First, some background: Australia has chosen to use a carbon tax to put a price on carbon, rather than the cap-and-trade route taken by California and the complete absence of action taken by Congress.
The carbon tax is the centerpiece of Australia’s clean energy plan championed by Prime Minister Julia Gillard, and it took effect on July 1st of this year. Emitters of GHGs pay an initial cost of $23 per ton of carbon released into the atmosphere. The price will increase gradually until 2015, when a market-based trading scheme will be phased in. According to the program website, “More than half of the money raised will be used to assist households. The majority of households will receive tax cuts, increased assistance payments or both. With the rest of the money, the Government will be supporting jobs in the most affected industries and investing in our clean energy future.”
Here’s where it gets interesting for agriculture. The Australian government has put in place a “Land Sector Package” is a key element of their clean energy plan. They have committed to spend about $1.7 billion of carbon tax revenue over the next six years on this Package. A Land Sector Carbon and Biodiversity Board was established to provide advice on implementation of the working lands measures.
The Land Sector Package includes a visionary combination of programs that are outlined in a government-produced Carbon Farming Initiative Handbook. From the handbook, here’s a summary of most of the programs and their six-year funding allocations:
• Biodiversity Fund (nearly $1 billion)
Supports land managers to plant, restore, manage and enhance biodiverse carbon stores, including the establishment of wildlife corridors.
• Carbon Farming Futures ($429 million)
To help farmers and land managers benefit from carbon farming. Includes:
- $201 million for technologies and innovative management practices to improve soil carbon, reduce emissions from livestock and crops, and enhance sustainable agriculture practices
- $99 million for grants for on-farm action to reduce emissions
- $64 million for farm extension and outreach activities
• Indigenous Carbon Farming Fund ($22 million)
To help Indigenous Australians benefit from carbon farming.
• Carbon Farming Skills ($4.2 million)
To establish a new qualification in carbon farming and an accreditation scheme for carbon aggregators under the CFI. This will promote the integrity of the Carbon Farming Initiative and ensure that landholders have access to high quality carbon services.
• Regional Natural Resource Management Planning for Climate Change Fund ($44 million)
To improve regional planning for climate change (i.e., adaptation).
As the California legislature debates its investment plan for cap-and-trade allowance revenue, the Australian example serves as a beacon of what is possible in the agriculture sector.