Below are the original briefings sent out in relation to the brewing coal credit scandal.
In a nutshell, ACM0013 under the Clean Development Mechanism is being used, or abused, to generate huge numbers of carbon credits for plants that are basing their change in emissions on historical data that many analysts have a big problem with, and that are being issued for plants that would have existed anyway.
This raises serious, indeed fundamental issues about additionality, credibility of the CDM going forward and about the future of the carbon market.
A massive coal-based project in India is now earning carbon credits
in the hundreds of thousands a year, the exact opposite outcome of
our carbon tax
from the same basic facts.
What is significant in this is that local coal producers and users
such as energy plants are being smashed by the carbon tax, which is
(allegedly) on UN guidelines, the IPCC and the Clean Development
Mechanism Kyoto Protocols.
So how can the same "rules" credit coal plants in India and lead to
our coal plants being taxed to hell and gone?
That clearly means there is a misapplication of the rules, and a
fatally serious one, either in India, or here.
If it's in India, the whole credit system at the UN is called into
question. If that's the case, our own carbon tax is following a
and has to stop immediately.
If the problem is here, we must immediately adopt changes to the
proposed carbon law (or better yet kill it, but...) so as to
reflect the same
rulings here as India enjoys. In the process, that would, through
carbon accounting, greatly reduce our carbon footprint, at the
stroke of a pen,
rather than through merciless economic warfare on our engine room
There is a very VERY lively insider discussion on this in the
carbon trade industry right now. Ugly arguments over carbon
accounting and carbon
auditing, the principle of additionality and just exactly what we
wouldn't want if the ETS type approach is to work.
What is particularly serious about this situation is that the DCCEE
should have been all over this issue like a cheap suit. To the best
of my knowledge no one from junior time server up to the minister
even has the faintest clue this situation has occurred. I did try
and tell them a year ago but they are yet to reply to that email.
If the Gillard gang do what the do best - nothing - we will be in a
situation where our own government is penalising our coal industry,
AND forcing them to buy credits after a few years of soaking them
with a tax... At the exact same time as India not only does not
have a penalty tax (their carbon tax on coal is a pittance), but
they are now allowed to earn credits from coal. Coal is the most
abdundantly used industrial fuel source in India and its region.
This means they will now be paid by the UN carbon trade to use
coal, be allowed to trade in credits freely, escape any of their
own taxation, and see our own coal industry become totally and
completely irrevocably non competitive.
This carbon tax has scaled the dizzying heights of lunacy in less
than a week, and I say that as a carbon trader. This is just nuts.
I am back in Australia as of Saturday, and am making myself
available at once to brief any or all of you or any coal industry
personnel who need to understand this. This has got no press but it
is a big deal. It empowers India (and China) to triple dip on their
coal use whilst the bozo gillard government destroys Australia's
Politically I also hope this can be used to devastating effect
during La Gillard's "Endless Bummer" walking tour of Australia. I
know the situation described is somewhat technical but it comes
down to this:
Why are we taxing coal into oblivion under the same system that is
rewarding India for using coal?
We will end up buying credits for our coal from India's coal. Huh?
China will follow India in this.
China will then be exploiting our down spiral economy by buying
coal cheap, earning credits on that coal in China, then selling the
credits back to us. HUH?
The DCCEE is ASLEEP! And that's probably good because when they're
awake- something in our economy dies.
I'm glad the Indian coal credit saga is attracting some heat now,
it certainly should. There is more news:
Despite the advisory review board aka the Methodology Panel for
Clean Development Mechanism projects rejecting the Indian coal
credit project and refusing to approve the issuing of credits, the
UN Executive Board for CDMs which has the final say has "on appeal"
approved the super coal project.
The Executive Board has overruled the methodology panel decision to
disallow the credits from the coal energy plant in India.
That makes it official and binding on all such carbon credit
projects that credits can indeed be earned in such a way.
That in turn means Australia's carbon tax is totally wrongly based.
It further means that the lack of any appropriate legislation (the
CFI is a joke) to allow our own coal producers and users to earn
credits, given that the UN says it's OK, is a fatal error in the
existing carbon tax proposal, and that everything I initially noted
in my briefing is correct - we will see our coal struck from three
sides at once whilst Indians pave the way for the Chinese to sell
us credits to buy our coal with.
China has 116 projects planned identical in effect to the Indian
After close review and discussion with the project designer
responsible as well as one of the project managers I can also state
that the Indian coal credits are not based on new technology or any
sort of new patented invention. It is simply a change in behaviour
and efficiencies at the plant that have allegdly reduced
(proportional) emissions. This change in behaviour is actually in
part an imitation of Australia's world leading efficiencies at our
own coal burning plants. In other words, this is specifically and
literally a situation where the same facts produce carbon credits
in India - and a massive new tax in Australia. Our coal energy
producers will be buying credits from their brother plants overseas
to cancel out the "negative effect" of the SAME BEHAVIOUR.
The carbon tax is a tariff on coal that not only no one else pays,
but it is coming in as overseas coal plants are directly
benefitting from trading in carbon credits just from running their
Meanwhile the DCCEE is still averaging four months to make a decent
reply to the simplest technical inquiry, with some inquiries
basically just being ignored full stop.
Incompetence is a mild word for this level of boondoggle.
I've already received expressions of interest from India, Pakistan,
Bangladesh, Ghana, Congo (DR) and Fiji regarding credit trading in
Australia- not exactly a platinum-edged set of countries, no
disrespect to them intended. It is clear that the general
perception about Australia's carbon tax is that we don't know what
we're doing, we're ripe for the picking, and we're far too
incoherent to be any sort of credible threat in the marketplace.
Meanwhile technological businesses in Australia which should be
able to be stakeholders in real emissions reduction projects are
going broke at the rate of two a week because the uncertainty is
killing genuine investment, a point noted by Credite Suisse and
Banco Vaticano in my recent talks with them. It's also just common
The carbon tax is attracting all the wrong kinds of people into our
nascent carbon market at the same time that it is destroying our
energy efficiency, energy production competitiveness and therefore
our standard of living and natural regulatory downward pressure of
prices. We will now see all sorts of unfortunate economic side
effects from Gillard's frankenstein monster of a tax.
Brown's 10bn Clean Energy quango excludes Carbon Capture and
Storage, which also strikes at coal, at the same time it and the
carbon tax attack on diesel is destroying our algal fuel industry
before it starts.
Gillard has unleashed a perfect storm of counter-intuitive
proposals, at a time when she had hundreds of highly qualified
people of all professions who could have given her strong advice.
To my certain knowledge she didn't consult with any of them,
preferring to take climate science advice from an economist, and
economic advice from a paleontologist. Brilliant really. Something
the likes of the rest of us would never have thought of. Presumably
when she feels ill she nips down the fish and chip shop for a bit
of medical advice.
If the carbon tax goes through as currently described, the
ludicrous CFI legislation must be replaced with robust detailed
legislation to equip all industries and sectors with the ability to
directly earn credits from emissions reduction behaviour in line
with the current UN decisions. The UN authority is the only
authority the Gillard regime is citing for its own carbon tax.
Shouldn't they therefore be following its lead regarding coal?
Or is this just about attacking sectors that don't vote ALP or dare
to criticise Madame Guillotine herself?
Next time: earning carbon credits for teaching villagers how to
recycle. No seriously. No emissions reductions in sight, just run
a school and get carbon credits. Proof positive of the wealth
redistribution agenda worldwide associated with the non-ETS carbon
credit tax and spend plan.