius, a joint venture between Terrain NRM Ltd, the natural resource management specialist NGO for the Wet Tropics region, and Biocarbon Pty Ltd, an Australian private limited liability company.
The project is described in a Project Design Document (PDD) and appendices, currently undergoing validation against the Climate, Community and Biodiversity Alliance (CCBA) standard, and also on a website ( HYPERLINK "http://www.degreecelsius.com.au" www.degreecelsius.com.au).
The project is currently selling offsets from the project at $A32/tonne CO2e and according to the PDD the intention is to sell 100,000 tonnes of verified offsets as an initial tranche. The project would greatly benefit from validation against the CCBA standard as de-facto endorsement of this business strategy.
This may be problematical since the CCBA standard is a project design standard, and does not currently, in my understanding, post-facto verify emission reductions achieved by projects. It is doubtful whether the CCBA standard would or should ever verify emission reductions which are expected to occur in the future.
The project could be considered to fall short of best practice in a number of other respects which are detailed following.
Transparency of published information: It is difficult to determine the exact stage of project development and implementation. The broker organisation is already selling offsets through its website but it is unclear whether the broker organization has yet entered into legal arrangements (beyond non-binding expressions of interest) with the landowners who own the trees.
There is reference in the PDD to an Appendix 2 with field mensuration results and analysis. No such results or analysis are provided but rather a field measurement methodology is documented in Appendix 2. The only information on carbon sequestered, on page 45 of the PDD, indicates that the plantings currently involved in any way in the project will have sequestered a total of 21,351 tonnes carbon by the year 2038. This equates to 78,359 tonnes CO2 which will have been absorbed, again by 2038.
These plantings include ten plantings which have undergone some field measurement, six more plantings which have not been measured, and three plantings for which there is no indication that planting has actually occurred. Of these three plantings, two of fifty hectares each make up more than half of the total carbon to be sequestered.
Further contributions to the total carbon to be sequestered are made by seven areas of assisted natural regeneration and four areas of avoided deforestation. The eligibility of these areas to generate credits under Kyoto accounting rules is not demonstrated.
The PDD (2.1.4. Statement on results and overall GHG benefits) says “Based on an initial assessment of landholders who have expressed interest, we consider that there is already approximately 200,000 tonnes of CO2-equivalent in the Project region. We are seeking to sell an immediate tranche of 100,000 tonnes”. They have apparently commenced doing so.
However they have not demonstrated that they actually own any CO2e (in a legal property-right sense), have effectively risk managed the carbon currently stored or to be stored by 2038, or have the means in place transfer ownership, register, track and retire credits.
The “Our Product” subpage on the proponent's website says that current investments in purchase of offsets will be used to meet the costs of verification of the project against the CCBA standard. However it is possible to go straight to the emission calculators provided on the site (for example to calculate the annual emissions from your motor vehicle), to calculate those emissions, purchase the offsets to those emissions, and to leave the site without ever encountering the information that your investment has actually gone towards a verification process (which of itself will generate emissions from travel, office based work etc). It is an open question whether this could constitute a breach of the Trade Practices Act.
While the offset purchase may indirectly lead to more trees being planted, there does not appear to be any chain of property ownership from sequestered carbon through to offset purchaser.
In terms of carbon accounting the project apparently seeks to claim credit from both the baseline case (plantings already undertaken with the injection of considerable amounts of public funding including through the Wet Tropics Tree Planting Scheme) and from (projected) future expansion of plantings. There seems to be a misunderstanding of baseline and credit principles.
Possible interplay between the voluntary offsets initiative proposed for CCBA verification and the looming Commonwealth Carbon Pollution Reduction Scheme (CPRS) is not addressed. It is of concern that landowners participating in the presently proposed voluntary scheme may enter into commercial arrangements over thirty years which they would not enter into in full knowledge of the detail of the CPRS. The project proponents state that landowners will receive 60-70% of the sale price of offsets. Is this appropriate in the medium and longer terms under the CPRS?
Risks to the permanence of the retention of credited carbon are briefly listed but risk management strategies are not addressed at all in the PDD. In a Q&A sheet for landowners a 10% risk management buffer is mentioned but there is no indication how or by whom this will be managed.
Regarding permanence, the contract term for engagement with landowners is 30 years (with an option to renew for another 30 years but whose option is not specified) so probably no guarantee can be given of permanence beyond this time. It is also of concern that the landowner may be left with all the carbon liability at the end of the contract term, at a time when the replacement price of credits (in the case of fire for example) might be at high multiples of the credits’ current sale price.
Offsets from the project currently sell for $A32/tonne CO2e. Of this, according to the published information, some is to be used to fund set up costs for the project such as validation against the CCBA standard, some is to be used to pay landowners for the carbon they have sequestered to date, and some will be used to research and support additional carbon storage through agricultural and pastoral management. All these things may be worthy things to spend money on but what is not demonstrated is that there is a commercially viable and transparent funding model underpinned by fully developed commercial and contractual arrangements to enable the project to proceed and succeed in the longer term.
