17 August 2010

Farmers who help reduce and store pollution will receive credits that can be sold in Australia and overseas under a new Carbon Farming Initiative to be set up by the Australian Labor Government.

The policy, announced on Saturday, commits to opening up opportunities for farmers in international carbon markets but will deliver little to farmers in the short term, say some farm leaders.

Australian Farm Institute executive director Mick Keogh said Australia did not sign up to the Kyoto Protocol on soil carbon because it would have faced a liability when drought and bushfire stripped carbon from the soil. Soil carbon could only be traded on the voluntary carbon market, he said.

The US voluntary market dropped down to 15c a tonne, "and they abandoned it", he said. "The most the voluntary carbon market for soil carbon ever got to was about $5 a tonne."

The institute has estimated the cost of building up soil carbon, through changed management and fertiliser application, at "somewhere above $30 a tonne".
Charlie McElhone from the National Farmers Federation argued the initiative was prudent.

He agreed the voluntary market was limited "but that is not to say the international environment may not change".

If Australian farmers wanted to capitalise on growth in international markets for carbon, "then we need to be starting the process now, making it very clear for farmers what some of these complex international rules actually mean on a practical level", he said.

Labor says the initiative is fiscally responsible as the market will choose the most efficient and cost effective ways to reduce pollution and pay for it, rather than the Government picking winners and forcing taxpayers to bear the cost.

Farmers and land holders will benefit from a new income stream, and the environment will benefit from reduced pollution. There will be no restriction on the number of credits that can be generated, with initial conservative estimates suggesting it could be worth about $500 million over 10 years.

Under the Carbon Farming Initiative, a Labor Government would legislate clear rules for the recognition of carbon credits that could then be sold on domestic or international markets. These are expected to be rolled out from mid-2011.

This means farmers will know in advance exactly what they need to do to generate credits that are internationally recognised and available for trading.

A Labor Government will provide farmers, land holders and forestry growers with the tools to understand how to generate carbon credits. As part of this, Landcare, the volunteer organisation which has been working with Australian farmers for the past 21 years, will be funded to provide information on how farmers can further benefit under the initiative.

The initiative will also help link farmers, land managers and forestry operators with brokers, who could sell their credits on the domestic or international market.

This will allow farmers to keep doing what they do best, while also connecting them with those who have the monitoring and carbon retail know-how.

Eligible methodologies that are expected to be settled in the early years of the scheme include reforestation, as well as projects that avoid or reduce emissions from livestock, fertiliser use and manure management, savannah burning, legacy waste in landfills and deforestation.

As part of this initiative Labor will work at home and abroad to support further research on soil carbon and biochar. This will build on the $20 million Climate Change Research Programme.

The $45.6 million cost of the Carbon Farming Initiative is already included in the Budget, through the Renewable Energy Future Fund.

Source: ALP media release