Australian farmers may be exempt from an emissions trading scheme - unlike their New Zealand counterparts - but from next year, they will be able to earn income by selling carbon credits.
Australian Prime Minister Julia Gillard announced yesterday the establishment of a carbon farming initiative that allows farmers to plant trees for which they can earn and sell carbon credits to polluters who want to offset their carbon emissions.
Agriculture accounts for 23% of Australia's greenhouse gas emissions, compared with half of New Zealand's emissions.
The New Zealand Government intends bringing agriculture into the emissions trading scheme (ETS) in 2015, when it will have to account for a portion of its emissions, but only if our competitors impose a similar scheme on their primary sector.
"The Government is listening to you.
The Prime Minister, [Climate Change Minister] Nick Smith and I have all said we reserve the right to review the date of introducing agriculture into the ETS.
We have no intention of putting you at a disadvantage to our trading partners," Agriculture Minister David Carter told Federated Farmers last week.
"But, be aware, most other political parties think when it comes to addressing New Zealand's emissions record, agriculture is not being hit hard enough.
And as I said earlier, we live in a democracy."
Dr Smith said in an interview it was early days in Australia's climate change policy, which was at a similar stage to an emissions reduction programme introduced by New Zealand's previous Labour government.
"It is far more politically manageable to hand out credits that are positive than requiring debits for your emissions."
To qualify for the Australian Government's carbon farming initiative, the abatement must be permanent and would not otherwise have occurred, and the science behind the projects must have peer review support.
In announcing the initiative, the Australian Government said it allowed polluters to pay farmers and landholders to reduce their pollution.
"We know markets are the cheapest way to reduce pollution.
We don't pretend to know more than farmers about their land.
The market will give farmers/landholders flexibility to find the best price for their pollution efforts."
The scheme was estimated to be worth more than $NZ600 million over 10 years.
Prime Minister Julia Gillard said the initiative would also provide incentives to identify and implement low-cost ways to reduce pollution in agriculture and forestry through research and development.
Eventually, the scheme could be extended to include reforestation and revegetation, reduced livestock methane emissions, reduced fertiliser emissions, manure management and soil carbon farming.
The Australian Government had invested $A20 million ($NZ23 million) in soil research and was specifically looking at the application of biochar, a carbon-rich type of charcoal that can lock carbon in the soil.
New Zealand's total emissions in 2008 were 74.7 million tonnes of carbon dioxide equivalent, 22.8% higher than in 1990, the benchmark figure that countries are expected to strive to meet under the Kyoto Protocol.
Federated Farmers president and ETS critic Don Nicolson was not aware of Australia's initiative, but said if it was voluntary and people thought it was financially viable, he welcomed it.
In contrast, he said New Zealand's ETS would not alter New Zealand's carbon profile to the extent the public believed.
The Australian programme also showed there was greater recognition for the carbon-absorbing qualities of soil and vegetation than in New Zealand.
