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CANBERRA (Reuters) - Australian farmers could be major winners from plans to put a price on carbon emissions, particularly as other countries also move to curb greenhouse gas pollution, the nation's top climate adviser Ross Garnaut said Tuesday.
In a report on how carbon markets will impact on rural land use, Garnaut said farmers had a key role to play in climate change mitigation schemes, and had the potential to cash in on carbon offsets through a new Carbon Farming Initiative.
"The land sector, especially through biosequestration, has immense technical potential for reduction and absorption of emissions," Garnaut said.
"The realization of a small proportion of that potential, through providing incentives commensurate with its mitigation contribution, would transform the Australian mitigation effort. It would also greatly expand the economic prospects of rural Australia."
Agriculture and forestry account for about 20 percent of Australian carbon emissions, but farmers will be exempt from plans to impose a fixed price on carbon from July 2012, ahead of a full emissions trading scheme three to five years later.
Garnaut said the biggest potential carbon savings for the rural sector came from carbon forestry, or from rehabilitating over-grazed rangelands. Other benefits could come from reducing methane emissions from livestock and boosting the carbon content of soils on farms.
Climate Change Minister Greg Combet wants the Carbon Farming Initiative to start from July this year, to allow farmers and foresters to access domestic and international carbon credit markets.
Garnaut proposed minor changes to the Carbon Farming Initiative, to ensure that any abatement is genuine and permanent.
Australia accounts for about 1.5 percent of global emissions, blamed for global warming, but is one of the developed world's highest per-capita polluters due to a reliance on burning coal to generate 80 percent of electricity.
The government wants to cut emissions by five percent by 2020, based on year 2000 levels, and is working with Greens and independent lawmakers on how to put a price on carbon and then move to an emissions trading scheme.
The Greens and key independent lawmaker Rob Oakeshott welcomed Garnaut's latest report, and said it pointed to benefits for both farmers and the environment.
"With soil degradation and peak soils a critical problem for Australia, the chance to improve soil quality through soil carbon farming is an important opportunity we should not let slip," Oakeshott said in a statement.
Editing by David Fogarty