Carbon farming initiative Regulation 3.37(4) (National Water Commission) Carbon farming initiative 1 Introduction Permanent tree planting or plantation activities have the potential to intercept significant volumes of surface and/or groundwater and thereby present a risk to the future integrity of water access entitlements and the achievement of environmental objectives. In recognition of this potential risk, the Carbon Credits (Carbon Farming Initiative) Regulations 2011 exclude permanent tree planting projects from the CFI in areas that receive greater than 600mm average annual rainfall. There are specific exemptions, one of which relates to regions where the relevant state or territory government has adequately implemented the commitments under the National Water Initiative (NWI) to manage water interception by plantations (see Regulation 3.37 (4) below). Carbon Credits (Carbon Farming Initiative) Regulations 2011 Regulation 3.37 Excluded offsets projects — specified tree planting (4) Specified tree planting is not an excluded offsets project if the project area is in a region in relation to which the National Water Commission has determined that the commitments by the relevant state or territory government under the National Water Initiative to manage water interception by plantations have been adequately implemented. Clauses 55–57 of the NWI prescribe measures to manage the impact of interception as a result of land use change to protect the integrity of the water access entitlements system and the achievement of environmental objectives. This assessment framework has been developed to ensure that approved CFI submissions adequately address Clauses 55–57 of the NWI. Assessment framework The assessment framework enables the Commission to determine if the arrangements for managing water in a particular region amount to adequate implementation of NWI commitments for managing interception by plantations. In most cases, the information required to answer the questions in the framework is included in water plans. If not, then the information is held by the relevant state or territory government department and should be available upon request. Water terms vary between different state and territory governments. Definitions of key terms used in this assessment framework have been provided for the purposes of this assessment only. The assessment framework is supported by a definitions table of key words and phrases used in the framework. These definitions have been tailored specifically for the purpose of this CFI assessment framework. Carbon farming initiative 2 Framework: Regulation 3.37(4) BOX A Is the submission within a water plan region listed as having adequate plantation management arrangements on the National Water Commission’s website. YES ADEQUATE YES ADEQUATE YES NOT ADEQUATE YES NOT ADEQUATE YES ADEQUATE NO BOX B Do current water management arrangements incorporate interception by plantation forestry through any of the following means: •The proposal is in a region where significant interception by a plantation activity is required to hold a water access entitlement; •The proposal is in a region with an identified threshold size for significant interception by plantation activities, above which a water access entitlement is required; •The proposal is in a region with an identified threshold level of interception by plantation activities, based on a risk assessment, above which a water access entitlement is required. NO BOX C Is the submission within a region where the water resource is fully allocated NO BOX D Is the submission within a region where the water resource is approaching full allocation NO BOX E Do current water management arrangements deal with interception by plantation activity through the following means: •If significant, then interception by plantation activity is identified and estimated for water planning purposes; OR •A risk assessment of the water resource has been undertaken that considers significant intercepting activities, and a decision has been documented that plantation activity does not pose a significant risk to the water resource; AND •Monitoring and reporting of the allocation level within the water system is undertaken (through a water plan or other process). NO NOT ADEQUATE Carbon farming initiative ADEQUATE NOT ADEQUATE ADEQUATE management arrangements for dealing with interception from the proposed plantation activity. NOT ADEQUATE management arrangements for dealing with interception from the proposed plantation activity. 3 Explanatory notes Decision Box A The National Water Commission will list water plan regions in the CFI eligible planting zones that have adequately implemented the commitments under the National Water Initiative (NWI) to manage interception by plantations. If a submission is within a water plan region listed on Commission’s website, the submission can be considered to have adequate management arrangements in place for dealing with interception and therefore satisfy Regulation 3.37 (4). Decision Box B – Water access entitlements Determines the regions where any further increase in water interception by plantation activities beyond a determined threshold requires water access entitlements. Decision Box C – Fully allocated systems In regions where water resources are fully allocated, any increase in water use by plantations will present a risk to the future integrity of water access entitlements and the achievement of environmental objectives. Decision Box D – Approaching full allocation In regions where water resources are approaching full allocation, an increase in water use by plantations may present a risk to the future integrity of water access entitlements and the achievement of environmental objectives. Decision Box E – Water management arrangements Defines the remaining regions which are not at or approaching full allocation where there are adequate water management arrangements in place to account for interception by plantations. Carbon farming initiative 4 Definitions of terms used in the assessment framework Term Explanation/definition Allocation level The specific amount of water that is made available for consumptive use Based on Commonwealth Water Act 2007 and Policy Guidelines for Water Planning through water access entitlements, other statutory rights, or as estimated unregulated use, in a particular water plan area under the rules of the water plan for that area, in any given water accounting period. The amount of the allocation depends on the availability of water and the security of the entitlement, and is specified according to rules in the relevant water plan. and Management and Guide to the Basin Plan Approaching full allocation Based on AWR2005 Refers to situations where the amount of water resources made available for consumptive use through water access entitlements, other statutory rights, or as estimated unregulated use, in a particular water