Citola Blog
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Global Climate Policy Progress in Durban COP Climate Conference
The 17th United Nations COP climate change conference has recently concluded in Durban, South Africa where more than 190 countries met for two weeks to negotiate policies to stop global warming by limiting global carbon emissions.
The result after two weeks extended negotiation is the "Durban Platform for Enhanced Action" which represents the first global agreement that commits all participating countries to reduce carbon emissions. As agreed, countries will work towards a legally binding agreement to cut carbon emissions in 2015 with the commitment actions to commence after 2020.
Martijn Wilder, Head of Global Climate Change Practice, Baker & McKenzie, said on ABC radio yesterday that the agreement “is the first time ever that you have all of the major emitters in the world agreeing to work together to put in place over the coming few years the framework for a binding global agreement.” Martijn continued, “it is the most significant development in that respect which we've had in terms of all countries in the world working together towards a binding agreement to reduce global emissions”
When asked how the conference will affect Australia’s carbon policies, Martijn responded:
“Australia is one of a number of countries to be introducing domestic policy on emissions trading. We already have all of the European countries with an emissions trading scheme. We have China going down that path, we have New Zealand with a scheme, we have the Californians.
So really I think the focus is for Australia the way in which we can take our current system and integrate that with other economies.
And as Minister Combet said there were good discussions in Durban around linking the Australian scheme with the European scheme.
And one only needed to be in Durban to see just how much action is going on at a global level in multiple countries on trying to address climate change.”
Of particular relevance to Citola is the (once again) progress on avoiding deforestation and the REDD framework which will be developed over the next few years as part of a new deal in collaboration with the Kyoto Protocol. An issue for REDD has always been the funding mechanism particulary through sovereign states and if REDD is to be funded through private capital then investors need price certainty through compliance markets. With the Californian markets coming online over the next 12 - 24 months, this should increase the price certainty (and demand) increasing REDD investment and development.
Durban Platform for Enhanced Action
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Price on Carbon Essential (OECD)
The Organisation for Economic Co-operation and Development (OECD) has released a report that says a price on carbon is essential to combating changing climatic conditions supporting the passing of the Clean Energy Legislative Package to put a price on carbon in Australia this month.
''A significant carbon price is needed to induce technological change," the report says and is timely as the international community prepares for the COP 17 climate conference in Durban, South Africa next week.
The report continues that carbon tax policies and emissions trading schemes would ''provide a dynamic incentive for innovation and private investment in low-carbon, climate-resilient infrastructure, plant and equipment.”
Some key findings highlighted in the report state that without more ambitious climate and carbon pricing policies, the atmospheric concentration of greenhouse gases would reach nearly 685 parts per million (ppm) by 2050. 685 ppm is significantly more than the 450 ppm scientists believe is needed for the world to maintain an average global temperature increase to 2 degrees. At 685 ppm, the global temperature will likely increase by 3 to 6 degrees by 2100 which would ''continue to alter precipitation patterns, melt glaciers, cause sea-level rise and intensify extreme weather events to unprecedented levels.''
''Delay is costly and could become unaffordable. The further we delay action, the costlier it will be to stay within 2 degrees… 450 ppm is still achievable, but the costs are rising every day, month and year that passes to compensate for the increased emissions,'' the report stated.
With putting a price on carbon becoming more important, China has confirmed it is establishing seven pilot carbon market schemes in cities that collectively have over 200 million people including Beijing, Tianjin, Chongqing, Shanghai and industrial regions including Shenzhen, Hubei and Guangdong.
A spokesman for Australian Minister for Climate Change and Energy Efficiency Greg Combet said the OECD report confirmed that ''putting a price on carbon is the most effective policy because it creates dynamic incentives for investment in cleaner technologies and infrastructure.”
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Carbon Price Legislation, Low-Carbon Economic Transition and Large Commercial Opportunities
Earlier this year at the invitation of the Australian Department of Climate Change and Energy Efficiency (DCCEE), Citola submitted a response about the design of the Carbon Farming Initiative (CFI): Citola’s submission can be seen here.
A key point that was conveyed to the DCCEE was that the realities of the paradigm shift required as the Australian economy transforms to a 'renewable' economy are clear and broad participation needs to be driven by compliance and voluntary demand. I.E. CFI initiatives to drive adoption must be driven by large and liquid environmental markets.
