Australia’s parliament passed the world’s first national carbon trading scheme for credits generated from farming and forestry, reports Reuters.
The program, dubbed the Carbon Farming Initiative (CFI), allows farmers to generate tradeable carbon offsets from projects that reduce emissions from agriculture and forestry, sectors that account for 23 percent of Australia’s greenhouse gas emissions.
CFI is a precursor to Prime Minister Julia Gillard’s proposed tax on carbon emissions, which is set to go into effect starting July 2012. The carbon tax will initially apply only to Australia’s largest industrial emitters — the agricultural sector is excluded, but CFI will enable farmers and foresters to earn money from planting trees, reducing the use of fire and fertilizer, and cutting emissions from livestock. Offsets generated by these activities can be purchased by companies affected by the carbon tax, reducing their effective tax burden.
CORRECTION: The original version of this post stated: “Australian companies can also buy offsets from overseas activities, including certified Reducing Emissions from Deforestation and Degradation (REDD) projects in tropical countries, provided these foreign credits amount to no more than half their total offsets.” Upon further review of the CFI, this does not appear to be the case. We apologize for the error.