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EU and NZ views on emissions trading

- Wednesday, May 20, 2009

There have been some significant developments in the discussions of our international neighbours regarding climate change policies and agriculture in the last week. In particular, comments emerging from New Zealand and the European Union are of importance to Australian agriculture.

This is an extract of a speech given by Dr Nick Smith, New Zealand Minister for Climate Change Issues, on the issue of harmonization between New Zealand’s Emissions Trading Scheme and that proposed in Australia:

The New Zealand Government sees four significant advantages in harmonisation.

First, we recognise that climate change is a global issue. Success is only possible by countries working together. Australia is our nearest neighbour in which political, social and economic links run deep. If we two close cousins of the global community can’t show that we can work together on this, we really are in trouble.

Secondly, harmonisation of carbon trading schemes, just as with the advantages of trade, benefits both countries by ensuring the lowest cost possible mitigation measures.

Thirdly, harmonisation reduces the compliance costs. There will be considerable public and private expense in measuring, reporting and ensuring compliance with emissions trading regimes, and these can best be minimised by a common approach.

Finally, harmonisation reduces the Trans-Tasman competitiveness issues. We do not want investment decisions being made on either side of the Tasman on the basis of who has the softest climate change policies.

Recent decisions by the Australian Government to make changes to the timing and implementation of its Carbon Pollution Reduction Scheme has not changed the New Zealand view that there is potential for harmonisation.

To the European Union, Mariann Fischer Boel, Member of the European Commission - Responsible for Agriculture and Rural development; has delivered a strong message in relation to soil carbon. Speaking at a seminar organised by the International Food and Agricultural Trade Policy Council on 11 May in Salzburg; Ms Fischer Boel stated 'managing carbon in soil accounts for about 90 per cent of the contribution that agriculture could make to mitigating climate change'.

No clear position was taken in policy terms and whether new accounting rules for LULUCF creating incentives for carbon-conscious soil management in agriculture should be compulsory in a new international climate change agreement. However there was an obvious endorsement of 'climate-friendly farming'.

Summarised, the key points from Ms Fischer Boel were:

- First, within the EU, the CAP will remain a powerful tool. Beyond 2013, it will probably still need to provide a market-friendly safety net for farmers, to help safeguard food security. It must also make a strong contribution to our efforts to put the brakes on climate change and adapt to it.
- Secondly - on a global level - we must invest in climate-friendly productivity increases.
- Thirdly, we must set the right multilateral framework for global trade.

Despite the lack of specifics in these comments, there is a clear indication that the EU is strongly considering the role of soil carbon in climate change mitigation, and considers the CAP an important tool by which to encourage this.

How do you think the treatment of agriculture in Australia compares? 

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