The Great Carbon Con!

All on the basis of bogus "science".

I'd love to know how Ben Keogh does his calculations, if farmers are getting $2.90 per tonne after the CMAs take their share then without the CMAs they'd be getting $5.80/t and if the brokers are selling it for $30/t where does the extra $24.20/t go to? A "con"? Well yes maybe, but it doesn't look like the CMA's are the ones doing it. I've looked at a number of schemes over the years and the advice I give is do you research and calculations thoroughly a lot of schemes are nowhere near as good as they market themselves.

Dear Spottedquoll, The calcualtions are based on what the CMA is paying for revegetation in return for the carbon rights. The agreements have no mention of cosats or liabilities, access requirements or transaction costs, etc. Brokers usally get 5 to 10c per credit. The extra money would go to the sellers of the carbon or the owners of the Carbon rights, in this case the CMAs. If you read the article what I am urging landholders to do is to ensure they have done their homework and ensure they know what they are signing up for. What I object to is the CMAs tying carbon rights to PVP and reveg activities without fully recognising the input of landholders and operating by stealth. I agree entirely that there are a lot of schemes out there that are nowhere near as good as they seem and this is another one.

Thanks for that Ben, So what you're saying is the CMAs are paying $2.90 per tonne for their (potential) share of the carbon up front and the landholder still has 275 tonnes to sell on the open market? So over time the landholder could still get $9000/Ha (from his sales plus the CMA "pre-purchase")? And this is only one particular case I'm aware of CMA payments for some revegetation projects going far higher than $800/Ha. The other point is is should taxpayers money be used to finance (or part finance) a crop (which essentially it will be) and taxpayers not get any return for it?

Dear spotted quoll, The CMAs are paying 800/ha for revegetation for biodiversity and environmental outcomes and taking 50 to 100% of the carbon rights. Under the proposed treatments of forest sinks in the ETS, any loss or harvesting of the trees will be treated as an emission and the landholder (or the CMA) will need to pay back the losses. Unlike a crop where you get paid on harvest under this scenario you will be charged to harvest. It should be up to the landholder if they want to get into carbon trading not have the decision made for them by another body.

I am objecting to a) the price being paid; b) the carbon rights being linked to funding that was provided for environmental outcomes; c) the lack of information provided by the CMAs in regard to liabilities, incomes and other options; d) the CMAs restricting the ability of the private industry to operate by engaging in carbon trading; e) the CMAs and other government agencies undermining the private sector by using data, information and other resources to engage in carbon trading and restricting the access to this information from other users; d) the surreptitious methods of the CMAS to get at the carbon; and finally e) the linking of the carbon rights to PVPs and the way the CMAs have told me directly that if the client does not sign the carbon over under the PVP they will not get the PVP.

The taxpayers do get a return for the activity in better water quality and environmental outcomes (which is what the money was meant to be for in the first place), furthermore whether the landholder or the CMA opt the plantation into the ETS or not the Australian Taxpayer will still benefit as the increase in the national forest extent will be reflected in our national carbon accounts that will reduce our obligations under the Kyoto Protocol, thus saving the federal government (taxpayer) money. I urge you to take the argument you have made to the landholders of Australia and see if they think it is fair to get 9,000 dollars for something worth far more, so what if they get some money for revegetating their land, they take on the work and under the ETS the liability, why should the government funded and landholder funded CMA get such any return at all for something they are obliged to do anyway.

You talk of it as a crop, what happens when Agriculture is covered are the CMAs going to say OK if you plant develop your land for a new crop and it sequesters carbon we will only give you approval for said development if we get half your carbon rights for a pittance. I can give other examples where the CMA has stolen 100% of the carbon rights even though the landholder put in 25% of the project cost. The final design of the ETS is not even out yet and the CMAs have shown their greed and naivety in this matter, this was plain and simple opportunism. I have spoken to a number of the CMAs involved and the project managers of the concept and the best I could get out of them is that the reason for this action was that they see it a s a bonus for the CMA. No consideration of the landholder with whom they are meant to work to better the environment. The intricacies of the carbon sequestration market are too involved to explain in detail in this forum but I have enough experience and understanding to feel that it was necessary to speak out on this issue in the interest of landholders everywhere.

A final note is that I met with the chairs of the CMAs to present an off the shelf product from a not for profit federal government backed organisation for carbon trading and sequestration management that involved CMAs and paid them a fee for service. The CMAs informed me that they were not interested as they believed they could make more money doing it themselves. The Victorian CMAs have investigated the issue and are not pursuing the go it alone approach but are looking for other methods and concentrating on core business. There are also a number of CMAs in NSW who are not involved and have chosen a different path. Whilst I feel for the CMAs and their difficulty in getting funding, there is no need to gouge farmers an use their position of authority and regulation to force unfair deals on landholders. If you wish to discuss this in more detail please contact me outside of this forum.

Ben Keogh Managing Director Australian Carbon Traders