1. Government-Business Climate Change Dialogue
Report to the Commonwealth
Government by the Agriculture and
Land Management Working Group
Implications of Climate
Change and Greenhouse
Policy for Rural and
Regional Australia
2003
2.
3. 1
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
The agriculture, forestry and land management sector has participated in the Commonwealth Government’s
Climate Change Forward Strategy. Over the past fifteen years, successive Commonwealth, State and Territory
Governments have focused their greenhouse efforts on reducing greenhouse emissions in the energy,
manufacturing and transport sectors. Technologies required to engage with these sectors continue to develop,
and the mostly point-source nature of emissions of greenhouse gases from these industries can be readily
identified and addressed.
The agriculture, forestry and land management sector has an entirely different set of circumstances.
Enterprises in this sector cover more than 60% of Australia’s land mass; emissions of greenhouse gases are
varied and diffuse; and little research has been done on this issue in relation to different types of agriculture
and different regions. The bottom line is that a vastly increased research effort is needed to enable the
agriculture, forestry and land management sector to respond to greenhouse and climate change challenges.
The overriding objective of the agriculture, forestry and land management sector is to ensure that policies to
reduce greenhouse gas emissions do not impose unfair and unacceptable costs on our industries, and the
sector is not disadvantaged now and in the future. Agricultural and forestry industries must not be penalised
relative to other industries in Australia or disadvantaged through the implications of greenhouse policy on trade.
At the same time, Australian climate change policies should seek to create opportunities for the agriculture,
forestry and land management sector to contribute through “win-win” outcomes that may come from a range
of sources. The critical issue is that agriculture simply does not have the knowledge at this time to plan
responses. The issue is not that the required knowledge is not accessible to the farmer and land manager
at the appropriate enterprise or regional scale – but that for the most part it simply does not exist.
Further, when the required research is progressed to a point at which it can inform farmers’ and land
managers’ decisions on responses, research outcomes need to be subjected to rigorous cost-benefit analysis
before they can be applied.
The time has arrived for all governments and the agriculture, forestry and land management sector to engage
directly and actively address the challenges of climate change and greenhouse. Only in this way can all sectors
within Australia become part of a truly national approach. It may be that the most sensible strategic response
for agriculture will come from focusing research and investment on climate change adaptation than from
minimising greenhouse gas emissions.
I would like to recognise the contribution of all of the members of the Working Group in the formulation
of the content of this report. I would also like to acknowledge the work of the Australian Greenhouse Office
and Agriculture Fisheries and Forestry – Australia who provided technical advice to the Working Group as required.
FOREWORD
4. 2
The recommendations in the report focus on four areas: Commitment and Partnerships in Agriculture,
Forestry and Land Management; Emissions and Sinks; Impacts and Adaptation; and Continuing Industry
Engagement. These recommendations provide a basis for developing an effective way forward. They
represent a first major step for the agriculture and land management sector to address the challenges of
greenhouse and climate change.
I commend this report to the Commonwealth Government.
Anna Cronin
CEO, National Farmers’ Federation,
Chair, Agriculture and Land Management Working Group
5. 3
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
In August 2002, the Australian Government announced the development of the Climate Change Forward
Strategy. The purpose of this Strategy is to provide an effective national response to greenhouse and
climate change.
The Climate Change Forward Strategy is based on a twenty to thirty year vision with the requirement
of maintaining a strong and internationally competitive economy with a lower greenhouse signature.
The Government invited the Agriculture and Land Management Sector to develop a response that
addresses the needs of the sector.
Australia’s agriculture, forestry and land management interests are exposed to the impacts of climate change.
Compounding our risk exposure, the agriculture sector is not currently equipped with sufficient detailed
information about the impact of climate change on different regions and different types of farming activity.
Given the extent of this vulnerability, there is an urgent need to enhance understanding of the likely impacts
of climate change at a scale relevant to sectors and regions. There is also an urgent need to understand the
social, economic and biophysical implications of climate change on this sector and to develop adaptive
responses accordingly.
Agriculture and forestry play crucial roles in Australia’s economic, environmental and social prosperity.
They are the life-blood of rural and regional communities and directly employ nearly 500,000 people.
Agricultural exports represent a quarter of Australia’s total merchandise exports.
Under its current accounting framework, the Government estimates that the agriculture, forestry and land
management sector generates about one-third of national greenhouse gas emissions. Agriculture is made up of
over 140,000 individual enterprises spread across more than 60% of the continent. Emissions of greenhouse
gases from agriculture are highly variable in space and time, and are difficult and expensive to measure.
There are major gaps in the scientific and technical knowledge relating to agricultural management practices.
There are also significant gaps that limit understanding of the varied activity within the agricultural sector,
sources and rates of emissions and abatement opportunities and costs. Emissions of greenhouse gases are a loss
of valuable resources from the production base.
