Agriculture doing all the work on reducing greenhouse emissions

Published 20170130

The Australian agriculture sector is almost entirely responsible for Australia meeting its international greenhouse emission commitments, with the sector being virtually the only economic sector to have reduced annual emissions since 1990, and also contributing more than 80% of the total emission reduction contracted under the Australian Government’s Emission Reduction Fund (ERF) auctions. Greenhouse emission abatement projects contracted under the ERF are now generating an estimated $239 million in annual revenue for Australian farmers. 

Under Australia’s international greenhouse emission reduction commitment, by 2030 annual emissions will need to be reduced by 26-28% of the emissions estimated for 2005. There are a number of different policies the government has introduced in order to achieve this target, which include the renewable energy target, motor vehicle emission controls, and the Emission Reduction Fund auctions which provides funding for successful emission reduction projects which utilise endorsed methodologies to achieve reduced emissions.

The government has conducted four ERF auctions to date, with the most recent being in November 2016. Around 80% of the emission reduction contracted under that program has been associated with projects carried out on farm land, with the largest share of these being vegetation projects. In total, ERF projects are now estimated to be reducing Australia’s net emissions by 177 million tonnes CO2-e per annum.

Based on the reported results for the four ERF auctions, rural landholders are now generating approximately $239 million in annual revenue from successful ERF projects. The projects are those classified under the vegetation, agriculture and savannah burning categories, all of which are predominantly carried out on farm land. That means that in annual revenue terms, greenhouse emission abatement generates more revenue for the farm sector that many of the traditional agricultural commodities. The cumulative revenue being generated in ERF projects from the four auction series to date is shown in the following graph.

But that is only part of the story of the contribution of the agriculture sector to the Australian greenhouse emission target. 

In addition to the abatement being achieved by the ERF projects, the agriculture sector is the only sector of the economy that has substantially reduced annual emissions, a consequence of the bans imposed on land clearing by state governments throughout the 1990s and early 2000s. As can be seen in the following graph, virtually every other sector of the economy has increased emissions over the last twenty five years. 

Were it not for the contributions of the agriculture sector, Australia would have no chance at all of achieving its future emission reduction target. 

Those persistent critics of the environmental performance of the agriculture sector might like to take the above information into consideration next time they are tempted to refer to farmers as ‘environmental vandals’ ! There is also a lesson here for Governments, with a clear demonstration that farmers will happily cooperate in providing public-good conservation outcomes if provided with the right incentives, as was discussed at length in a recent edition of the Farm Policy Journal. 

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