With the passing of the carbon price legislation in Australia this week, the government has taken a big step towards facilitating these ‘large and liquid’ environmental markets that will drive adoption, efficiency, technology transfer and incentivise sustainable land management.
What does this mean?
Fundamentally, from a carbon/environmental marketeer’s perspective it is creating a billion dollar market overnight and large commercial opportunities from the necessity that the community, business and investors transition towards a "lower-carbon" economy. The opportunities are greater when this reality is fundamental to your business model (like Citola) rather than having to be retrofitted to a legacy business model and operations.
With a price on carbon and a transition to a "lower-carbon" economy, it can be seen that the greatest commercial return going forward will be achieved by optimising for triple bottom-line outcomes (economic, environmental, social) and placing a value on natural capital (i.e. the dividend received from nature and the environment).
Why?
Because a price on carbon and other environmental-based market incentives DO place a value on natural capital and incentivise those who incorporate this into their business model and bottom-line. This view in the context of an economy not solely based on growth (i.e. an economy that considers other environmental, climatic, social contexts that do provide services/products previously not factored into business/economic decisions) aligns with the view of Pavan Sukhdev on three-dimensional capitalism. Pavan, the founder and CEO of GIST Advisory, has stated that human and natural capital are as important as financial capital but often ignored.
“I am often asked how I reconcile my capitalist background with my commitments to nature and the environment? I give my stock reply 'I don't reconcile them – I am a total capitalist'. And usually, the conversation ends there.” - Pavan Sukhdev
At Citola, we welcome the new markets that have been created by the passing of the Australian carbon price legislation and the strong demand it will create for domestic Australian Carbon Credit Units (ACCUs). The rewards will be greatest for those organisations who recognise the opportunities and have the expertise and ‘operational engine’ to execute. We look forward to it.
Read More & Make a CommentAccess Australian Carbon Credit Units
Citola provides client access to a long-term, fixed price provision of Australian Carbon Credit Units (ACCUs) eligible to meet liabilities under the Australia carbon price legislation.
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Carbon Price Legislation Passed Today: Tonight Citola Foresters at Landholder CFI Consultation
Today Australia put a price on carbon through the passing of the Clean Energy Legislative Package through the Australian Senate. Tonight Citola foresters have attended a landholder consultation session to discuss sustainable land management and opportunities part of the Carbon Farming Initiative.
“Landholders are very receptive to the consultative approach taken by Citola in developing relationships in local communities and working bottom-up to achieve real property outcomes,” said Citola Carbon Forestry Operations Manager Brendan Vollemaere from Victoria tonight. “Citola is developing a significant carbon forestry program as part of the Carbon Farming Initiative across the East-Coast of Australia and landholders are welcoming the opportunity to participate."
Citola Foresters Attending Landholder Consultation Session to talk about Carbon Farming Initiatve
This landholder consultation session follows previous sessions where Citola has conducted field days to explore the operational aspects of carbon forestry with landholders. Working bottom-up and supporting local communities is fundamental to what Citola and this has seen the recruitment of additional ‘operational foresters’ from Forestech in Gippsland, Victoria to join the team.
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Landowners: How it Works
Citola works with landholders and rural communities through a consultative process where project objectives are achieved through (1) stakeholder consultation, (2) operational implementation of project activities and (3) transparent communication of project outcomes.
Should a property be suitable and meet all criteria, Citola will seek to formalise an agreement with the Landholder and incorporate the property into the carbon forestry program.
Citola finances the establishment and management of the project and agrees with the landholder the responsibilities of both parties and any remuneration according to the project size and specific requirements on the project site. When a property and planting site is selected, Citola will pay all costs for the project establishment and management: The Landholder has no costs for the establishment and management of the project.
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Submit Expression of Interest
Landholders can register an Expression of Interest (EOI) by completing the EOI form and returning it to projects [at] citola.com. The EOI form provides to Citola the information required to assess the suitability of the property.
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Australia puts a Price on Carbon Creating Large Growth Opportunities for Citola
Australia has today put a price on carbon through the passing of the Clean Energy Legislative Package through the Australian Senate. The passing of the carbon price legislation provides legislative certainty for the market, investors and business.
“The passing of the carbon price legislation creates large new market opportunities for sustainable investment, clean energy and carbon forestry in Australia,” Angus MacNee, CEO of Citola Limited said. “It means that the 500 biggest polluters are required to pay for each tCO₂ they emit into atmosphere creating large opportunities for companies like Citola who provide products to assist organisations meet those liabilities.”
