November 22, 2010 / 8:32 AM / in 7 years

Australia targets farmers in planned CO2 trade market

* Australia moves closer to carbon offset scheme

* Offsets from farming, forestry aims for mid-2011 start

* Potentially millions of tonnes of carbon could be captured

* Greens want commitments on permanence

By James Grubel

CANBERRA, Nov 22 (Reuters) - Australia on Monday moved closer to setting up a carbon offsets market that would reward steps by farmers, foresters and landholders to reduce greenhouse gas emissions.

Land use, including agriculture, accounts for 23 percent of Australia’s greenhouse gas emissions.

The government released guidelines for the scheme that it hopes would start ahead of a decision expected in about a year on a national price on carbon emissions aimed at pushing other sectors, such as power generators, to rein in their emissions.

Climate Change Minister Greg Combet wants the offsets scheme, known as the Carbon Farming Initiative (CFI), to start from July 1, 2011, to allow farmers, foresters and landholders to access carbon credits on domestic and international carbon markets.

The government will accept submissions until Jan. 21, 2011. The Greens broadly support the plan, but Combet could struggle to pass the scheme before July 2011 without opposition support.

The government’s former carbon trade scheme covering industrial sector emissions was twice rejected in the Senate, where the opposition and two independents can vote down government laws. From July next year, the Greens will have the numbers to decide the fate of government bills.

Combet said international buyers of CFI credits would include governments with Kyoto Protocol obligations, and companies with obligations under local or regional emissions trading schemes, such as the European Union emissions trading scheme.

The Kyoto Protocol is the United Nations’ main treaty in the fight against climate change and sets binding emissions goals for most rich nations until 2012.

“We are determined to ensure we get the model right, as well as create economic opportunities in a future low-pollution economy,” Combet said in a statement.

Potential abatements under the CFI include reforestation and revegetation, reduced methane emissions from livestock, reduced fertiliser emissions, avoided deforestation, and increased sequestration in agricultural soils.


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Estimates vary on the amount of carbon Australia’s landscape can lock away each year through different management practices. A benchmark government-funded climate change review in 2008 by prominent Australian economist Ross Garnaut, laid out about a dozen options to cut emissions from the land sector.

For example, halting land clearing could potentially reduce emissions by 63 million tonnes of CO2-equivalent a year, or slightly more than 10 percent of the nation’s total greenhouse gas emissions.

Comprehensive restoration of degraded grazing country in arid Australia could absorb about 250 million tonnes of emissions for several decades, while better cropping practices could also lead to soils soaking up more carbon.


A key issue was to guarantee the permanence of carbon offsets, with biological carbon stores considered permanent if they are held for at least 100 years.

Australian Greens Senator Christine Milne said her party, which supports the minority Labor government, supported measures to store carbon in the landscape, but the government needed to take care to protect food production.

“We need restoration forestry, we need to stop land clearance, we need to be improving all that we can in terms of bio-diversity and carbon output,” Milne told reporters.

“So we’ll be trying to make sure that these trees, where ever they are planted, are in the ground for 100 years, that they are bio-diverse, and particularly, that they are not taking out food production land from food production.”

Australia is one of the world’s top per-capita emitters of greenhouse gases, due to a reliance on burning coal to generate 80 percent of domestic electricity. Australia accounts for about 1.5 percent of global emissions.

Prime Minister Julia Gillard’s centre-left government, which earlier this year shelved its national carbon trade scheme, has set up a committee, to report by late 2011 and including Greens lawmakers, to determine the best way to price carbon emissions.

The government has promised to cut emissions by five percent of year 2000 levels by 2020. The Greens want cuts of 25 percent to 40 percent, and want the government to impose an interim carbon tax until a carbon trade scheme can start. (Editing by David Fogarty)

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