The Department of Climate Change and Energy Efficiency has recently announced the Carbon Farming Initiative (CFI) framework . The carbon offsets scheme will provide new economic opportunities for farmers, growers and landholders through the generation and trading of carbon credits for sale in both the domestic and international markets.
Reductions in carbon pollution can be achieved through a number of mechanisms, such as:
- Reducing or avoiding emissions, or
- Removing carbon from the atmosphere and storing it in soil and/or trees.
Contributing to 23% of Australia’s overall emissions, agriculture and forestry can play a large role in reducing climate change impacts through better farming practices. Eligible activities will include:
- Reforestation, forest management, avoided deforestation, revegetation
- Soil carbon, including biochar
- Reduced fertiliser use and manure management
- Savannafire management
- Legacy waste emissions from landfill
- Reductions in livestock emissions
Agriculture and Climate Change
Many agricultural and agribusiness activities generate and/or directly or indirectly cause emissions of greenhouse gases. Directly through factors such as livestock which emit methane and nitrous oxide which is released when synthetic fertilisers are used. Other direct emissions include fuel used for transportation and harvesting etc, and indirect emissions through electricity consumption.
Agriculture and agribusiness will be indirectly affected by any proposed carbon tax or reduction scheme, through higher prices for inputs such as electricity, fertiliser, chemicals and fuel. Studies estimate that at a $40 per tonne price on emissions, production costs for cropping will rise 4.5% and for livestock 3%.
Other studies have estimated that a $40 per tonne price on emissions , would increase production costs by 6% for cropping and 18% for livestock. This estimation does not include regulatory or supply chain compliance and reporting costs or costs associated with mitigation and adaptation.
The Australian Government recognises that agriculture, which competes in global markets, has little capacity to pass increased costs on to its customers. Furthermore, the extent to which emissions from agriculture can be reduced with economic efficiency is not fully understood.
 Climate Change: Opportunities and Challenges in Australian Agriculture. Gunaskera D, Tulloch C, Ford M and Heyhoe E, ABARE, Canberra, June 2008