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Will Bob Carr change his tune on vegetation compensation?

Mick Keogh - Sunday, March 04, 2012

The appointment of former NSW Premier Bob Carr to the Senate and the Foreign Minister role has generally been hailed by the media as a positive for the Australian Government, although there are many in regional NSW who are less than enamoured with the former Premier because of his management of native vegetation and regional issues generally in NSW. In what could be an interesting irony, the former Premier will be required to revisit those issues in his role as Foreign Minister, and to advocate a very different approach.

Bob Carr became Premier of NSW as a result of the ALP winning the NSW election in March 1995. One of his first acts as Premier was to implement SEPP-46, a regulation that banned the clearing of native vegetation on farmland in NSW. This was enacted without any warning for landholders, and despite enormous controversy, was further consolidated via the NSW Native Vegetation Act in 1997. Overnight, landholdings that farmers had purchased and were intending to develop for agriculture were rendered virtually worthless, and in spite of decades of disputation, those landholders were never compensated for the losses they incurred. This was despite both Parliamentary and Productivity Commission inquiries recommending that landholders should be compensated for the costs imposed on them to achieve public benefits. The matter is currently the subject of a High Court case being pursued by Peter Spencer, who came to national prominence through his hunger strike aimed at bringing attention to the issue.

The approach in NSW under Carr was distinctly different to that under Premier Peter Beattie in Queensland, who held off blanket bans on vegetation clearing for a considerable period, worked in consultation with landholders, and eventually ensured those most affected received financial compensation.

One of the major public benefits generated from the bans on land clearing was a reduction in Australian greenhouse emissions (more than 80 million tonnes per annum), and it is widely recognised that this is the only reason Australia has been able to meet its emission target under the Kyoto Protocol, which was to limit national emissions in 2012 to 108% of national emissions in 1990.

Fast forward to 2012, and Australia now has legislation in place to limit greenhouse emissions and create an emissions trading scheme. One of the key ways in which it is envisaged that Australia will be able to meet its emission target of a 5% reduction from 2000 level emissions by 2020 and an 80% reduction by 2050 is to import carbon credits - up to 400 million tonnes per year, according to Treasury modelling (as can be seen in the following graph from updated Treasury modelling which shows (black line) projected net emissions to 2050 including overseas abatement).Chart 1: Australian emissions in the policy scenarios 

What is interesting about this so-called "overseas abatement" which Australia will be so dependent on to achieve future emission targets is that it is likely to include carbon credits created under the "Reduced Emissions from Deforestation and Degradation scheme" (REDD), which involves actually paying landholders in overseas locations not to clear vegetation. 

As Australia's Foreign Minister, Bob Carr may well be involved in international diplomatic efforts to encourage the adoption of the REDD scheme in order to generate the international carbon credits that Australia will be so dependent upon to reach future targets. 

Carr is likely to be required to publicly advocate for a policy that involves compensating overseas landholders for foregoing the opportunity to clear trees from their land and develop it for agriculture, so Australia can import the resulting carbon credits, despite steadfastly maintaining for the past decade and a half that there was absolutely no justification for compensating NSW landholders for losses associated with regulations that banned clearing of trees. 

In effect it will mean Australian taxpayers paying landholders overseas not to clear trees, while Australian landholders who have been forced by regulation to retain trees will not have the same opportunity - because the presence of existing regulations makes them ineligible!

The irony will not be lost on those landholders of NSW who are still struggling with the continuing mess associated with Native Vegetation laws in NSW, which are again subject to yet another review.

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