Monday, 1 July 2013

Need for carbon caution confirmed.

by Mick Keogh
This article was first published at Ag Forum and cross posted under Australian Farm Institute copyright conditions 

 Henbury Station, site of RM Williams Agricultural Holdings controversial carbon project
Image sourced from Beef Central

Developments over the past week have confirmed the need for farmers to approach the carbon market with caution, and to ensure they have a full legal understanding of the implications of any contracts they enter into. This is particularly the case at the present time, when there is active discussion occurring on both sides of politics about potential future changes to carbon policy post-election.

Over the past few years, there has been quite a lot of commentary about the potential implications of carbon markets for Australian farmers. Initial Treasury modelling downplayed potential negative cost impacts for agriculture, although modelling by both ABARES and the Australian Farm Institute highlighted that, particularly in the short-term, negative impacts were likely to be quite significant for some sub-sectors of agriculture, especially given the absence of similar policies for competitor agricultural exporting nations.

The 'flip side' to the additional costs associated with carbon policy is the Carbon Farming Initiative, a legislative framework which provides the opportunity for farmers to adopt approved project methodologies and 'sell' the resulting carbon credits to major emitters. Some suggested this was going to provide a major opportunity for landholders, but the two main areas of risk - trading rules and carbon price - need to be carefully considered in any project.

Announcements over the past week that R M Williams Agricultural Holdings (RMWAH) - owners of the much-discussed Henbury Station carbon farming project - have gone into administration should serve as a caution to any landholders contemplating undertaking a carbon project, although reports have not yet clarified whether it was the carbon part of the operation that has caused the problems.

This blog has commented extensively on the Henbury project (see here, here, here and here), as the involvement of Australian Government funding (a reported $9 million), the inclusion of Henbury in the national conservation estate, and the absence of any obvious potential for the generation of carbon offsets that could be sold in the official carbon market made it very difficult to understand exactly how the project could generate revenue. There has been extensive reporting about the difficulties the business has encountered (see here, here and here), and no doubt the real reasons for the problems will emerge over time.

The fact that the Henbury project seems to have encountered difficulties should serve as a caution to landholders contemplating getting involved in a carbon project.




  1. Letter to the Editor
    by Viv Forbes

    Carbon Credit Farming is Unsustainable

    The carbon farming caper is supported by all political parties. Under it, landowners can sell “carbon credits” if they can prove that they have reduced carbon dioxide by capturing it as humus in soil, or by planting forests, or by allowing re-growth of woody weeds, or by reducing feral animal emissions (shooting camels) or even by promising solemnly to NOT clear specified parcels of forest.

    NONE of these processes are sustainable in the long run.

    There is a limit to the amount of humus or trees that can be based on one hectare of top-soil.

    And once all feral animals have been shot there are no more carbon credits to be earned there (unless the landowner is also breeding them secretly in the back paddock).

    And even in the corrupt carbon market for hot air, only one payment can be legally claimed for promising to NOT clear a parcel of land (and one bushfire will reverse all that in one afternoon).

    The whole concept is unsustainable, it encourages corruption, and most of the benefits will go to the big B’s - Bureaucracies, Bankers and Brokers.

    African farmers are saying “No” to land-grabbing carbon credit speculators.

    Australia should do the same.

    Viv Forbes,

    For those interested to read more:

    Carbon Credit Land grab in Uganda:

    Africans to UN: “We don't want your carbon farming.” See here:

    1. Mr Forbes says: "The carbon farming caper is supported by all political parties."
      This is not true. The NO CARBON TAX Climate Sceptics Party is against any impost on the Australian taxpayer brought about by the falsified man-made global warming hypothesis .

  2. If you followed all the links in the article above you will see that Mick Keogh has written quiet extensively about Hensbury Station.
    Another person who has also followed the Hensbury experiment closely is Fiona Lake and I would like to encourage you to read her take on this situation in her article RMWAH in receivership - failure of the Henbury Cattle Station project

    "Taxpayers forked out millions of dollars for a scheme that not only wasn't sorted out in detail prior to the money being handed over, it wasn't sorted out in the following years, either!
    It just looks like a massive speculative project, to be figured out as time went by, with investor fashions such as "carbon sequestration" (relating to carbon trading) and "biofuels" featuring on the website.....without clear facts and figures explaining how any of would actually work. Let alone a budget!"


Welcome to a place that has a focus (but not exclusively) on regional and rural Australia open for anyone living anywhere to read, learn and interact. Please feel free to make a comment.

You can use some HTML codes such as, a for active; b for bold; i for italics

Active code - substitute a for @
<@ href="web address">linked words

[Click Here] for a link to another site where there is a very good simple explanation.