Australian agriculture both contributes to and is vulnerable to climate change. It is Australia's second highest greenhouse gas emitting sector, although this does not account for carbon sequestration, and is the sector most vulnerable to climate change with production expected to fall in the absence of effective abatement action.

The ability to measure emissions accurately and affordably is a pre-requisite for including any source of emissions in a robust ETS. While it is relatively easy to measure energy combustion emissions, this is not the case for agriculture. The three main gases produced from agricultural enterprises are carbon dioxide, methane from the digestion systems of...