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Research Reports

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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



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The New Challenge for Australian Agriculture- How Do You Muster a Paddock of Carbon

While the exact design of an emissions trading scheme is yet to be developed, sufficient information is known to be able to predict, with some certainty, that farm input prices will increase, particularly fuel and electricity, and a wide range of other energy-price sensitive inputs will also increase in price, including chemicals, freight and contracting costs. The result will be a reduction in the international competitiveness of Australian farming.

There are, however, potential opportunities that may arise for the farm sector to provide greenhouse offsets, which may generate income to counteract the anticipated additional costs. To have these offsets recognised within a national emissions trading scheme will, however, require concerted action by farmers and their leaders over the next year.

This discussion paper has been prepared with the objective of providing Australian farmers with a comprehensive collection of relevant information about this issue, so that farmers can participate fully in forthcoming debates and ensure Australian agriculture’s international competitiveness is retained.

The implementation of a greenhouse emissions trading scheme for Australia by either 2010 or 2012 (depending on the outcome of the next Federal election) presents potential challenges and opportunities for Australian farmers and the wider agriculture sector.

Full Report
July 2007, pp. 1 - 60 (60 pages)
Publisher: Australian Farm Institue
Author: Keogh, M
ISBN: 978-0-9803460-3-9


The Implications for Australian Agriculture of Changing Demand for Animal Protein in Asia

What Australian agriculture should do to take full advantage of these changes is the main question that is addressed in this report. For a resource-constrained agriculture sector such as Australia’s, there will not always be easy opportunities to increase the volume of output. An important question is how the sector can best maximise the value that it extracts from emerging opportunities. By stimulating thinking and discussion on these issues, it is hoped that this research might act as a catalyst in the development of policies that best equip Australian agriculture to take advantage of these opportunities.Amidst all the changes that have occurred globally in agriculture over recent decades, one truism that seemingly remained constant was that over the longer term, the price of agricultural commodities continues to decline in real terms. However, recent developments have led many forecasters to suggest that this may no longer be the case, and that fundamental changes in agricultural markets will have long-term consequences and drive sustained increases in prices.

Whether or not such projections prove to be correct is yet to be seen, but there is no doubt that changes in food demand, as wealth increases in developing nations, and aggressive national biofuel policies are placing considerable upward pressure on global agricultural commodity prices. They will continue to do so for the foreseeable future.

Full Report
October 2007, pp. 1 - 92 (92 pages)Publisher: Australian Farm Institute
Author: Dalton, G, Keogh, M
ISBN: 978-0-9803460-7-7


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


Agriculture, Greenhouse and Emissions Trading Summit Proceedings

Presentations at the Agriculture, Greenhouse and Emissions Trading Conference 2008 include:

An Australian Emissions Trading Scheme, Blair Comely 
Economic Implications of the ETS, Brian Fisher  
Emissions Trading in Agriculture: A Canadian Perspective, Cher Brethour and Maria Klimas  
Address by the President of Federated Farmers of New Zealand, to the Australian Farm Institute  Charlie Pedersen
Future International Developments in Climate Change Policy, and in Particular the Likely Future Situation of Developing Nations David Crombie   
A National Climate Change Research Strategy for Primary Industries (CCRSPI) Michael Robinson  
Mitigation Technologies for Agriculture – Now and in the Future, David Whitehead
Measurement Issues and Mitigation Options – Land Use, Beverley Henry, Ian Johnsson, Grant Fraser, John Carter and Steven Bray  
Greenhouse Emissions from Livestock and Fertiliser and Implications for a National Emissions Trading Scheme Richard Eckard, Chris Grainger, John Graham and Traci Griffin

The first Agriculture and Greenhouse Emissions Trading Summit was held in Queensland in April, 2008. The Summit brought together a wide cross-section of people involved in agriculture, agribusiness and agricultural policymaking to discuss the complex and wide-ranging issues for agriculture associated with the proposed introduction of a national greenhouse emissions trading scheme.

The Summit was made possible through the generous sponsorship of Rabobank and Ridley Corporation, and their support is gratefully acknowledged. 

Full Report
May 2008, pp. 1 - 64 (64 pages)
Publisher: Australian Farm Institute
Author: Australian Farm Institute
ISBN: 978-0-9805475-3-5


Farm Policy Journal - Vol 5 No 4 2008 November - Full Journal

Emission impossible? agriculture’s role in emissions trading
November Quarter 2008, Volume 5, Number 4
Publisher - Australian Farm Institute


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) 


FPJ0604 Article - Agriculture, Carbon Trading and Border Tax Adjustments Under International Trade Rules

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Farm Policy Journal, November 2009, Volume 6, Number 4,  pp. 31 - 41 (11 pages)
ecomarketing-ecolabelling-carbon labelling -BTA-climate change


Agriculture, Greenhouse and Emissions Trading Conference 2009 - Proceedings

The speakers and transcripts included in this report are:

The Australian Government’s Carbon Pollution Reduction Scheme, and the role of agriculture. Anthea Harris. Australian Government Department of Climate Change.