Forestry provides considerable opportunity to earn sink credits and to achieve other natural resource
management objectives. This appears to be a cost-effective means to abate greenhouse gas emissions in a way
that is readily measurable and accounted for through programs such as the National Carbon Accounting System.
The extent to which this opportunity can be realised depends on the establishment of market incentives.
The Agriculture and Land Management Working Group analysed issues relating to greenhouse and climate
change in the main agricultural commodity and forestry and vegetation sectors in Australia. It also analysed
the key cross-cutting issues relevant to agriculture, forestry and land management as a whole.
Currently, there is a dearth of Commonwealth greenhouse policies, programs or research targeting either
abatement in the agricultural and land management sectors or the risks these sectors face from climate change
impacts. This is in stark contrast to the substantial number of programs focusing on the energy, industry and
transport sectors. The forestry sector is also further advanced than agriculture. The differences between sectors,
in terms of how far advanced they are, has led to a gross disparity in the capacity to adapt to critical issues
within the agriculture and land management sector relative to other industries. This disparity must be corrected.
The agriculture and land management sector needs to understand the exact nature of the threats and
opportunities it faces from climate change in terms of:
• the exact nature of the sector’s emissions across the full range of diverse enterprises and locations which the
sector comprises;
SUMMARY AND
RECOMMENDATIONS
6. 4
• the nature and extent of the sector’s vulnerability to the impacts of climate change in ways that reflect the
scope of exposure to the impacts. In particular an understanding of the sector relative to other industries is
required. This understanding should respect the differences across Australia’s catchments and regions and
their unique environmental, social and economic characteristics;
• the nature and extent of the sector’s exposure to current and potential future national responses to the issue.
This understanding should encompass domestic and international competitiveness, international
agreements, rules and protocols, and trade;
• the costs to the agriculture sector measured against the benefits of agricultural industry greenhouse
emission abatement strategies in minimising climate change.
The Agricultural and Land Management Working Group therefore submits the following recommendations
to Government. The recommendations are divided into two sections, reflecting the fact that the forestry sector
is relatively well placed to capitalise on sequestration and potential market opportunities. This is due to both
the nature of forestry and the fact that it has the benefit of considerable research behind it. The first set of
recommendations relates to the shared needs of both agriculture and forestry, while the second set is specific
to the forest industries.
The significant additional research, which the agriculture sector requires before any development of policy occurs,
must be funded by the government. Government contributions to greenhouse research and development should
not be funded from compulsory industry levies. Agricultural levies are supported to fund research and activities
designed to maximise the present and future returns of the industries. Requiring levy funds to be diverted to
investment in greenhouse research as matching funds, when this is a government and not industry priority,
would represent the effective double-taxation of agricultural industries. This would turn an aspect of the
compulsory industry levy into a Government tax to fund government priority research.
7. 5
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
1. Commitment to support on-going collaboration with the Agriculture,
Forestry and Land Management sector
1.1 The Commonwealth Government should commit to researching and addressing the specific and
unique greenhouse and climate change issues of agriculture and land management at the enterprise
and local levels. Commonwealth, State and Territory Government policies should be coordinated
to ensure a consistent national framework.
1.2 Greenhouse and climate change policies should be aligned and fully integrated with other natural
resource management policies, such as policies in the areas of resource security, environmental
sustainability and farm management systems.
1.3 The Commonwealth should establish and support a mechanism for engaging with the agriculture,
forestry and land management sectors to address the specific and unique greenhouse and climate
change research issues for rural and regional Australia.
2. Impacts and Adaptation
2.1 Improve precision and resolution of climate change projections at local levels across Australia and assess
the vulnerability of enterprises and regions to the impacts of climate change (including impacts on
international competitiveness).
2.2 Enable agriculture and forestry to adapt to climate change (adaptive capacity) by increasing the capacity
to accurately forecast weather and climate variability in the short and medium terms, by planning and
implementing responses to enable vulnerable enterprises and regions to adapt to climate change
(adaptive responses) for economic, environmental, social and regional benefits.
3. Emissions and Sinks
3.1 In partnership with industry, research the feasibility of programs to reduce greenhouse gas emissions
from agriculture, forestry and land management.
3.2 Undertake research to increase understanding of key greenhouse gases produced by agriculture, forestry
and land management; identify fundamental processes of emissions and factors affecting rate and
magnitude of these emissions; develop and communicate cost-effective options for delivery of reduced
emissions and increased sequestration; and implement improved management practices that deliver
greenhouse and multiple benefits to enterprises, industry and regions - for economic, environmental
and social benefits to industry and regions.
4. Continuing Industry Engagement
4.1 Government should support and commit to continued engagement with our sector to ensure
dissemination of information and to address challenges and opportunities for agriculture, forestry and
land management in responding to climate change.
