Can the CFI survive

The opposition's policy is to fund direct action to reduce carbon dioxide emissions, with a particular focus on soil carbon and planting trees. Taxpayers' money would be required, which is not the intention with the CFI, but on projects having a positive outcome rather than avoiding a negative outcome, such as not logging a native forest.

The government and opposition agree that carbon sequestration in the soil is probably one of the single biggest opportunities for carbon dioxide emissions reductions in Australia. It also has the potential to significantly improve soil quality, farm productivity and water efficiency. If it can be made widely affordable and applicable, and that is largely a technological challenge, no CFI incentives will be needed.

Whether the technological hurdles can be overcome by throwing money at it, as the opposition suggests, is another matter. History suggests it won't be that easy.

More relevant to the CFI is the opposition's proposal to encourage farm forestry, as distinct from using trees as pure carbon sinks. It envisages planting 20 million trees by 2020, although the emphasis is on the reestablishment of urban forests and green corridors.

Similar targets have been tossed around before and are not credible. To the extent that they rely on public sector implementation and expenditure they are also unachievable. Moreover, cutting down trees in urban areas is only slightly less controversial than building nuclear power stations, meaning any trees planted will become permanent carbon sinks. If the policy is to work, it has to encourage planting trees for harvesting under commercial conditions.

But whether that should occur under the auspices of the CFI, or soak up a lot of taxpayers' money, is questionable. Farmers need little convincing of the merits of growing trees so long as it makes financial sense and does not interfere with their main enterprises. Being able to harvest the trees is integral to that. An incentive via the tax system that recognises the long term nature of the investment may be all that is needed to get them planting. And if that was an option, the CFI might only need a handful of people to count carbon credits. It would be survival, but only just.