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2004 November - Climate Change - Can Agriculture Take the Heat

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FPJ0103 Article - Prospects for the Australian Economy and the Impact of Meeting Australia's Kyoto Commitment

Adams, P
Farm Policy Journal, November 2004, Volume 1, Number 3, pp. 26 - 34 (9 pages)



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Australia's Emissions Trading Scheme - Knowledge Gaps and Research Needs for Primary Industries

A particular challenge for agriculture are the difficulties associated with accurately estimating and monitoring the greenhouse emissions that are attributed to the sector under international greenhouse accounting standards.

The research was carried out before the Australian Government released its 2008 Green Paper identifying a preferred option for the design of a national greenhouse emissions trading scheme. For that reason some of the assumptions made about the proposed design of the ETS may no longer be valid, although the broad implications of the ETS for Australian farm businesses remain appropriate, and the research and information needs have not changed as a consequence of the specifics of the Green Paper – which are still subject to potential change when legislation is enacted in 2009.

The proposed introduction of a greenhouse emissions trading scheme (ETS) in Australia will present some particular challenges and opportunities for Australian agriculture, irrespective of whether businesses in the sector become direct participants in the ETS, or remain non-participants but need to manage the higher farm input costs and other changes that the ETS will inevitably bring.

The research reported here was commissioned by Land and Water Australia, and aims to consider some of the implications of the ETS for farm businesses, and then to identify the key information and research needs that the sector will have to address in order to respond to the challenges and opportunities the ETS will present.

Full Report
October 2008, pp. 1 - 62 (62 pages)
Publisher: Australian Farm Institute
Author: Australian Farm Institute - Keogh, M

ISBN: 978-0-9805475-5-5-9


Some Impacts on Agriculture of an Australian Emissions Trading Scheme

The Australian Government proposes to introduce a national greenhouse emissions trading scheme which will commence in July 2010. In its initial stages, the scheme will require firms that directly emit more than 25,000 tonnes of carbon dioxide equivalent per annum to be participants, and to purchase government-issued emission permits equivalent to their estimated annual greenhouse emissions.

Transport fuel distributors will also be required to be participants, and will be responsible for the emissions estimated to be created when the fuel they sell is combusted.

Farm businesses will not be required to directly participate in the scheme in its initial years. The government has announced that the earliest that farm businesses might be required to participate in the scheme will be 2015, with a final decision to be made in 2013. The announcement of this timetable for decisions concerning farm business participation might lead to a sense of complacency about both the potential impact of the scheme on farm businesses, and the need for decisions about future farm participation. On both counts, it seems the complacency may be mis-founded.

Firstly, the fact that farm businesses are price takers in global markets and consumers of a wide range of inputs – many of which are energy or energy-related – means that the indirect impact of energy-price increases will directly impact on farm profitability, irrespective of farm-sector participation. Secondly, if farm businesses are to become scheme participants, administrative decisions will need to be made well in advance of 2013 in order for this to occur.

For these reasons, the research reported here provides critical and timely information that will assist the farm sector and policy-makers in future decision-making processes relating to this most challenging issue.

The research was commissioned before the Australian Government released its White Paper, specifying the preferred design of the national emissions trading scheme, and it therefore does not precisely model the potential impacts of those proposals on the farm sector. However, the scenarios modelled in this research are sufficiently close to the White Paper proposals such that the results of the analysis reported here are very relevant to considerations about future potential impacts of the scheme on farm businesses.

It is hoped this research will assist both the farm sector and policy-makers in reaching robust and appropriate decisions about the future role of the farm sector in the national emissions trading scheme. The changes likely to arise from these decisions will be profound and long-lasting, and for that reason require very careful consideration and analysis.

This report provides the Australian agricultural sector and its associated commodity and regional sub-sectors with a strong understanding of the economic implications of a range of different greenhouse policy scenarios. Prepared for the Australian Farm Institute, Australian Wool Innovation, Dairy Australia and Cotton R&D Corporation by the Centre for International Economics, the research report adds valuable information to the debate on greenhouse gas emission policies. 

Full Report
February 2009, pp. 1 - 68 (68 pages)
Publisher: Australian Farm Institue
Author: TheCIE


The Australian Carbon Pollution Reduction Scheme - An Introduction for Farmers and Agribusiness

The first step in understanding Australia's CPRS is to gain an insight into the international agreement that Australia has committed to, because those agreements impose obligations on the nation which are reflected in the proposed design of the CPRS. Chapter 2 of the guide explains the history and key features of these international agreements, and their signifiance to Australian agriculture.

Chapter 3 explains the greenhouse emission accounting rules that Australia has adopted as part of the nation's compliance with the Kyoto Protocol. Chapter 4 provides details of Australia's greenhouse emissions, and trends in national emissions over the past fifteen years.

The main design features of the CPRS are detailed in Chapter 5.

How the Australian Emission Units (AEU), traded in a government created market, could be purchased and traded, which businesses get free AEUs, what defines an 'eligible' forest are outlined in Chapter 6.

There are some important potential ecomomic impacts of the proposed CPRS which the agricultural sector needs to consider and Chapter 7 details the results of economic modelling of these impacts. Chapter 8 provides some discussions of potential 'modes of engagement' for the farm and agribusiness sectors with the CPRS.

The high degree of uncertainty that currently exists  about both Australian and international climate policy makes it difficult to be too presciptive about taking early action, however there are number of actions that seems sensible, and these are outlined in Chapter 9.

For most Australians, discussions about an Australian emissions trading scheme are complex and confusing, and seem to have little real relevance to day-to-day life. For those involved in Australian farming and agribusiness, discussions are equally complex and confusing, but there is a growing realisation that the policies could have quite a significant impact on businesses in the sector.

This guide has been written to try and assist those involved in Australian agriculture to gain a better understanding of this issue, and to begin to prepare for what has the potential to be the biggest change seen in the sector for many decades. The scale of the potential changes the CPRS will bring about makes it very important that farmers and agribusiness participants understand how the CPRS will operate, and what it will mean for their businesses.

Full Report
September  2009, pp. 1 - 60 (60 pages)
Publisher: Australian Farm Institute
Author: Sally Davison &  Mick Keogh
ISBN 978-0-9806912-1-4 (Print)
ISBN 978-0-9806912-2-1 (Web) 


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