4.2 Continue to identify and advocate needs and interests of agriculture, forestry and land management to
inform Australia’s position for international negotiations on greenhouse and climate change.
AGRICULTURE AND FORESTRY
RECOMMENDATIONS
8. FORESTRY
RECOMMENDATIONS
1. Governments at all levels work to achieve multiple benefits by intersecting climate change response
strategies with ongoing reforms in natural resource management.
2. Commonwealth consider the benefits of market-based mechanisms for delivering cost-effective abatement
to meet the national 108% emissions target, and the contribution from voluntarily trading sequestration
credits from eligible forest-based sinks projects.
3. Commonwealth consider facilitating trading mechanisms between Australian businesses,
particularly forest enterprises and emerging markets in Kyoto-block countries and the USA.
4. Commonwealth establish common recognition rights to sequestration credits registered under
state-based regimes in reporting national accounts.
5. Commit to ongoing research and development programs, including the CRC for Greenhouse Accounting
and National Carbon Accounting System (NCAS). Additional work to focus on “missing sources and
sinks”. This should include woody encroachment and vegetation thickening on private lands; fuel
management and wildfire in native forests; and salvage of forest residues for renewable energy. Research
also directed towards identifying appropriate locations for establishing effective, multi-purpose forest sinks.
6
10. 1.0 INTRODUCTION
1.1 Working Group on Agriculture and Land Management
The Government-Business Climate Change Dialogue was established in August 2002 during roundtable
discussions between the Commonwealth Government and business leaders on the development of the
Climate Change Forward Strategy (CCFS) for Australia.
The Government-Business Climate Change Dialogue provides the opportunity for the business sector to:
• identify key strategies to reduce Australian industry’s potential exposure to the impacts of greenhouse
response, in particular through the uptake of emergent technologies;
• enable Australia to cost-effectively meet its target of (net) 108% of 1990 emissions during the first
commitment period 2008-2012 and contribute to effective long term action;
• take into account the benefits and costs of any national, regional or sectoral impacts of climate change.
The Government sought to engage industry in a consultative process that would guide the development of
future greenhouse policy. A committee structure was established to support the development of industry
advice. The structure comprised five Working Groups and a Steering Committee. One Working Group
addressed agriculture and land management.
Agriculture and Land Management Working Group Members
Anna Cronin (Chair) National Farmers’ Federation
Paul Cristofani
Michael Potter
Kate Carnell National Association of Forest Industries Ltd
Phil Townsend
Karen Curtis Australian Chamber of Commerce and Industry
David Rynne
Nick Drew Fertiliser Industry Federation of Australia
Bruce Lloyd Australian Landcare Council
Richard Stanton Plantation Timber Association of Australia
(later resigned and replaced by Keith Lamb)
Rod Bristow 2020 Vision on Behalf of PTAA
Keith Lamb Hancock Natural Resource Group Australia Pty Ltd
On behalf of the Plantation Timber Association
Mark Ritchie Cattle Council of Australia
Mathew Munro Grains Council of Australia
David Ugalde (Secretary) Australian Greenhouse Office
Ian Carruthers (Adviser)
Holly Ainslie (Research Support)
Peter Thomas (Adviser) Agriculture, Fisheries and Forestry – Australia
8
11. 9
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
1.2 Industry Profile and Emissions Trends
The agriculture, forestry and land management sector plays a crucial role in Australia’s economic, environmental
and social prosperity. It is integral to the vitality of rural and regional communities, employing nearly 500,000
people. Australian agriculture is highly efficient and occupies a significant place in global rural trade.
The value of agricultural output is around $AUD 30 billion annually, with about 65% of this exported.
In 2000/2001, agricultural exports represented a quarter of Australia’s total merchandise exports. The forest
and timber industry (based on native and plantation forests) has a gross annual turnover of approximately
$AUD 16 billion, with exports valued at around $AUD 1.6 billion annually.
Agriculture has a number of complexities that have acted to inhibit the development and implementation
of abatement measures. These include the high number of individual enterprises (over 140,000 across more
than 60% of the continent), and the large variety of production systems and significant regional disparities.
Emissions of greenhouse gases from agriculture, forestry and land management are highly variable in space
and time, and are difficult and expensive to measure. In addition, there are major gaps in the scientific and
technical knowledge relating to agricultural management practices, sources and rates of emissions, and
abatement opportunities and costs.
The agriculture, forestry and land management sector is atypical in that emissions derive from both point and
diffuse sources. This is in contrast to other emission-intensive sectors, such as energy, where there are relatively
few emission sites, and the relationships between energy generation and emissions can be estimated accurately.
In the forestry subsector, carbon is drawn from the atmosphere (sequestered) and stored in woody biomass
during the life of the tree and is emitted in response to forest harvesting activities. After harvest, a portion of
the sequestered carbon is transferred to wood products: this portion can be stored for the life of the product.
