Opportunity for Australian farmers from Paris Conference

     

Brent Finlay
President
National Farmers’ Federation

    
John Connor
Chief Executive Officer
The Climate Institute

Q1.  Based on the most recent published inventory, agriculture is responsible for approximately 15% of Australia’s national emissions. Given Australia’s emission reduction target, do you think agriculture will or should be required to reduce emissions as part of Australia’s overall effort?

Brent Finlay, NFF
For emissions reductions to count towards reducing the national target, an approved method is required. The reality is that for most Australian farmers, cost-effect methods are not yet available. Mandatory policies (such as a tax or trading scheme) that cover farming would be asking farmers to demonstrate that they are reducing emissions where there is no avenue for them to do so. Such policies would just impose costs on the agriculture sector, reducing our international competitiveness.

The Climate Change Authority (CCA) as part of its Special Review has noted that mandatory pricing policies are not suited to agriculture as the cost of measuring and reporting on emissions are likely to be high. The CCA also notes that in sectors that have few opportunities for emissions reductions in the short term it may be best to concentrate on voluntary measures such as offset schemes, and on research and development of low emissions technologies.

With more research and development (R&D), there is likely to be a real opportunity for Australian farmers to voluntarily contribute to our emissions reduction effort. We need cost-effective technologies to better utilise renewable energy sources and improve energy efficiency. With Government, we have been investing our R&D levies to investigate genetic improvements, feed sources and farming practices to reduce the emissions intensity of livestock and cropping systems. This partnership needs to continue.

John Connor, The Climate Institute
Australia’s initial target was offered months before the Paris Conference and when compared with other countries would leave us in 2030 with the second highest per capita greenhouse emissions in the G20 just behind Saudi Arabia and with one of the most carbon intensive economies. The government also did not meet international expectations and show how its target was a fair contribution to limit warming to below 2 degrees. Paris highlighted the risk of such a position with an agreement to strengthen goals every five years to keep warming below 1.5 to 2 degrees above pre-industrial levels. The 1.5 degree objective in the Paris Agreement is just half a degree above current warming that CSIRO and other agencies highlight is already impacting Australia’s productive landscapes.

The Paris agreement crystallised momentum underway in global energy markets, investment trends and in global national and state level policies. It is highly significant to agriculture and all other sectors that the Agreement also recognises heat trapping greenhouse gas emissions need to be balanced with ‘sinks’ of these emissions sequestered in vegetation, soils, oceans and other geological or industrial stores. This is recognised as the need for ‘net zero emissions’ and has been endorsed by political, financial and business leaders across the spectrum here and overseas.

Scientists tell us for the agreed warming goals this needs to be achieved by around 2050. Agriculture like all sectors will need to engage with the challenges and opportunities of this objective. If one sector does less, others need to do more. To do our bit in helping to keep warming well below 2 degrees warming, The Climate Institute has recommended reductions below 2000 levels of 65% by 2030 and net zero emissions for Australia before 2050.

Q2.  The current ‘Direct Action’ approach to achieving reduced emissions has resulted in sequestration projects on agricultural land providing over 60 Mt of the 90 Mt of abatement contracted in the two tenders to date. Do you foresee any problems with a continuing reliance on land-sector projects to achieve Australia’s future emission reduction target?

Brent Finlay, NFF
The results of the Emissions Reduction Fund to date demonstrate that farmers are willing participants in schemes to reduce carbon emissions. We have seen that in addition to sequestration, the pork industry has featured prominently in both the Emissions Reduction Fund and the Carbon Farming Initiative by capturing methane from their facilities. As methods are developed for other industries we will likely see a broadening of the type of contracts awarded under the Emissions Reduction Fund.

While there are no doubt benefits to participating in a sequestration project for the individual farmer – if we take a broader perspective there are costs to our communities and the agriculture sector as a whole. Sequestration sites must not be ‘locked up and left’, with neighbours bearing the brunt of alternative land uses. Weed, fire and feral animal management are a must, and appropriate focus should be given by the purchasers of carbon credits to ensure compliance.

If more and more land is set aside for sequestration – and particularly if this is concentrated – the greater the potential for inefficiencies in the agriculture supply chain. This means a greater potential for loss of local farm services and suppliers, and more costly downstream processing such as abattoirs or grain receivals. ‘Tree farming’ doesn’t employ local people who spend money locally, have kids in schools or participate in local activities. If concentrated, large-scale sequestration is likely to have localised impacts. 

