Reef Credit SchemeOverview

November 2018

Image: Louise Nott

Reef Credit Scheme: Overview

The Reef Credit Scheme was developed in collaboration with industry groups, research organisations and regional communities.

Natural resource management not for profit organisations, Terrain NRM and NQ Dry Tropics and environmental markets investor, GreenCollar, teamed up to develop the Reef Credit Scheme. With financial support from the Queensland Government, the partnership is focused on designing and establishing a framework to support Reef Credits. This includes independent governance arrangements that will ensure that the Reef Credit Scheme is founded on the highest standards of environmental and financial integrity.

The Reef Credit Scheme was conceived in response to the emerging consensus that a market-mechanism to incentivise water quality improvements across catchments of the Reef was urgently needed.

The Reef Credit Scheme will enable land managers to improve water quality through changes in land management to generate a tradeable unit of pollutant reduction or ‘Reef Credit’. A Reef Credit can then be sold to those seeking to invest in water quality improvements, such as government, private industry and philanthropists.

Reef Credit Projects are audited against robust Methodologies to verify reductions in sediment, nutrients or pesticides into the Reef.

A Reef Credit represents a quantifiable volume of nutrient, pesticide or sediment prevented from entering the Great Barrier Reef catchment. The relative value of pollutant reduction from nutrient, sediment or pesticide is set using the reef wide pollution reduction targets described in the Reef 2050 Water Quality Improvement Plan (2018).

The Reef Credit Scheme encompasses all elements needed to deliver verified water quality improvements through ecosystem service payments, primarily to farmers, in the Great Barrier Reef catchments. Components of the Reef Credit Scheme are: • Reef Credit Standard• Reef Credit Guide• Reef Credit Registry• Reef Credit Governance• Reef Credit Methodologies• Reef Credit Projects• Reef Credit Scheme Communication and Engagement

The Reef Credit Scheme is an innovative, market-based solution offering a new way to improve the quality of water entering the Great Barrier Reef.

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Image: Terrain NRM

Benefits of the Reef Credit Scheme

• Clear and robust rules to ensure water quality improvements credited are real, additional and permanent.

• Farmers and land managers earn diversified and regular income over 10-25 year time frames.

• Research and knowledge linked to on-ground practice through peer reviewed methods designed to suit local conditions.

• Attracts investment from government, corporate and philanthropic sources.

• Investors buy verified water quality outcomes when they are delivered and audited.

• A single administrative platform with independent, transparent and accountable governance oversight to achieve water quality improvement.

• Delivers consistent measurement and monitoring tools to track progress toward water quality targets across the entire Reef.

• Funds Projects designed to suit local conditions, agribusiness requirements and land manager’s plans.

• Complements other key services such as extension, agribusiness, catchment management and other ecosystem services.

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Developing the Reef Credit Scheme

The Reef Credit Scheme is designed to operate similarly to other successful voluntary and compliance ecosystem services markets around the world. This involves the development of a Reef Credit Standard, Reef Credit Methodologies and Reef Credit Projects. The administration of Reef Credits (Reef Credit Secretariat) will be overseen by an independent not-for-profit organisation with a skills-based board (Reef Credit Governance Body).

In 2017, work began on designing the Reef Credit Scheme by foundation partners Terrain NRM, NQ Dry Tropics and GreenCollar as part of two reef water quality Major Integrated Projects funded by the Queensland Government and designed by the local community. The initial concept and early consultations on mechanisms underlying the Reef Credit Scheme were first held in the in Wet Tropics of Queensland and later introduced to the Dry Tropics.

In mid 2017, the Queensland Government committed support to the development of the Reef Credit Scheme, funding the establishment of a Secretariat for the start-up phase. Work commenced on establishing the Reef Credit Secretariat and drafting of the Reef Credit Standard, Guide and Methodologies.

An initial feasibility document was prepared and shared with key stakeholders as part of a consultation phase of the Major Integrated Projects.

Targeted meetings with key stakeholders were held to solicit input into the draft Reef Credit Standard documentation. A tender process was conducted in February 2018 to seek expressions of interest to develop a full Options Paper for the Reef Credit Scheme.