For building and construction materials this may be 50-100 years. For furniture there may be a 20-30 year
lifespan and paper products may last around 1-5 years. The area of plantation forests continues to increase
at a rate of around 80,000 ha per year and the subsector is a net sink for greenhouse gases because more
greenhouse gases are absorbed or embodied in wood and other vegetation than are emitted to the atmosphere.
Plantation forests offer a cost-effective means of greenhouse gas abatement that is now readily measurable and
accounted for through the National Carbon Accounting System (NCAS).
1.2.1 National Emissions and Current Accounting Inventory
The Australian Greenhouse Office annually publishes a National Greenhouse Gas Inventory, reporting emissions
from sources and uptake of carbon dioxide in vegetation and soil sinks. Projections of future emissions are
also published on a regular basis. The National Greenhouse Gas Inventory is constructed according to
international rules set under the United Nations Framework Convention on Climate Change. The current
rules exclude accounting of a number of on-farm processes and management actions, particularly in relation to
vegetation management and changes in vegetative cover. The limited definition of the current international
accounting rules means that the full equation on carbon flows and stocks in agriculture and land management
– from the full range of vegetation changes - is not fully accounted. This may have significant implications for
our sector beyond the first Kyoto commitment period. These issues are discussed in detail under Needs in
Section 2.3.3.
In discussing National Emissions and the Current Inventory it should be noted that the estimates for
agriculture have very large measures of uncertainty attached to them, even at the national level. While the
figures quoted have been used to inform this paper, a clear theme throughout this document will be the
urgent need to develop a better understanding of emission and sink processes at the regional and site-specific
scale. Significant policy development cannot occur until the level of understanding has been significantly
improved. The degree of uncertainty is demonstrated below in Table 1.
12. 10
Table 1. National Greenhouse Gas Inventory 2000 – Agriculture Sink and Source Estimates
>* Uncertainty reported at 95% confidence limits
Despite these shortcomings and enormous uncertainties with greenhouse accounting, it is known that emissions
from agriculture are mostly in the form of methane and nitrous oxide. When the energy and non-energy
emissions related to agriculture are added (eg livestock and crop related emissions, land use change, energy
use, freight transport etc), the government estimates that agriculture accounts for about one third of national
emissions (GWA&ES, 2002). The majority of these emissions are from livestock and land use change (land
clearing), with emissions from land use changes varying considerably between States and Territories. In the
absence of abatement measures the government anticipates that agriculture emissions are projected to reach
96 Mt CO2-e on average in 2008-12, an increase of 5% on 1990 emissions of 91 Mt.
It is important to note that emissions from land-use change (deforestation) have declined strongly from
107 Mt in 1990 to 61 Mt in 2000, reflecting changes in land management practices over the decade.
Under the international rule associated with Australia’s Kyoto target (emissions at 108% in 2008-12 relative to
1990), new forest plantings since 1990 are credited towards the target. These forest plantations are expected to
provide 21 Mt CO2-e of sequestration towards the Kyoto target (Fig. 1.1).
Greenhouse Gas Source and Uncertainty (%)
Sink Categories CH4 N2O NOx CO NMVOC
AGRICULTURE
A. Rice Cultivation
1. Irrigated -19 to +21
B. Agricultural Soils -56 to +120
1. Direct Soil Emissions -54 to +118
2. Animal Production -91 to+340
C. Prescribed Burning of Savannas -64 to 118 -68 to +129 -67 to +135 -65 to 121 -63 to +124
D. Field Burning of Agricultural Residues -36 to +47 -39 to + 50 -36 to +49 -36 to +49
1. Cereals -44 to +65 -46 to +68 -43 to +63 -44 to +63
2. Pulse NE NE NE NE NE
3. Tuber and Root NE NE NE NE NE
4. Sugar Cane -48 to +64 -47 to +71 -50 to +70 -48 to +66 -48 to +63
13. 11
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
Figure 1.1. Government view of total net CO2 -equivalent emissions by sector, 2000
The current rules and reporting practices that the government has agreed to use for the National Greenhouse
Gas Inventory, provide only a partial account of changes in greenhouse gas emissions across the varied
continental land systems. Reporting covers mainly agricultural production emissions (predominantly livestock
production and cropping systems), deforestation and forest plantations.
The new National Carbon Accounting System (NCAS) developed by the Commonwealth Government
provides a potentially comprehensive framework for fine-scale accounting of land systems on a comprehensive
basis. To date it has achieved the capability of providing an estimate of greenhouse accounts (emissions and
sinks) for forest plantation activities, with outputs available at any scale (ie project, regional or national).
Future development of the NCAS may progressively provide accounting capability for grazing lands,
crop lands and broader forest management.
However, again it must be stressed that while the framework provided by the NCAS may offer some potential
value in assisting decision-makers in agriculture in the long term, the System is currently an ‘empty box’ without
extensive further agriculture-specific research to provide the necessary data needed to make it useful for farmers.
