Couldn’t agree less on the rainforest protection issue. There is no question that offshore avoided deforestation can only be a stopgap measure for Australia while more direct emission reduction strategies are put in place, and in any event, it would not be appropriate to pay a given country (like Indonesia) to hold its deforestation rate below a certain target figure forever - at some point, this becomes the environmentally and economically right thing for the country to do on its own. Moreover, it is true that putting a lot of short term, limited area privately funded avoided deforestation projects into place might indeed be dubious: for avoided deforestation to be real, it needs to be designed, applied and monitored at national scale.

However, despite these caveats, paying for genuine deforestation reduction as a form of carbon emissons trading would allow hard targets on net reductions to be introduced to Australia’s high emitting industries earlier, because it is potentially a very cost effective way to get such reductions in place. In the process. it would also do no harm to Australia’s relationships with its neighbours. Smart emitters would use the opportunity presented by avoided deforestation to meet their emission reduction targets in the short term, while they built their own direct long term responses. Stupid ones might try to use these trades as a permanent response, but would eventually find themselves in a supply-constrained and rather expensive market, as the international credibility of avoided deforestation programs (and therefore the risk-adjusted price of the trades) rise.