Citola provides organisations a long-term, fixed price provision of Australian Carbon Credit Units (ACCUs) to meet their liabilities under the carbon price legislation. Citola has unique expertise in the establishment, management and commercialisation of forest carbon assets with unique expertise (IP) in Forestry Ecosystem Asset Management.
The carbon price legislation is complemented by the Carbon Farming Initiative that provides the framework for Australian Carbon Credit Units (ACCUs) to be created from forestry assets and a market that Government climate adviser Ross Garnaut believes could be worth $2.25 billion per year.
UPDATE: From the Rural and Regional Australia Moves to a Clean Energy Future Press Release via THE HON GREG COMBET AM MP (Minister for Climate Change and Energy Efficiency), SENATOR THE HON JOE LUDWIG (Minister for Agriculture, Fisheries, Forestry) and THE HON. MARK DREYFUS QC MP (Cabinet Secretary, Parliamentary Secretary for Climate Change and Energy Efficiency).
The Government has opened the way for farmers and other land managers to earn new streams of income through the Carbon Farming Initiative and contribute to the transition to a low carbon future.
Credits generated under the Carbon Farming Initiative – also recognised for Australia’s international obligations under the Kyoto Protocol – will be able to be sold to companies liable under the carbon pricing mechanism.
This will include credits earned from activities such as reducing emissions from livestock and fertiliser, reforestation and savanna fire management. The Government has also allocated $250 million to provide incentives for other activities, including revegetation and soil carbon projects, through the purchase of non-Kyoto compliant Carbon Farming Initiative credits.
In total, around $1.7 billion will be invested in land sector measures over the next six years to support the Carbon Farming Initiative, maximise the benefits of storing carbon in our landscape, and reduce emissions.
Australian Carbon Price Legislation - How it Works
A price on carbon pollution creates incentives for businesses to reduce pollution and invest in clean technologies, clean energy generation and land-based activities such as forestry that reduce atmospheric carbon emissions. A market-based approach ensures that pollution is reduced at the lowest cost to the economy. Under the Australian carbon pricing mechanism passed today, approximately 500 of the country’s biggest emitters will be required to pay for each tonne of carbon dioxide they emit into the atmosphere. Modelling by the Australian Government shows that this will create economic incentives to reduce pollution in the cheapest possible way with the incentives to flow through the Australian economy triggering its transformation to a ‘clean energy future’.
The carbon pricing mechanism will commence on 1 July 2012 with a price that will be fixed for the first three years at AU$23 per tonne (rising at 2.5% per annum). On 1 July 2015, the carbon price will transition to a market mechanism (i.e. fully flexible price) under an emissions trading scheme, with the price determined by the market. There will be broad coverage from the commencement of the program encompassing approximately 60% of Australia’s emissions (360M tonne per annum) in the stationary energy sector, transport, industrial processes, non-legacy waste and fugitive emissions. There will be international linking to credible international carbon markets and emissions trading schemes (including the European Union Emissions Trading System – EU ETS) from the commencement of the flexible price period (i.e. 2015). At least 50% of a liable party’s carbon compliance obligation must be met through the use of domestic permits or Australian Carbon Credit Units (ACCUs).
Read More & Make a CommentAccess Australian Carbon Credit Units
Citola provides client access to a long-term, fixed price provision of Australian Carbon Credit Units (ACCUs) eligible to meet liabilities under the Australia carbon price legislation.
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Citola Parent Company Citola Group plc (UK) to become Citola Limited (Australia)
Citola Group plc shareholders have unanimously supported the resolution at the General Meeting held in London yesterday (3 November 2011) for the reorganisation of the company and the share exchange with Citola Limited in Australia. This effectively transitions the ‘parent’ company from a UK Public Limited Company, Citola Group plc, to an Australia Limited (Public) company, Citola Limited.
The reorganisation is a consequence of the positive market developments and continuing strength of the Australian economy, the passing of the Carbon Farming Initiative and reintroduction of carbon price legislation (to be voted upon by the Australian Senate on 8 November 2011) and the operational focus and capability of the Company in Australia.Australia is a relatively high-growth and low-inflation economy supported by robust political and economic institutions, and an internationally competitive business sector, and ranks as the 14th largest economy in the world (measured by GDP), and the 4th largest in the Asia Pacific region.