In respect to the need for significant further work and research, the NCAS can also offer a framework that
could ensure much better integration of broader socio-economic and natural resource management issues
(such as salinity, water quality and quantity, and acidification). Many of these NRM issues are, and can be
expected to be, more pressing and immediate for farmers than those raised by greenhouse. In this respect it is
imperative that greenhouse considerations are integrated into the existing context of the NRM (and socio-
economic) issues that farmers deal with, rather than trying to manage the issue as if it was in isolation.
The current international rules limiting inventory reporting reflect a difficult evolution in the treatment of
land activities in both international and domestic climate change policy. This is due to weaknesses in the
ability to measure emissions from land systems and conflicting positions between countries in international
climate change negotiations. The tide is moving toward comprehensive greenhouse accounting of land
systems, and it is important that Australia is equipped to respond effectively and that this capacity is accessible
to farmers and other land managers.
-50
0
50
100
150
200
250
300
Stationary
Energy
Transport Fugitive
Emissions
from Fuel
Industrial
Processes
Agriculture Forestry Land Use
Change
Waste
CO2-e(Mt)
14. 12
1.3 The Influence of a Changing Climate on Agriculture and Forestry
Climate variability is a natural part of Australian agriculture, and it strongly influences productivity and
sustainability. Australian agriculture has become highly diverse in response to regional climate differences and
climate variability. For example, high value cropping and horticulture have expanded into drier districts with
water supply controlled by irrigation from surface or subsurface sources. Beef cattle grazing has expanded into
rangelands where rainfall is unreliable or insufficient for cropping. And dairying has grown in the high rainfall
zone. However, climate change may expose the agriculture, forestry and land management sector to
additional risks from changed temperature and rainfall patterns.
Climate change projections by CSIRO (2001) suggest that the changes may not be uniform across Australia.
The major agricultural and forestry area forecasts suggest there will be an overall increase in temperature, more
extreme hot days, fewer extreme cold days, an overall drying trend and greater variability in rainfall.
Atmospheric moisture balance, the difference between potential evaporation and rainfall, is already an
important issue for many subsectors.
The CSIRO modelling of potential evaporation and rainfall suggests increased moisture stress over much of
Australia. Average decreases in moisture balance range from about 40 to 120 mm per 1ºC global temperature
rise (Fig. 1.2a), with few production regions unaffected. These projections suggest that warming will place
significant pressure on Australian water resources.
Other possible impacts of climate change include increased diseases and pests; reduced milk yield; reduced
pasture quality; reduced plant and animal production; reduced fruit yield and quality through a reduction in
chilling temperatures; increased irrigation requirements and stress on plantations, forests and ecosystems.
Understanding of the possible impact of climate change is very uncertain at this stage. Therefore, greater
research is needed on the capacity of agriculture and forestry to adjust to the social, economic and biophysical
implications of climate change.
Figure 1.2. Annual moisture deficit across Australia (CSIRO, 2001).
(a) Average annual change (mm) in atmospheric (b) Area of land used for primary production.
moisture balance per 1ºC global-average warming.
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Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
1.4 Developing a Climate Change Strategy
While a significant body of work has been undertaken on greenhouse issues for forestry, it is a largely
unresearched issue for nearly all other industries within the agriculture and land management sector.
There are basic requirements for equipping the agriculture, forestry and land management sector as a whole to
address the abatement, impacts and adaptation issues of climate change. As stated at the outset of this report,
the agriculture, forestry and land management sector is unique relative to other sectors: enterprises and
their greenhouse emissions are highly dispersed across much of Australia’s land mass; emissions of methane,
nitrous oxide and carbon dioxide are varied; the sector can act as both a source of emissions and a sink; and
most of the sector will be exposed to the impacts of climate change to varying degrees.
There are major gaps in the scientific and technical knowledge relating to management practices, sources
and rates of emissions, abatement opportunities, and costs and benefits related to greenhouse in the sector.
In addition, the magnitude and rate of climate change, and therefore the risks associated with climate change
are also uncertain. There is an urgent need to improve knowledge about the capability of the sector to reduce
emissions, and the impact of reduced agriculture emissions on climate change needs to be better understood.
Furthermore, there is a need to identify potential impacts of climate change and to assess vulnerable
subsectors, catchments, or regions. Adaptive measures also need to be evaluated. Reductions in emissions
could provide the opportunity for increasing efficiency of resource use for economic, natural resource and
social benefits.
1.5 Conclusion
Developing and strengthening partnerships between governments, industry and regional communities
will improve dissemination of information relating to abatement, impacts and adaptation and will assist
in developing strategies to address these issues. Providing options for the agriculture, forestry and land
management sector to access targeted training will increase the industry’s level of understanding of
greenhouse issues, and is a key to any uptake of available technologies.
