Across the Atlantic, the European Climate Exchange trades in official EU Allowances (EUA) (also equivalent to one tonne CO2) generated under the EU Emissions Trading Scheme. Current trading price: 14.46 Euros (AUD$23.43).

In short, having costs go up in line with official CPRS prices but only being able to offset them on voluntary market prices may do little for farmers’ terms of trade.

(These figures are only illustrative. If Australian agriculture develops a rigorous voluntary market for offsets—and it better, if it goes down this route—then voluntary offset prices will be much higher. But they are unlikely to be ever as high as the CPRS market price.)

Then there is the whole point of the CPRS: to encourage industries to innovate away from greenhouse gas-intensive practices.

By sitting outside the CPRS, the farm sector will not have direct incentives to innovate in areas like reduction of fossil fuel use. There will be incentives, but they will not be those driving the rest of the economy. In avoiding pain, agriculture may lose some gain.

Meanwhile, most of the world’s industries and a large proportion of its investment money is heading toward low-carbon technologies at a canter. “Peak oil” is forecast to occur in the next 20 years, if not sooner.

Agriculture needs to be engaged with the vigour and opportunity of these developments. Being “in” guarantees engagement. What happens if ag is out?

A lot of the devilish detail remains to be sorted. When it is, though, it’s unlikely that Penny Wong will be seen to have backflipped on agriculture. Possibly quite the opposite.

UPDATE : Bryan Clark, Industry Development manager for the Grain Growers Association and its resident emissions trading guru, takes exception to my over-simplifying the issue. He notes that:

- the CCX is based on both sides of the trade being voluntary, with no scope for selling CCX into a compliance market. The EU is a total compliance market, but with no scope for trading ag offsets. It's an apples-with-oranges comparison, Bryan suggests. Better to consider a future Australian agricultural offset system in light of the Canadian system, which is currently fixed at CAN$15 a tonne.

- Saying that excluding ag and its 16 per cent of emissions from the CPRS will mean an extra 16 per cent for the rest of industry to pick up is "totally wrong", he says. "The Government wants to "cover" 75 per cent of the Aust economy with a cap and trade scheme, the rest they will deal with in other ways. Leaving ag as uncovered means that 84 per cent of the economy is covered. Target achieved."

"For some reason the media don't seem to be able to grasp that there is more than one way to skin a cat. The ETS is but one tool in the toolbox within the wider CPRS and trying to have everything fit into a one size fits all is fraught with danger."

No argument from me on that.

But there is still that 16 per cent of floating emissions to skin, somehow. Which is the point of this post: while ag might be "out" of the CPRS, it's not out of emissions reduction efforts.

Whether that means pain or opportunity is partly up to policy makers-and-shapers like Bryan, but largely up to whether the farming community drives its own change, or has change done to it.