Comment 1
Dear Ms Durbin,
Thank you for the invitation to submit comments on the Wet Tropics Region Biocarbon Sequestration Project. Those I have had time to compile are as follows:
The project is managed by Degree Celsius, a joint venture between Terrain NRM Ltd, the natural resource management specialist NGO for the Wet Tropics region, and Biocarbon Pty Ltd, an Australian private limited liability company.
The project is described in a Project Design Document (PDD) and appendices, currently undergoing validation against the Climate, Community and Biodiversity Alliance (CCBA) standard, and also on a website ( HYPERLINK "http://www.degreecelsius.com.au" www.degreecelsius.com.au).
The project is currently selling offsets from the project at $A32/tonne CO2e and according to the PDD the intention is to sell 100,000 tonnes of verified offsets as an initial tranche. The project would greatly benefit from validation against the CCBA standard as de-facto endorsement of this business strategy.
This may be problematical since the CCBA standard is a project design standard, and does not currently, in my understanding, post-facto verify emission reductions achieved by projects. It is doubtful whether the CCBA standard would or should ever verify emission reductions which are expected to occur in the future.
The project could be considered to fall short of best practice in a number of other respects which are detailed following.
Transparency of published information: It is difficult to determine the exact stage of project development and implementation. The broker organisation is already selling offsets through its website but it is unclear whether the broker organization has yet entered into legal arrangements (beyond non-binding expressions of interest) with the landowners who own the trees.
There is reference in the PDD to an Appendix 2 with field mensuration results and analysis. No such results or analysis are provided but rather a field measurement methodology is documented in Appendix 2. The only information on carbon sequestered, on page 45 of the PDD, indicates that the plantings currently involved in any way in the project will have sequestered a total of 21,351 tonnes carbon by the year 2038. This equates to 78,359 tonnes CO2 which will have been absorbed, again by 2038.
These plantings include ten plantings which have undergone some field measurement, six more plantings which have not been measured, and three plantings for which there is no indication that planting has actually occurred. Of these three plantings, two of fifty hectares each make up more than half of the total carbon to be sequestered.
Further contributions to the total carbon to be sequestered are made by seven areas of assisted natural regeneration and four areas of avoided deforestation. The eligibility of these areas to generate credits under Kyoto accounting rules is not demonstrated.
The PDD (2.1.4. Statement on results and overall GHG benefits) says “Based on an initial assessment of landholders who have expressed interest, we consider that there is already approximately 200,000 tonnes of CO2-equivalent in the Project region. We are seeking to sell an immediate tranche of 100,000 tonnes”. They have apparently commenced doing so.
However they have not demonstrated that they actually own any CO2e (in a legal property-right sense), have effectively risk managed the carbon currently stored or to be stored by 2038, or have the means in place transfer ownership, register, track and retire credits.
The “Our Product” subpage on the proponent's website says that current investments in purchase of offsets will be used to meet the costs of verification of the project against the CCBA standard. However it is possible to go straight to the emission calculators provided on the site (for example to calculate the annual emissions from your motor vehicle), to calculate those emissions, purchase the offsets to those emissions, and to leave the site without ever encountering the information that your investment has actually gone towards a verification process (which of itself will generate emissions from travel, office based work etc). It is an open question whether this could constitute a breach of the Trade Practices Act.
While the offset purchase may indirectly lead to more trees being planted, there does not appear to be any chain of property ownership from sequestered carbon through to offset purchaser.
In terms of carbon accounting the project apparently seeks to claim credit from both the baseline case (plantings already undertaken with the injection of considerable amounts of public funding including through the Wet Tropics Tree Planting Scheme) and from (projected) future expansion of plantings. There seems to be a misunderstanding of baseline and credit principles.
Possible interplay between the voluntary offsets initiative proposed for CCBA verification and the looming Commonwealth Carbon Pollution Reduction Scheme (CPRS) is not addressed. It is of concern that landowners participating in the presently proposed voluntary scheme may enter into commercial arrangements over thirty years which they would not enter into in full knowledge of the detail of the CPRS. The project proponents state that landowners will receive 60-70% of the sale price of offsets. Is this appropriate in the medium and longer terms under the CPRS?
Risks to the permanence of the retention of credited carbon are briefly listed but risk management strategies are not addressed at all in the PDD. In a Q&A sheet for landowners a 10% risk management buffer is mentioned but there is no indication how or by whom this will be managed.
Regarding permanence, the contract term for engagement with landowners is 30 years (with an option to renew for another 30 years but whose option is not specified) so probably no guarantee can be given of permanence beyond this time. It is also of concern that the landowner may be left with all the carbon liability at the end of the contract term, at a time when the replacement price of credits (in the case of fire for example) might be at high multiples of the credits’ current sale price.
Offsets from the project currently sell for $A32/tonne CO2e. Of this, according to the published information, some is to be used to fund set up costs for the project such as validation against the CCBA standard, some is to be used to pay landowners for the carbon they have sequestered to date, and some will be used to research and support additional carbon storage through agricultural and pastoral management. All these things may be worthy things to spend money on but what is not demonstrated is that there is a commercially viable and transparent funding model underpinned by fully developed commercial and contractual arrangements to enable the project to proceed and succeed in the longer term.
Kind regards,
Mark Jackson
Director
The Carbon Store Pty Ltd