* Tree planting, better farm practices key to climate fight
* Carbon offsets set to be new source of cash for farmers
* Government hopes to launch farm CO2 market in July
By David Fogarty, Climate Change Correspondent, Asia
SINGAPORE, March 2 (Reuters)- Australia's farms and vast outback could help cut or offset up to a fifth of the economy's greenhouse gas emissions, a senior scientist says, as the government struggles to put a price on carbon pollution.
The country is a major coal exporter and consumer and is among the highest per-capita producers of planet-warming carbon emissions in the rich world.
And those emissions are rising from an economy fuelled by a resources boom and soaring wealth. The government is battling to win political and industry support for a pricing scheme to cut carbon pollution and boost green energy.
A partial solution is encourage farmers to invest in ways to lock away carbon in the soil, plant trees, reduce fertiliser use or cut the amount of methane from burping cows and sheep. In return, they would earn money for their efforts via the sale of tradeable offsets.
"We are uniquely placed among developed countries to consider these areas because we have such rich land resources," said Michael Battaglia, who leads a programme studying how to cut greenhouse gas emissions from agriculture and use the land as a store for carbon.
Trees, for example, soak up large amounts of carbon as they grow, while changing cropping and grazing practices can boost the amount of carbon in the soil or in native vegetation. Dietary supplements can reduce methane from livestock.
"Australia could be abating something in the order of 10 to 20 percent of its current emissions with a reasonably concerted effort," Battaglia, of the state-funded research body the CSIRO, told Reuters by telephone.
"But there will be a lead-up period to achieve that, 5 to 20 years."
INCENTIVE TO CUT EMISSIONS
The government hopes to launch its Carbon Farming Initiative on July 1 this year as a way to give farmers an incentive to cut emissions and for polluters such as steel mills and coal-fired power plants to source offsets to meet emission cut targets.
But demand for the government-regulated offsets hinges on a national carbon price being set -- perhaps as soon as July 2012.
Agriculture, deforestation and burning emit more than 20 percent of Australia's greenhouse gases now.
"The land sector, especially through biosequestration, has immense technical potential for reduction and absorption of emissions," Australia's top climate adviser, Ross Garnaut, wrote in a report released on Tuesday.
Realising even a small part of that potential through incentives would transform Australia's climate change fight and expand rural economic prospects, he said.
Battaglia said activities most likely to draw investment initially would be tree planting, with a number of companies already generating voluntary carbon market offsets from plantations, and reducing deforestation of native forests. "Things like re-afforestation and avoided deforestation probably offer significant abatement at a pretty minimal cost," he said. A carbon price of around $10 to $20 per tonne could probably bring about up to 100 million tonnes of potential abatement in re-afforestation, he added.
Boosting soil carbon levels on farmlands was harder, since ways to measure soil carbon changes need to be developed.
"In converting this into a market, one needs to look at issues of permanence and how do we track observed changes in soil carbon," Battaglia said.
In 2009 a CSIRO study found that carbon forestry, reducing deforestation, changes in grazing land practices that boost soil carbon and switching to bioenergy promised a cut of 77 percent in Queensland's emissions, which stood at 182 million tonnes in 2007.
Battaglia said it was unlikely such steps could compete with food production.
"Unless the market is grossly distorted through incentives, food prices will always exert a premium on productive land over carbon prices," he said.
It was also no silver bullet, with many carbon-fighting steps having a limited shelf life. "Bio-sequestration is not a long-term solution. It only gives us time to restructure our economy."
(Editing by Clarence Fernandez)
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