The abolition of the carbon tax has damaged an innovative scheme by Kimberley Aboriginal people to earn money through fire abatement. 

Fire abatement was worth millions of dollars to traditional owners, but Kimberley Land Council’s Land and Sea Manager, Ariadne Gorring, told the University of Melbourne’s Carlton Connect conference this month the market had collapsed.

Kimberley Aboriginal people started selling carbon credits four years ago, using smaller, cooler burns to prevent destructive late-season wildfires, which generate as much as 3% of the nation’s total annual greenhouse gas emissions.

In the 2014 fire season alone, more than 60 traditional owners were employed in North Kimberley Fire Abatement Project during the 40-day burning period over an area of 35000 square kilometres of remote country.

But Gorring says with the abolition of a price on carbon, the business is no longer viable.

“It costs a lot to do the work, to do the early season burning and the fire operations and have the amount of people involved to do the fine scale burning that’s required,” she said.

“Without a price, without a tax on carbon and companies having to pay for offsets, it means the market’s effectively been lost.”

The carbon farming projects undertaken on native title land generated carbon credits which could then be sold to emitters to offset greenhouse gas emissions. But with the scrapping of the price on carbon, companies no longer need to buy credits unless they are running voluntary offset schemes.

Gorring says the amount earned so far from carbon credits is commercial in confidence, but the scheme has provided social and cultural benefits. Now, she says, there are only two options: to bid into the proposed “reverse auctions”, in which carbon credits are bought from the cheapest supplier, or to sell into the voluntary market. But both would mean much cheaper prices for carbon, meaning the work would not be economically viable.

The “reverse auctions” bidding is part of the new Emissions Reduction Fund (ERF), the centrepiece of the government’s “Direct Action” plan. The fund will provide $1.5 billion to companies whose carbon projects can promise the biggest cuts in greenhouse gas emissions for the least amount of money.

A spokesperson for Environment Minister Greg Hunt told Crikey that existing Carbon Farming Initiative projects were “well placed to bid for funding under the Emissions Reductions Fund”.

“There are significant opportunities for landholders, including indigenous communities on the land, to continue and engage in carbon abatement projects under the CFI so long as they provide the lowest-cost abatement options,” he said.

But Gorring says the CFI makes no allowances for the higher cost of land sector projects and that Aboriginal carbon projects are unlikely to be able to compete with those of the big polluters.

The abatement cost of the North Kimberley Farming Abatement Project is between $22-$28 per tonne, which covers the operations include employment, training, co-ordination, communication and community engagement. Gorring says the cost could be reduced, but this would mean a decrease in other benefits that abatement farming has brought to Aboriginal communities.

Hunt has made public comments suggesting “a ballpark of $8 per tonne, but this is not set in stone”. Industry sources speaking to Crikey off the record indicated such a low effective carbon price would make fire abatement projects more difficult but predicted that the “reverse auctions” would be determined on a “case-by-case” basis.

Associate Professor Peter Christoff, climate politics and policy researcher and teacher for the Department of Resource Management and Geography at the University of Melbourne, says without a domestic carbon price the options for indigenous carbon farming projects are limited. While it could be feasible to sell credits on the international market, the administration required to measure, verify and report credits would be a burden on communities that don’t have the capacity to do so.

“The loss of actual and potential income for indigenous communities is very unfortunate indeed, as carbon farming looked like a sound way of establishing an enduring and ecologically sustainable economic input for remote and semi-remote Aboriginal communities, especially in the north,” he said.

Gorring says she hopes that in the voluntary market, companies that want to offset their carbon emissions and show social responsibility will consider it advantageous to invest in remote Australia.

“At the end of the day, it is not a business in the sense of having a commercial return,” she said.

“It’s a sustainable initiative — a venture.”