The machinations of Europe’s carbon permit market would initially appear to have very little to do with the northern quoll, the smallest but most aggressive member of the quoll family that has vanished from vast tracts of Queensland and the Northern Territory.
But should the federal government bring forward a floating carbon price, linked to the cheaper European market, there are likely to be a number of knock-on impacts upon Australia’s endangered species, farmland and national parks.
The government wants an early introduction of the market-based carbon price next year, with the link to cheap European permits set to shrink the price of Australian emissions from a fixed $25 a tonne to around $6 a tonne.
With the government set to look for more than $3 billion in budget savings to offset reduced income from the carbon price, the $946 million Biodiversity Fund will come under scrutiny.
Launched as part of the carbon price package last year, the fund has already committed $271 million to conservation projects that will rehabilitate more than 18 million hectares over the next six years.
The fund has provided money to combat what the government calls a “catastrophic” decline in small mammals, such as the northern quoll and a dozen other marsupials, in northern Australia due to altered fire regimes, feral cats and habitat loss.
Other projects include the protection of wetlands in Victoria, the creation of “wildlife corridors” in NSW and nearly $4 million for Indigenous landholders in Queensland to tackle rampant feral pigs and weeds.
“Australia’s biodiversity is in decline already, exacerbated by climate change. If we want clean water and the beautiful places we care about, now is not the time to reduce nature conservation programs,” said Dr Paul Sinclair, of the Australian Conservation Foundation.
“The Biodiversity Fund has injected much-needed money to support regional communities and businesses manage the interaction between wildlife, vegetation and people. There are exciting projects across Australia that are linking up fragmented habitats, so we can’t cut them off at the knees.”
“We are seeing koala populations suffer in the south east of the country, birds threatened due to loss of wetlands and an extinction crisis of mammals in the Northern Territory. Nature is Australia’s life support system and we’re not investing in it.”
A carbon price of $6 a tonne would also effectively kill off the government’s Carbon Farming Initiative, which allows farmers and land owners to earn carbon credits to sell onto major emitters by storing carbon or reducing emissions on their land.
Mick Keogh, executive director of the Australian Farm Institute, said a lower carbon price would provide a “double-edged sword” for farmers.
“From one perspective there are intensive energy users such as prawn farmers, livestock farmers and dairy farmers,” he said. “If the carbon price went down to $6, that would bring them benefit from reduced costs.
“But polluters will look for the cheapest way to offset their emissions and that will be from buying European permits or $6 ones here. That will have a dramatic impact here. Most carbon farming just won’t be viable.”
While brown coal generators would benefit from a lower carbon price on top of industry assistance payments, renewable energy could suffer.
Hydro Tasmania, Australia’s largest renewable energy generator, is facing a potential $30 million revenue shortfall. Currently, the company is able to sell energy back into the national grid cheaper than coal-fired generators, giving it a competitive edge.
“Hydro Tasmania is supportive of a well-designed emissions trading scheme,” said acting CEO Stephen Davy. “However, the move to a floating price a year earlier will clearly have a negative effect on our revenue for that year.”
A spokesman from the Department of Innovation, Industry, Science and Research said: “We won’t be making a comment on the ramifications of this until an actual policy is announced.”
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