plan area under the rules of the water plan for that area, is above 70% of the extraction limit for that water plan area. This 70% trigger for approaching full allocation is based on the AWR2005 definition for high level of use of a water resource; the sum of diversions and extractions is between 70 per cent and 100 per cent of sustainable yield. Different jurisdictions may define approaching full allocation differently for their own internal planning purposes. For the purpose of this assessment, a region is classified as approaching full allocation in line with the definition above unless official advice from the relevant state or territory government department that the water system is not considered by them to be approaching full allocation is provided. This information may be noted in a current water plan. Example descriptions in water plans for systems that are approaching full allocation include: Extraction limit Based on Carbon farming initiative the system is approaching full allocation only new entitlements for specific uses will be allowed in the system the current level of entitlement is stated, and the extraction limit is stated, and the current level of entitlement is above 70% of the extraction limit. The portion of the total water resource that can be made available for consumptive use at a given time or during a defined planning period, 5 Term Explanation/definition Commonwealth through water access entitlements, other statutory rights, or as estimated Water Act 2007 unregulated use, in a particular water plan area under the rules of the and Policy water plan for that water plan area. Guidelines for Water Planning and Management Fully allocated Based on NWI and Policy Guidelines for Water Planning Refers to situations where the amount of water resources made available for consumptive use through water access entitlements, other statutory rights, or as estimated unregulated use, in a particular water plan area under the rules of the water plan for that water plan area, is equal to the extraction limit for that water plan area. and For the purpose of this assessment, any region that is considered to be Management overallocated by the relevant state or territory government department is definitions for ‘overallocation’ also considered to be fully allocated. This information is available from the relevant state or territory government department. This information may be noted in a current water plan. Example descriptions in water plans include: Interception Based on Commonwealth Water Act 2007 Region the system is fully allocated no more entitlements will be allowed in the system unless other existing entitlements are forfeited the current level of entitlement needs to be reduced the current level of entitlement is stated, and the extraction limit is stated, and they are the same volume. Refers to the capture of surface water or groundwater that would otherwise flow directly or indirectly into a watercourse, lake, wetland, aquifer, dam or reservoir. An interception activity includes establishing extensive tree plantations. The smallest area of management specified in a water plan. A region may be a water plan area or a water plan sub-catchment or zone area. If there is no water plan, then region refers to the water management area specified by the relevant state or territory government department. Risk assessment Hamstead 2011 A measure of the potential for loss of value. Risk is assessed by identifying threats, assessing the likelihood that they will occur and cause damage, and the consequence of this being the value of the likely damage. For example, risk is high if a highly valued asset is assessed to be likely to be heavily damaged or lost. On the other hand there can be a high likelihood of damage but a low risk if the asset likely to be damaged Carbon farming initiative 6 Term Explanation/definition is not considered to be of value. Significant In relation to land uses that intercept water: a land use activity that the relevant state or territory government department considers to intercept a significant amount of water within a system. Different jurisdictions may define significant differently for their own internal planning processes. The definition should consider that plantations, as a proportion of total use within a region, may become more significant in drier years. The definition should also take into account the impact of interception by plantations on base flows. This information may be noted in a current water plan or be available upon request from the relevant state or territory government department. For example, significance may be described in terms of presenting a low risk to the water resource. Threshold level of interception The extent to which the water resource in a region may be taken by significant interception activities (in terms of volume), before management controls are increased. For example, the percentage of the water resource in a region that may be intercepted by large scale plantations before increased regulation is required. Threshold size The extent to which interception activities in a region may be carried out (in terms of land area), before management controls are increased. For example, the largest area of land that can be used for a plantations activity before regulation is required. Water access A perpetual or ongoing entitlement to exclusive access to a share of water entitlement (entitlement) from a specified consumptive pool as defined in the relevant water plan. NWI Water The rules (volumes and timing) for distribution and access to a water management arrangements resource within a defined region to implement objectives and achieve outcomes for that water resource. This information may be specified in a water plan, be based on state-wide policy if outside of a water plan area, or be available upon request from the relevant state or territory government department. Water plan NWI Statutory plans for surface and/or groundwater systems, consistent with the Regional Natural Resource Management Plans, developed in consultation with all relevant stakeholders on the basis of best scientific and socio-economic assessment, to provide secure ecological outcomes and resource security for users. The NWI Policy Guidelines for Water Planning and Management further Carbon farming initiative 7 Term Explanation/definition refined this definition to make clear that a plan may be a single legal instrument or a number of legal and policy instruments working together. For the purpose of this assessment, a non-statutory plan that guides entitlement and allocation decisions in a region is considered to be a water plan. Water system NWI A system that is hydrologically connected and described at the level desired for management purposes (e.g. sub-catchment, catchment, basin or drainage division and/or groundwater management unit, sub-aquifer, aquifer, groundwater basin). Carbon farming initiative 8