This report provides a vision within the 30 year time-frame consistent with the Climate Change Forward
Strategy (CCFS) and outlines the main recommendations that need to be delivered by the Commonwealth
government over the next five years.
16. 2.0 KEY ISSUES
2.1 Greenhouse Accounting for Land Systems
At this point, Australia does not have an operational capability to generate comprehensive greenhouse accounts
for all land systems. This is a major impediment to developing and implementing robust greenhouse policy
responses by farmers and foresters. It also stands in the way of integrating greenhouse outcomes with regional
economic development and sustainable farm and forestry management practices.
Reporting according to the current international greenhouse accounting rules means that only parts of the
land system are covered. For example, changes in grazing lands management (such as woody weed and
vegetation thickening), acid sulphate soils and salinity-affected lands are not covered. Similarly, there is a need
to better understand the role of emissions from, for example, fire occurrence in national parks and savannas.
Fundamental gaps in inventory accounting capability mean that land managers are restricted in their ability
to manage greenhouse emissions and sinks in the broader natural resource and socio-economic contexts.
They may even present perverse signals. This issue must be addressed urgently.
The National Carbon Accounting System provides excellent potential to achieve comprehensive capability to
produce greenhouse accounts (emissions and sinks) across all land systems. It is essential that the National
Carbon Accounting System continues to be developed as a priority to:
• underpin future policy judgments about the direction of future climate change policy affecting land
management systems. An early priority will be to decide whether Australia should adopt the allowed
additional sinks activities – grazing land management, cropland management and revegetation -
for the purposes of the 108% Kyoto target.
• provide practical analytical tools for decision-makers responsible for farm management, forestry and land
systems, to make choices about the best ways of delivering cost-effective emissions abatement and sink
generation outcomes at the local and regional level.
Research by the CRC for Greenhouse Accounting, RDCs and other research bodies should make an important
contribution to scientific understanding of greenhouse emissions in land systems. This understanding needs
to be made available to farmers and other land managers to inform their practical decision-making capacity.
Needs
1. The national accounting framework should have the capacity to recognise, measure and account for all
emissions and sinks activities as the driver for encouraging sustainable land management. This will enable
agricultural and forest land managers to be accountable for greenhouse gas emissions.
2. Further research is required to identify the total contributions from Australia’s vegetation management to
determine a national position for negotiating the carbon accounting rules to be applied post-2012.
3. Further consideration must be given to Australia’s national greenhouse accounts, including native forest
management as the means for ensuring that State and Territory governments provide adequate resources
to manage the public forest estate.
4. The Government should support a balanced response to vegetation management and ecosystems
maintenance, based on integrated accounting of all sources of greenhouse gas emissions and sinks sources.
This response should be linked to regional economic development planning and sustainable management
of natural resources.
14
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Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
2.2 Commodities Production
2.2.1 Extensive Livestock
Issues and Opportunities
• Lack of current capacity to assess emissions from different livestock enterprises
Some sources of greenhouse gas emissions from extensive livestock include methane from enteric
fermentation (feed digestion); management of rangelands and improved pastures (nitrous oxide, carbon
dioxide); land clearing (carbon dioxide); and savanna burning (methane, nitrous oxide, carbon dioxide).
There is very little information on the magnitude of these emissions and the sensitivity responses between
production systems, management options and the emissions profile. Such information is the starting point
for the industry to be able to engage in actions to reduce emissions. Accounting methodologies need to
be developed.
• Lack of current identified abatement options for enterprises
Government estimates that methane from enteric fermentation is the third largest single source of
greenhouse gas emissions in Australia (11.5%) behind electricity generation and road transport. Yet, there
are no realistic identified abatement options for extensive livestock enterprises. Much greater knowledge
is required on the effects of livestock management on abatement, including stocking rates, feed quality,
feed intake, animal traits and rumen ecology. This knowledge should also extend to species and strains of
methanogens in Australian livestock and potential biological control of the organisms generating methane.
Potential opportunities exist to adopt enterprise diversification and integration of on-farm agroforestry and
commercial forestry plantations within current farming and grazing practices. Abatement measures need to
be justified on the basis of the reduction in climate change.
• Sequestration options from improved rangeland management
In Australia, grazing of rangelands is the most extensive land use, and changes in rangelands management
could have a significant impact on the country’s carbon balance. There is major sink potential in reducing
and reversing rangeland degradation. Implementing management regimes may not only have NRM
and greenhouse benefits, but also may improve the long-term economic sustainability of the industry.
Implementing practices with positive carbon storage outcomes may be hampered by social,
cultural and economic factors.
For the purposes of the 108% Kyoto target, more research is needed on the costs and benefits of including
grazing land management as an eligible sinks activity.
There is considerable uncertainty surrounding the magnitude and reliability of rangeland sinks.
