Evaluating the Carbon Farming Initiative Policy Brief

May 26, 2011 - 10:00am

Key findings of this policy brief include that:

  • The land sector—including agriculture and forestry—accounts for around 23 per cent of Australia’s total greenhouse gas emissions, making it imperative to craft climate change mitigation policies tailored to landholders; especially since emissions from the land will not be covered by any future carbon price.
  • The Carbon Farming Initiative (CFI) provides a good foundation for financial incentives to landholders to take part in the carbon market and deliver a range of credible emissions reductions activities on the land, while maintaining and even improving productivity.
  • While numerous estimates of abatement in the land sector seem to indicate a massive uptake by landholders, leading some to worry about the impact on food production and ecosystem health, a careful appraisal suggests most analyses are overly optimistic. While large abatement is technically possible, realistically, the level is likely to orders of magnitude smaller, and the risks correspondingly small.
  • One of the best, most realistic estimates of abatement from the CFI given current policy settings is the preliminary assessment completed by the Department of Climate Change and Energy Efficiency. It estimated that abatement from the CFI as approximately 1 to 3 per cent of Australia’s total emissions in 2020.
  • While modest, the CFI nevertheless represents a reasonable start to abatement in the land sector equivalent to up to 10 per cent of emissions from these sources. Importantly the CFI also starts a pathway for rural and regional communities’ and industries’ greater contribution to the global mitigation effort, including the development of new production practices and technologies for export.
  • If the CFI was supported with additional policy measures, additional abatement would likely be leveraged. Strategies complementary to the CFI include: investment in landholder education and extension; research and development of new abatement techniques and technologies; and the proper valuing of non-carbon environmental, social and cultural benefits.
  • If the CFI is detached from a future carbon pricing mechanism, demand for land sector offsets will remain voluntary and small, and the multiple opportunities and benefits unrealised.
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