Some economic implications of the CPRS for Australian agriculture.David Pearce. Centre for International Economics.

The impact of the CPRS on the energy sector. Paul Balfe. Acil-Tasman.

Implications of the CPRS for Australian meat and dairy processors.Robert Poole. Murray-Goulburn.

Emission accounting: What are the international rules applicable to agriculture? Ian Carruthers. Australian Government Department of Climate Change.

The views of the environment sector concerning Australia’s CPRS and the role of agriculture. Paul Toni. WWF-Australia.

Sequestration options: the future role of carbon sink forests under the CPRS.
John Stanton. A3P Australia.

Agricultural sequestration and mitigation: what are the realistic options for ruminant livestock? Roger Hegarty. NSW Department of Primary Industries.   

Agricultural sequestration and mitigation options: what are the realistic options for soil sequestration? Evelyn Krull. CSIRO Land and Water.

How can agriculture be included in an emissions trading scheme? Some thoughts from New Zealand. Suzi Kerr. MOTU Economics and Policy Research.

The ‘Point of Obligation’ question: Should processors or farmers be made responsible for farm-level emissions in Australia? Tom McGuire, Teys Brothers.   

The voluntary soil carbon market in the USA. Is this a viable model for Australia?
David Miller. Iowa Farm Bureau and Agragate Climate Credits Corporation.   

The 2009 AGET conference took place on the 6th and 7th of May 2009 in Maroochydore, thanks to the sponsorship of the National Climate Change Research Strategy for Primary Industry (CCRSPI).

This report includes the speakers presentations transcripts as well as the panel discussions transcripts. It covers the topics related to climate change and agriculture especially in Australia after the publication of the withe paper of the CPRS.

Full Report
May 2009, pp. 1 -114(114 pages)
Publisher: Australian Farm Institute
Author: Australian Farm Institute
ISBN- 978-0-9806912-8-3 (Web)
ISBN- 978-0-9806912-7-6 (Print)


The Implications of Greenhouse Mitigation Policies on the Demand for Agricultural Land

As Australia moves towards the implementation of policies to reduce greenhouse gas emissions, much attention has been directed towards the potential for carbon sink forestry to provide significant amounts of greenhouse gas sequestration, at a relatively modest cost.

While providing immediate sequestration and potential revenue for landholders, there are also some potentially negative aspects of an expansion of carbon sink forestry that require careful consideration.Residents in regions where plantation forestry has already occurred cite adverse socioeconomic impacts arising from large areas of plantations being established on farm land. Concerns have also been expressed about potential negative environmental impacts such as increased bushfire risk, changes to biodiversity, and reductions in water runoff.

Whether or not these impacts might arise in regions where future carbon sink forestry is concentrated will depend very much on the policy framework that is adopted by government to manage this issue.

The research reported here has involved an exploration of these issues, firstly from the perspective of the potential future scale of carbon sink forestry, and then from the perspective of the policy and approvals framework which will determine how carbon sink forestry develops in Australia in the future. It highlights that there is a need for further consideration of this issue and the development of appropriate policy if some of the potential adverse impacts are to be avoided.

The Implications of Greenhouse Mitigation Policies on the Demand for Agricultural Land
  is a compelling review of the existing research and results regarding the possible impacts of carbon sink forestry. The topics covered are:
  • Current scale and rate of land use change
  • Models of potential agricultural land use changes arising from greenhouse mitigation policies
  • Potential impacts of carbon sink plantation developments
  • Carbon sink plantation approval processes
This report constitutes a needed reference for any further research on the topic and outlines the need of consistent policies and approval processes.

Full report
October 2010, pp. 1-116 (116 pages)
Publisher: Australian Farm Institute
Authors: GHD Hassall
ISBN 978-1-921808-04-3 (Web)
ISBN 978-1-921808-03-6 (Print)


The Implications of the Australian Government's Carbon Farming Initiative for Beef Producers

The CFI legislation will create a regulated marketplace for farm sequestration and mitigation activities, and farmers who voluntarily participate will earn offset credits which will be able to be sold to businesses that with to use those to reduce their total business emissions, or to claim carbon-neutrality for their products. In many respects, carbon offset production will for some farmers become one extra enterprise option available, bringing with it additional revenue and additional costs, new decisions about how to physically integrate the enterprise into a farm business, and the need for farmers to manage this enterprise in a way that adds to total farm profitability.
The Carbon Farming Initiative (CFI) has been proposed by the Australian Government as a legislated mechanism that will enable farmers to generate revenue from the sale of greenhouse gas sequestration and mitigation activities.

The introduction of a carbon offset market for farms will have significant long-term implications, and will entail both opportunities and risks for farm business managers. The research detailed in this report is an initial attempt to gain some understanding of the issues the farm sector and individual farmers will need to consider as this new farm enterprise emerges.

This report was prepared with funding from Meat & Livestock Australia.

Full report, pp 1-30 (42 pages), April 2011
Australian Farm Institute
Authors: Davison, S, Keogh, M
(Web) ISBN 978-1-921808-09-8
(Print) ISBN 978-1-921808-08-1


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