* Australian Senate passes CO2 farming scheme
* Legislation is crucial part of national CO2 pricing plan
* Carbon tree plantation firms to be winners
CANBERRA, Aug 22 Australia's parliament endorsed
the world's first national scheme that regulates the creation
and trade of carbon credits from farming and forestry on Monday,
to complement government plans to put a price on carbon
emissions from mid-2012.
The laws, the first major bills passed by the government
with Greens support in the Senate since the Greens took the
balance of power on July 1, are a precursor to the carbon price
legislation to be put before parliament later this year.
Known as the Carbon Farming Initiative (CFI), the new laws
allow farmers and investors to generate tradeable carbon offsets
from farmland and forestry projects. Land use including
agriculture accounts for 23 percent of Australian emissions.
"Green carbon is one of the four pillars of the climate
package, alongside putting a price on pollution and investing in
renewable energy and energy efficiency," Greens deputy leader
Christine Milne said.
"The passing of this bill augurs well for passing of the
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The laws passed with minor Senate amendments backed by the
government, with the House of Representatives now due to
rubber-stamp the changes.
The step came as hundreds of truckers circled Australia's
parliament on Monday in a campaign aimed at forcing the
government to withdraw the proposed carbon tax law, and call new
Projects backed by the CFI include tree plantations that
soak up carbon dioxide as they grow, cutting methane emissions
from burping camels and livestock, reducing fertiliser use and
better fire management of northern grasslands.
The government said the offsets can be traded domestically
and overseas. However, the scheme is expected to start off
slowly until parliament passes laws to put a price on carbon
emissions from July 2012.
Prime Minister Julia Gillard plans a carbon tax starting at
A$23 a tonne on about 500 of Australia's biggest polluters from
July 2012, ahead of emissions trading from mid-2015, and has
staked her government's future on securing parliamentary support
for her plan.
Agriculture is not included in the carbon price scheme, but
the government wants farmers to be able to benefit from the
market for carbon credits.
Under the carbon price plan, Australian industries which buy
carbon offsets will need to ensure at least 50 percent of the
offsets are domestic credits.
"This is fantastic. It gives us the ability to export
(credits), it gives a boost to the voluntary market and it gives
confidence that we can get an administrative structure that we
desperately need," said Andrew Grant, CEO of CO2 Group,
, the country's main developer of tree plantations for
The government estimates the carbon farming initiative will
help cut Australia's carbon emissions by 460 million tonnes by
"There is increased interest in the CFI from
across market and the first wave of investment activity will
start to unfold now the Act has been passed," said Martijn
Wilder, global team leader for environmental markets at law firm
Baker & McKenzie in Sydney.
"But the really significant activity under the CFI will come
with the approval of carbon pricing laws," he added.
Australia accounts for about 1.5 percent of global
emissions, but is the highest per-capita polluter in the
developed world because coal is used to generate most of the
The government has committed to cut total emissions by five
percent of year 2000 levels by 2020.
The conservative opposition strongly oppose putting a price
on carbon emissions and has promised to scrap the scheme if it
wins the next election, due in the second half of 2013.
But a report by the left-leaning Australia Institute on
Monday said the opposition plan would create a prolonged period
of uncertainty, even if the conservatives win the next election,
as the polls suggest.
It said the conservative Liberal and National Parties would
have to wait until mid-2016 before they could win enough seats
in the Senate to repeal the carbon-trade laws, and its direct
action plan for tackling emissions could be delayed until 2018.
(Reporting by James Grubel; Additional reporting by Stian
Reklev of Point Carbon News; Editing by David Fogarty)