Winrock International was subsequently engaged to develop the OptionsPaper. Winrock International is a global leader in environmental markets and international development, providing solutions to some of the world’s most complex social, agricultural and environmental challenges. Winrock International also facilitated engagement with a number of operating water quality market programs, participants and founders, and standard development organisations in North America.

A final Options Paper was completed in September 2018. This document has provided the basis for development of draft versions of the Reef Credit Standard and Reef Credit Guide by the Reef Credit Interim Steering Committee.

Reef Credit Standard and Guide

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Image: Louise Nott

Foundation Reef Credit Methodologies for use under the Reef Credit Standard are being developed in parallel with the Reef Credit Standard and Program Guide.

Methodology design has involved a series of workshops with experts from research organisations, universities and partners as well as targeted meetings with key stakeholders and the establishment of several technical working groups (co-ordinated by GreenCollar).

Four foundation Reef Credit Methodologies have been drafted so far, to account for nutrient (dissolved inorganic nitrogen/DIN) reduction and sediment reduction, falling under two categories: reducing pollutant run-off through practice change or ecosystem repair.

The foundation Methodologies are:

• Dissolved inorganic nitrogen (DIN) reduction

» ‘Reduction in nutrient run-off through managed fertiliser application’ practice change » ‘Reduction in nutrient run-off through wetland systems’ ecosystem repair

• Sediment reduction

» ‘Reduction in sediment run-off through gully remediation’ ecosystem repair » ‘Reduction in sediment run-off through improved grazing practice’ practice change

At the conclusion of the drafting process, the Methodologies will be subject to peer review prior to adoption under the Reef Credit Standard in accordance with the rules set out in the Reef Credit Standard.

Reef Credit Methodologies

Reef Credit Projects

Throughout 2018 a number of project sites have been identified across the catchments of the Reef to test application of the foundation Reef Credit Methodologies.

At these sites, management activities will be undertaken to generate Reef Credits including agricultural and grazing practice change, wetland restoration and gully restoration. Projects are being developed with a number of partners coordinated by GreenCollar with support from Terrain NRM and NQ Dry Tropics. These Projects will run in a beta phase throughout 2019 during which time they will commence generating credits.

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Next Steps

The draft Reef Credit Standard and Guide will be subject to a public consultation period commencing 12 November and closing on 12 December 2018.

Targeted stakeholder briefings on the draft Reef Credit Standard and Guide will also be held in various locations throughout November 2018. During this time, draft documents will be available for comment to anyone interested in the Reef Credit Standard and Guide or affected by its implementation.

At the conclusion of the public consultation period, all feedback and suggestions will be considered and, where appropriate, incorporated into a final beta version of the Reef Credit Standard and Guide. The beta versions of these documents will be provided to key stakeholders by late December 2018.

Peer review of foundation Methodologies will also commence in December 2018.

It is anticipated that all documentation will be finalised in early January 2019.

See page 6 for Key Milestones and Dates

Draft documents and the opportunity to provide comments will be available at:

www.reefcredit.org

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Acknowledgement of CountryWe respectfully acknowledge the Traditional Custodians of the land on which we work and live and,

recognise their continuing connection to land, water and community

Image: NQ Dry Tropics

Key Milestones and Dates

Date Milestone

30th October 2018Presentation of draft Reef Credit Standard and Guide to key stakeholders

12th November 2018Public Consultation on draft Reef Credit Standard and Guide commences

Throughout November 2018 Targeted stakeholder briefings on draft Reef Credit Standard and Guide

12th December 2018 Public Consultation on draft Reef Credit Standard and Guide concludes

Late December 2018 Presentation of finalised Reef Credit Standard and Guide

Throughout December 2018

Peer review of two foundation Methodologies:

» ‘Reduction in nutrient run-off through managed fertiliser application’

» ‘Reduction in nutrient run-off through wetland systems’

» ‘Reduction in sediment run-off through gully remediation’

» ‘Reduction in sediment run-off through improved grazing practice

January 2019 Establishment of formal Reef Credit Governance arrangements

January 2019 Commencement of Reef Credit Standard and Guide – Beta operation

March 2019 Registration of first Reef Credit Projects

June 2019 Issuance of first Reef Credits

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