For the purposes of longer-term greenhouse policy, it is essential that Australia develop analytical
capability to identify the potential role of rangelands in greenhouse policy response.
• Opportunities to incorporate greenhouse into grazing and livestock management tools
Multiple benefits in productivity, economic return, environmental management and sustainability can be
achieved by incorporating greenhouse into management tools. Environmental Management Systems may
provide the framework for this, and continued involvement of producers in Landcare may enhance options
for addressing greenhouse issues.
• Partnerships in industry research and development
Partnerships between industry, governments, research funders and research providers are required to
address the national research priorities of emissions abatement and adaptation to climate change.
18. 16
Needs
1. A major national research program to properly inform Australia’s national greenhouse gas inventory.
Such a program should quantify the contribution of the extensive livestock industry to national greenhouse
gas emissions. It should also quantify increasing carbon sequestration and develop cost-effective methods for
the industry to reduce greenhouse gas emissions.
2. Research on mechanisms for implementing improved management practices to deliver reduced
greenhouse emissions and economic, social, NRM and regional benefits.
2.2.2 Intensive Livestock
Issues and Opportunities
• Lack of current capacity to assess emissions from different livestock enterprises (methane and nitrous oxide)
There is little detailed information on emissions or on sensitivity analysis between emissions and
management options, especially relating to the effect of both fertilisation and organic nitrogen sources.
• Assessment and audit of possible greenhouse outcomes from management actions needed – pasture
management, supplementary feed and feed additives, animal selection, waste management,
systems to manage both methane and nitrous oxide concurrently
This will need to cover various intensive livestock management strategies in different regions of Australia
and include seasonal factors, age and type of animals. There are possible trade offs between more nitrous
oxide versus less methane emissions depending on animal growth rates.
• Potential for bioenergy
Intensive livestock enterprises, particularly large piggeries and cattle feedlots, provide opportunities to
convert emissions to energy (renewable energy). There have been some positive experiences and the
opportunities need to be further explored.
• Capacity to reduce and use energy more efficiently
Significant energy is used in intensive livestock production systems. More information is needed
on better temperature control for animals, and greater efficiency of power use for vats, pumps etc.
There is also a capacity to provide better incentives to use “off peak” power to reduce the overall
demand for energy generation.
• Need for the development of management tools which incorporate greenhouse
The lack of data for benchmarking or cost/benefit analyses of farmers adopting new management practices
to reduce emissions, means that no “stand alone” system or process will be taken up by farmers.
Management tools need to be incorporated into a broader and more integrated process. Currently,
variations of on-farm environment management systems (EMS) or best management practices (BMP)
appear to be the most suitable. They are also the most likely to succeed, as they are now being trialled in
increasing numbers by industries and catchments, and there is an opportunity to include some emission
reduction strategies in those trials.
• Incentives for abatement and industry engagement in R&D
Research is urgently needed in the area of greenhouse and climate change in the intensive livestock
industry. In particular benchmarks and reduced emissions practices are required to provide potential cost
reductions as an incentive for farmers.
19. 17
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
Needs
1. Commonwealth should establish and support partnerships with the intensive livestock industry to
address climate change issues to take advantage of the opportunities for rural and regional Australia.
Co-ordination between the Commonwealth, State and Territory Government policies is required to ensure
a consistent national framework.
2. National research programs should be initiated including government, industry, natural resource
management bodies and end users, commencing with greenhouse gas practices audits for each industry
in each region.
3. Implementation practices of benefit to the intensive livestock industries should be developed to reduce
greenhouse gas emissions.
4. Research on the impacts of climate change on intensive livestock industries should be undertaken and
known adaptation strategies set in place where such impacts are expected in the near future (eg. water
for irrigation).
2.2.3 Cropping
Issues and Opportunities
• Drivers for Abatement
Emissions of greenhouse gases from cropping systems are not seen to be currently affecting individual farm
profitability or sustainability. Thus, there is little immediate incentive for change at farm level. Appropriate
drivers need to be identified and accepted by industry to create the changes needed to reduce greenhouse
emissions at farm level.
• Knowledge Gaps
There is very little information available on key greenhouse gases produced by the Australian cropping
industry. Very little is also known about the key processes that produce these emissions and the factors that
affect the rate of emissions. Specific information is required on the role of organic or inorganic nitrogen in
contributing to emissions, and the capacity of soils to sequester carbon.
• Systems Approach
Australian crop production systems aim to maximise overall enterprise profitability. At present the overall
net greenhouse emissions from production systems are unable to be measured. A practical greenhouse
accounting system should be developed, having due regard for the net effects of complex agricultural
systems. Particular attention should be paid to ‘whole of life’ emissions.
• Coping with Climate Change
The cropping industry requires objective measures and definitive advice on the likely impacts of climate
change at a regional and sectoral level. It also requires an indication of the pace of these changes in order
to assess its ability to cope with such change.
