On 15 Nov the Government agreed to a key Coalition amendment on excluding agriculture from the carbon pollution reduction scheme. However, details of this exclusion remain unclear. Organisations such as GrowCom and the National Farmers Federation are asking for clarification as to how farmers will be able to offset their emissions.
In the ABC “Insiders” interview the Minister for Climate Change and Water Penny Wong stated that farmers could still be part of the solution and that the Government will allow farmers to benefit by generating carbon credits.
From Minister Wong’s statements, it is clear that the Government is agreeing to this exclusion only to convince the opposition to support the Carbon Pollution Reduction Scheme (CPRS) and not because they are convinced that Agriculture should be excluded on the basis of research and economics.
My view is mixed in this issue: in one hand, I certainly agree that there is little research that can support either inclusion or exclusion of agriculture on the scheme. I agree that inclusion in the ETS without any supporting regulatory and economic framework would place farmers in (greater) disadvantage with international competitors. Further, other governments have placed agriculture in the “too hard” basket too.
However, I am hoping that with agriculture out of the ETS, the required research to prepare farmers for a climate-challenged future will not drop out of the priorities list.
Innovation and R&D required to decrease carbon footprints in agriculture (or, if you are a skeptic, innovation needed to increase farm efficiency and decrease farms dependency on non-renewable energy) is at risk of not being developed.
If this occurs, agricultural producers will still be affected when other larger emitters in agricultural supply chains (e.g. packaging, transport, retail) transfer the costs of mitigation and adaptation to growers, instead of (or as well as) passing these costs to consumers. Given the perceived concession that the Government has made in excluding agriculture,it will be difficult to justify measures that lessen the impact of ETS costs passed onto farmers.
Innovation in the following areas is still needed:
-Smart irrigation. A report by Access Economics estimated that an investment of $200 million would be sufficient to introduce intelligent technologies in all the Murray Darling Basin irrigation areas. The expenditure was assumed to be spread evenly in a 5-year period (e.g. 2009-2014). The authors estimated that this investment could lead to savings of 15% per hectare, representing a net increase in GDP of $108 million by 2018. At a discount rate of 7%, the net present value (NPV) of the investment would range from $428 million to $530 million in the period 2009-2018. Further, it was estimated that the uptake of smart technologies for irrigation would create 800 new jobs by 2016.
-Anaerobic digestion of agricultural and food waste. AD harnesses the natural bacterial decomposition of organic waste in the absence of oxygen to produce biogas and digestate, an organic composting material that can then be reused in agriculture as a fertilizer and soil conditioner. The UK has now a goal of establishing AD as a key technology to reduce the environmental impact of food and agricultural waste. For examples of application in agriculture, check the DEFRA website here.
-Cogeneration/Trigeneration. Cogeneration and trigeneration systems (CHP and CCHP, respectively) combine heat and power (in the former) or are integrated with a thermally driven refrigeration system to provide cooling as well as electrical power and heating (in the latter). CHP plants are currently available in a variety of capacities and can use a variety of fuels such as coal, light fuel oils, natural gas, waste fuels and solid or gaseous biomass. Research on the uptake of these technologies in farms and the use of biofuel or other alternative energy sources to power cogeneration and trigeneration systems is still needed.
-Photovoltaics (PV) and solar energy. Common applications in farms include space and water heating, greenhouse heating and crop drying. These and other applications (e.g.water pumping, electrical fencing, lighting and cooling/heating) can make a significant difference in the operating costs of vegetable farms. It is estimated that in 2007, the emissions avoided through the use of solar plants in Australia were 1,052,261 tonnes CO2-e, from a total collector area of 5,753,000 sq m installed around the country. While the government allocated $1.35 billion to part-fund construction of up to four solar power stations generating as much as 1000MW each in the 2009-10 budget, $2 billion are to be spent in carbon capture and storage (CCS) technology, even though it is predicted that CCS will not be commercially viable until 2033.
-Carbon footprints at primary producer level.If Australian supermarkets adopt carbon labelling, suppliers will have to declare their contribution to the total carbon footprint. Growers would then compete not only in price and quality, but also in environmental impact. Those with operations that minimise contributions to a productâ€™s carbon footprint could be selected as preferred suppliers over non-compliant/high environmental impact competitors.