Solid trade and investment relations have helped see real economic growth on an average of 3.0% per annum over the last 5 years. Australia’s steady economic growth has also been aided by a resources boom that has seen its economy emerge as one of the largest global suppliers of raw materials. Most importantly Australia has a well-developed, innovative and highly respected and dependable financial services industry and capital market.
In Australia, Citola provides clients access to a low-cost, long-term provision of Australian Carbon Credit Units (ACCUs) to meet their carbon compliance obligations under the carbon price mechanism through the Carbon Farming Initiative.
The Carbon Farming Initiative is a program that provides a strong incentive for investment in forestry carbon offsets and when coupled with the carbon price legislation, Government climate adviser Ross Garnaut has stated that the market could be worth $2.25 billion per year.
Read More & Make a CommentAccess Australian Carbon Credit Units
Citola provides client access to a long-term, fixed price provision of carbon offsets (Australian Carbon Credit Units - ACCUs) eligible in the Australian Carbon Farming Initiative (CFI) and carbon price legislation.
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Australia Carbon Price Legislation Senate Vote Next Tuesday (8 November 2011)
The Australian Senate is expected to hold the final vote on the carbon price legislation, the Clean Energy Legislative Package, next Tuesday 8 November 2011 - two days earlier than originally expected.
"For the first time, Australia will have a price on carbon and a comprehensive plan to reduce pollution and invest in the clean energy technologies of the future," Government Senate leader Chris Evans said in a statement.
Leader of Government Business in the Senate, Senator Joe Ludwig, reiterated that "the Government is committed to delivering the Clean Energy Package and passing other important legislation before Christmas.''
The passing of the Clean Energy Legislative Package will make the carbon price mechanism (i.e. carbon tax) law with a commencement date of 1 July 2012. The carbon pricing mechanism will commence with a fixed-price period for the first three years at AU$23 per tonne (rising at 2.5% per annum) and transition to a market mechanism (i.e. fully flexible price) under an emissions trading scheme from 1 July 2015. In the flexible price scenario, at least 50% of a liable party’s carbon compliance obligation must be met through the use of domestic permits or Australian Carbon Credit Units (ACCUs).
Read More & Make a CommentAccess Australian Carbon Credit Units
Citola provides client access to a long-term, fixed price provision of carbon offsets (Australian Carbon Credit Units - ACCUs) eligible in the Australian Carbon Farming Initiative (CFI) and carbon price legislation.
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Citola Careers and Forestry Recruiting in Local Communities
Citola originates and manages forestry assets to produce sustainable forestry products and environmental-based commodities (i.e. carbon offsets).
Citola is pioneering a unique program to produce Australian Carbon Credits Units (ACCUs) as part of the Carbon Farming Initiative (CFI).
As part of Citola's Carbon Farming Initiative program, Citola is working with Forestech in Gippsland, Victoria through the recruitment of additional ‘operational foresters’ to join the team.
Bruce Macpherson, Course Coordinator of Conservation and Land Management at Forestech has stated:
"Forestech, a division of East Gippsland TAFE are pleased to be the provider of training in Conservation and Land Management to certificate 4 trainees with Citola Resources. This is a great opportunity for the trainees and other Forestech students to become involved in a biodiversity restoration industry project which is contributing to carbon capture and storage in East Gippsland."
"We embrace this opportunity to work in partnership with Citola, to deliver customised training in a practical and field-based environment. The involvement in this project will enable the trainees to complete a qualification whilst gaining experience in this innovative approach to sustainable land management."
We are always looking for talented people to join the team and are currently recruiting for the following roles in Sydney, Australia.
Project (Forestry) Operations Manager
Citola is looking for an experienced Project (Forestry) Operations Manager to join the executive management team and assist in managing the delivery and day-to-day operations of implementing Citola reforestation projects for the Australian Carbon Farming Initiative.
Forest Carbon Specialist
Citola is looking for a Forest Carbon Specialist to join the team and assist in the technical development of Citola’s carbon and environmental products and programs including reforestation, biodiversity and REDD.
If you are interested please write to us @ careers [at] citola.com explaining why you would like to work @citola and your interests/skills enclosing your resume and current location (please quote reference "WEB"). All applications are treated in the strictest of confidence.
See Citola Careers for more information.
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Citola Carbon Forestry Modelling In Australia
Carbon modelling is an important aspect of carbon forestry project design. It enables the design of financial models to drive project investment and, combined with intensive on-ground monitoring and verification, ensures the robustness of the carbon offset product and the environmental integrity of the project through permanence, additionality and compliance.