John Connor, The Climate Institute
There are many opportunities for the land sector to provide substantial sequestration and for farmers to supplement their incomes with ‘carbon farming’ opportunities – but it can’t do the job alone. Over 30% of Australia’s emissions come from the electricity sector and it’s emissions have risen since the removal of carbon limits and pricing. Inaction in this area is also preventing further large-scale investment in clean energy alternatives that till now has seen billions invested in regional Australia. The land sector can play a key role in offsetting emissions, and in potential provision of feedstock for negative emissions electricity through bioenergy and carbon capture and storage, but also has to face up to limits and responsibilities. These include the need to properly align with natural resource and catchment management objectives as well as preserving biodiversity and other ecosystem services. Large-scale initiatives will also need sensible community consultation and engagement. The changing climate also provides risks with longer and more extreme bushfire seasons, increasing soil aridity, historic heatwaves and extreme weather events already increasing with the global warming already measured and continuing to grow.

Q3.  Do you believe the current Direct Action policy and its allocated budget will be sufficient to achieve Australia’s emission targets, and if not, what would be your preferred alternative or additional policy approach?

Brent Finlay, NFF
Australia’s policy settings must recognise the principle of emissions efficiency in agriculture. The Paris Agreement highlighted the challenge of feeding a growing global population. An absolute approach to agriculture emissions reduction (ie net emissions from the sector are reduced) is at odds with expanding production to meet growing demand. We must focus on producing more, with less emissions per unit of production.

Australia’s policies must also support our other domestic policy agendas. Emissions policies that negatively impact farmers would hamper our ability to harness the opportunities provided by recent trade agreements with Japan, China and Korea.

R&D and innovation must be at the forefront of our policy agenda. We need to continue to develop cost-effective methods to enable farmers to participate in voluntary carbon markets. Technologies and practices that reduce emissions and improve productivity or efficiency on farm will be adopted by farmers as it will make business sense to do so – with or without the incentive of a carbon return. We need investment in the R&D to develop these methods – and the extension efforts to facilitate adoption.

Carbon policies must promote Australian farm competitiveness – not dampen our ability to grow and increase productivity. Agriculture has borne the cost of Australia’s past policies to achieve our international emissions reduction targets. State regulations on land clearing have been the biggest sectoral contributor to emissions reductions in Australia since 1990. Farmers were also squeezed under the Carbon Tax. Carbon tax flow-on costs hit Australian farmers every time they paid for essential electricity, fertiliser, chemical and fuel supplies.

There is great potential for agriculture to actively contribute to Australia’s emissions reduction effort. Whatever the policy settings adopted to meet the agreed target, a consistent approach is required to facilitate the long-term investment required to see agriculture meet its full potential.

John Connor, The Climate Institute
The government itself has recognised the need for additional policies to the Emissions Reduction Fund (ERF) to meet its 2030 targets and is looking at areas such as energy productivity, vehicle standards and hydrofluorocarbons such as refrigerants. These are important initiatives. However, even with strong policies that may emerge, they are still unlikely to help meet the government’s own targets, let alone those it should have.

Dependence on taxpayer dollars is a precarious basis for emissions reduction policies and current ERF provisions are well short of what is required if they are to be the primary purchaser of reductions. The Climate Institute estimates that at current average carbon prices achieved after the first two auctions the ERF, even if boosted to the $4.95 billion some in government have promised, could purchase just 3.5% of Australia’s total emissions out to 2030; 8% of a 2030 target consistent with Australia doing its bit to achieve the less than 2°C limit; or just 15% of the government’s current inadequate 2030 target.

Australia needs comprehensive policies, regulations or prices that make our largest emitters, not taxpayers, take responsibility and help drive markets for carbon farming, clean energy and other climate solutions. Whether it is through a strengthening of the government’s safeguard mechanism or an internationally linked emissions trading scheme as proposed by ALP we will still need additional policies and incentives. Funds like the ERF have a role but are insufficient alone. The electricity sector in particular needs an orderly plan to replace aging coal fired power stations with clean energy.

Paris has confirmed a trend where global investors, regulators, nations and companies have realised that climate change is costing and needs to be addressed. Agriculture can and should prosper in a global economy of net zero or emissions. The challenge for agricultural and other businesses, as well as for government, is to build the policies and practices that maximise the opportunities and minimise the undeniable challenges in the transition that is needed.