The Carbon Credits (Carbon Farming Initiative Act) 2011 (Cth) (the Act) creates a domestic Australian carbon market, which encourages the reduction of carbon emissions by placing a financial value on carbon farming (Indigenous Carbon Projects Guide, p. 15). The creation of an Australian carbon market was necessary to follow through on Australia's international obligations to limit carbon emissions under the United Nations Convention on Climate Change and the Kyoto Protocol (Commonwealth Parliament; s 3 of the Act). The Act establishes the mechanisms of how the Australian carbon market works. It sets up the types of carbon farming projects which can reduce the amount of carbon emitted into the atmosphere (Part 3), how these carbon farming programs can produce ACCUs (Part 2), and how these credits can be traded (Part 2A). The objectives, outlined in section 3 of the Act, include: - to remove greenhouse gases from the atmosphere, and avoid emissions of greenhouse gases;
- to create incentives for people to carry on certain offset projects;
- to increase carbon abatement in a manner that is consistent with the protection of Australia's natural environment and improves resilience to the effects of climate change;
- to authorise the purchase by the Commonwealth of units that represent carbon abatement; and
- to facilitate the achievement of Australia's greenhouse gas emissions reduction targets
There are other legislative acts which form part of the Emissions Reduction Fund in addition to this Act. The Carbon Credits (Carbon Farming Initiative) Rule 2015 (Cth) provides regulations which operate with the Act. Other acts include the National Greenhouse and Energy Reporting Act 2007 (Cth), which caps the amount of carbon which some large companies are allowed to emit, and the National Registry of Emissions Units Act 2011 (Cth) which sets up a register to record the ownership of carbon credits. | 
