Wednesday, June 01, 2011

Garnaut bestows billions on Carbon Farmers

The 'rivers of cash' that were once predicted to flow through Agriculture from Carbon Farming threaten to break the levy banks if Professor Ross Garnaut's estimates prove accurate. In the period up to 2020 he recommends that 10% of revenue from the Carbon Tax be used to buy offsets from Carbon Farmers. In its first year of operation the scheme could inject more than a billion into farmers' pockets. "A carbon price of $26 per tonne of carbon dioxide equivalent would generate around $11.5 billion in potential revenue from the value of permits in 2012-13," he writes. The money would flow when "non-Kyoto offset credits could be purchased by the regulatory authority" And that is additional to the revenue generated from sales of offsets to "liable entities [which] could purchase Kyoto offset credits directly, to meet all or part of their liability".
It won't be open slather, though: "A limit to both interactions, especially in the fixed price period is desirable for budget neutrality purposes and to ease anxieties about the undermining of the abatement effort." (Anxieties = fear that offsets merely a pay-to-pollute scheme.)
But there is a burr under the saddle: "Any offset mechanisms in the land sector, including the Carbon Farming Initiative, should be seen as transitional to full inclusion of the sector in a comprehensive carbon pricing scheme." In other words, we get paid to transition to low emissions farming, but eventually we stand on our own two feet in a carbon restricted world.

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