In the early days Australia had a carbon-modeling tool called the National Carbon Accounting toolbox or NCAT. This was considered to be amongst the best national carbon accounting tools available. Citola was very proficient with the application of this tool and it stayed the baseline-modeling tool up until 2011 and the introduction of the “Carbon Farming Initiative Carbon Modeling Tools” or CMT.
What Citola (like many) found with NCAT, however, was that when using “Mixed Species - Environmental Planting” methodology data, there could be significant variations in the modeled versus actual carbon yield data. This required the need to develop in-house carbon modelling tools and systems to more accurately model carbon/forestry growth to reflect what was actually occurring on the ground at project sites.
Through this process, Citola conducted ground measuring of project sites to compare actual carbon yields with modeled carbon yields and devised a 9-tier stratum system based on Low, Medium and High yielding areas further refined to Default, Standard and 80/20 management models based on the project inputs and actual outcomes achieved. This has enabled Citola to verify model accuracy and provide robust carbon yield growth projections.
With the implementation of the CMT (which is effectively an improved upgrade of the NCAT), the Australian Department of Climate Change and Energy Efficiency (DCCEE) has been able to improve the default carbon modeling information through more extensive project site and landscape model data. Citola has and will contribute to the compilation of this data through current carbon and forestry measurement field work being conducted throughout Victoria, Australia and over the next four (4) years.
Citola Field Forester's performing Carbon and Vegetation Assessment
Citola Carbon Forestry Operations Manger Brendan Vollemaere has conducted full comparisons between NCAT, actual carbon yields and CMT. The results are significant and show up to a 200% improvement in modeled versus the actual carbon yield in project plantations.
Since the release of the CMT, the Australian Federal Government has been upgrading and refining the data used in the carbon model tools which is another positive development to provide accuracy and consistency across the industry.
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Investment Groups Welcome Australia's Carbon Price Scheme as Beneficial for Investors
A joint statement from 285 investors including the world's four major green investment groups representing AU $20 trillion in funds under management, has welcomed Australia's carbon price mechanism as a significant opportunitiy for investors. This supports the Australian government's claim that the carbon price legislation will deliver significant long-term economic benefits for the nation.
Dr Wolfgang Engshuber, chair of the Principles of Responsible Investment (PRI) advisory council of which Citola is a member, has stated that “climate change will transform economies throughout the world, creating new opportunities for investors.” Dr Engshuber continued that “… [the opportunities] will gain traction only if governments play their part in laying down well-designed and effective climate change policies. Without such a supportive regulatory environment, we will not see the level of investment that is needed to transform the world’s energy supplies and transport systems.”
Nathan Fabian, Chief Executive of the Investor Group on Climate Change, represents one of the four groups that commissioned the report with the other investor groups including Europe's Institutional Investors Group on Climate Change, US-based Investor Network on Climate Risk and the United Nations Environment Programme Finance Initiative.
''International investors believe Australia's policy framework is one of the best in the world for investment certainty. Experience shows that when good policies are rolled back, confidence of investors is undermined for several years,” Nathan Fabian said. ''Investors believe that carbon pricing is the only real, long-term policy solution for Australia.''
The investment groups advocate in their statement a series of policy initiatives that they want governments to act upon including financial incentives to shift the risk reward balance in favour of low-carbon assets and a robust international carbon market driven by a binding international carbon reduction agreement that includes all major carbon emitters.
Australia’s carbon pricing mechanism will be linked to international carbon markets from the start of the flexible price period on 1 July 2015.
Of particular relevance to Citola is the desire by the investment groups to accelerate the progress of carbon finance mechanisms such as REDD (Reduced Emissions from Deforestation and Degradation) that reduce the emissions from deforestation and forest degradation.
REDD involves the conservation of rainforest by a attributing value (such as carbon sinks i.e. carbon offsets) to the natural capital (i.e. the dividend society receives) of complex forestry ecosystems. REDD is a highly scalable and low-cost source of carbon offsets for international carbon markets where deforestation makes up 20% of global carbon emissions and 13 million hectares of rainforest are lost annually.
The Australian Carbon Price Legislation is expected to pass the Australian Senate in Novmber 2011.
Read More & Make a CommentAccess Australian Carbon Credit Units
Citola provides client access to a long-term, fixed price provision of carbon offsets (Australian Carbon Credit Units - ACCUs) eligible in the Australian Carbon Farming Initiative (CFI) and carbon price legislation.
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