07 March, 2008

THE AGE: Deal struck with PNG on carbon trading

Chris Hammer, Port Moresby
The Age, March 7, 2008

Australia and Papua New Guinea have laid the groundwork for carbon trading between the two neighbours, even before either country has developed a domestic emissions trading scheme.

Prime Minister Kevin Rudd signed the Papua New Guinea-Australia Forest Carbon Partnership with his counterpart Sir Michael Somare in Port Moresby yesterday.

The partnership aims to help save PNG rainforests by enabling the sale of carbon credits through future national, regional and global emissions trading schemes.

After signing the partnership, Mr Rudd said it would encourage PNG to "do its bit for the world" by avoiding deforestation.

"It's far better we start heading in that direction together rather than heading in different directions," he said.

The two countries will consult each other on greenhouse strategies and Australia will help PNG measure and monitor the carbon locked away in its forests. They will also help each other enter international trading schemes.

Australia will provide its neighbour with technical assistance such as satellite monitoring. The deal holds out the possibility that other countries will join the partnership.

"I think Australia, ourselves and Indonesia are like a triangle on this particular issue of carbon emissions and in relation to forests," Sir Michael said.

Australia's principal adviser on greenhouse emissions, Ross Garnaut, has called for Australia to enter a regional carbon trading agreement with its two northern neighbours. Professor Garnaut has suggested Australia could make radical but relatively painless cuts to its emissions by giving domestic polluters such as electricity generators the ability to buy off-setting carbon credits from forestry projects in neighbouring countries.

This would work in much the same way that stopping domestic land clearing has helped Australia stay on track to meet its Kyoto targets.

It would have the advantage of giving PNG land holders an alternative source of income to logging.

PNG has one of the world's four great rainforests, covering an estimated 29 million hectares.

Mr Rudd also unveiled a blueprint for relations between Australia and Pacific Island countries. The Port Moresby Declaration promising increased aid and practical co-operation from Australia.

While largely lacking in concrete measures, the declaration was warmly welcomed by Sir Michael, who had a sometimes strained relationship with the Howard government. "The relationship was more or less deteriorated for a while," Sir Michael told journalists. "That's all water under the bridge. We are talking of a new beginning."

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