Needs
1. Identification of drivers of change for implementing effective greenhouse action in the cropping and
horticulture industry.
2. Research to address knowledge gaps. In particular, information is needed to identify and modify the factors
that affect the rates of emission in different cropping systems, including roles of organic and inorganic
nitrogen sources.
3. Development of a practical greenhouse accounting system for carbon, methane and nitrous oxide with
respect to net emission and actions that can be applied on-farm.
20. 18
4. Research on climate change impacts and adaptation for the cropping industries, including investigation
into the nature and pace of climate change at regional scales over Australia’s cropping areas; estimation of
the likely impacts these changes will have on grain quality and production; and investigation into the
ability of Australian plant breeding to keep up with the pace of climatic change.
2.2.4 Other Commodities
Issues and Opportunities
• Research ability for minor industries to engage in greenhouse action
Australian agriculture is characterised by a large number of smaller industries that take advantage of
specific agronomic or market niches. Individually, the contribution of these smaller industries to Australia’s
greenhouse account may be small, but these sectors should still be able to engage in greenhouse response.
The smaller industries strongly depend on specific aspects of location and climate. Many of these smaller
industries may be more highly exposed to impacts of climate change than their larger counterparts.
• Horticulture
Horticulture (including vegetables and vines) is the most rapidly expanding sector of Australian agriculture,
generating high financial return to resource input. But there are no data sets on the emissions of
greenhouse gases from Australian perennial or annual production systems. Despite exposure to climate
change impacts, especially with respect to water availability and chilling requirements for fruit, there are
very few analyses of the economic, structural and social implications of climate change in the horticultural
industries and regions.
Needs
1. Increase knowledge of emissions, abatement and the impacts of climate change on smaller industries
and horticulture.
2.3 Forests and Vegetation
2.3.1 Commercial Forestry
Issues and Opportunities
Australia is unique in the developed world for its large landbase which is receptive to broadscale reforestation.
Some of this landbase is at risk from the destructive effects of land and water degradation, which is estimated
to cost around $AUD 3.5 billion per year in lost productivity. Under certain climate change scenarios,
degredation may be exacerbated and climate change response strategies must therefore include cost-effective
revegetation programs aimed at achieving multiple benefits.
Market-based approaches can be used to achieve public-good benefits from revegetation programs.
Combining these with commercial timber production would provide powerful leveraging opportunities
for governments to cost-effectively arrest widespread salinity and other forms of land and water degradation,
while revitalising rural and regional Australia.
Unpublished data by Bureau of Rural Sciences indicates that 5M ha of land at risk from salinity is capable of
supporting plantation forests. Since 1990, around 500,000 hectares of plantation forests have been established
on cleared land by private investors, and the plantation base continues to expand by around 5% per year.
These new forests have the potential to sequester up to five million tonnes of CO2-e each year between 2008
and 2012 (net of timber harvesting activities). This is equivalent to 30% of the gap between Australia’s
projected emissions and the nation’s emissions target for 2008-2012. As the plantation ‘carbon sink’ continues
to grow, so will the nation’s means of accessing efficient abatement.
21. 19
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
Market trading mechanisms would stimulate additional forestry investment and may allow the equitable
distribution of this abatement within the national economy. ABARE modelling suggests the costs of abatement
(to reach the 2008-2012 target) is likely to be within the range of $13.50 - $19 per tonne of CO2-e. This price
would be sufficient to encourage new and additional investment into forestry projects that deliver multiple
benefits, thereby increasing the supply of credits and decreasing the cost of compliance with Australia’s target.
Australia’s international trade position could benefit under appropriate climate change response strategies.
For example, our largest trading partner, Japan, requires 165MT of CO2-e per year of abatement between
2008-2012. As Australia is a major exporter of coal and other fossil fuels to Japan, it could assist with providing
offsets from reforestation projects, effectively ‘value-adding’ to Australian exports as well as stimulating additional
investment into regional areas. Opportunities are also emerging to service new abatement markets in the USA.
Moreover, Australia is in a unique position to build on its existing relationships (expressed in the Climate Action
Partnership (CAP) and free trade negotiations) to develop a market-based climate change response strategy.
Forestry Needs
1. Governments at all levels need to work to achieve multiple benefits by integrating climate change response
strategies with ongoing reforms in natural resource management, particularly in relation to resource security.
2. Commonwealth needs to consider the benefits of market-based mechanisms for delivering cost-effective
abatement to meet the national 108% emissions target. It also needs to consider the contribution that
can be made by voluntarily trading sequestration credits from eligible forest-based sinks projects
(see Attachment 1).
3. Commonwealth should consider facilitating trading mechanisms between Australian businesses,
particularly forest enterprises, and emerging markets in Kyoto-block countries and the USA.
4. Commonwealth should recognise the rights to sequestration credits registered under state-based regimes in
reporting national accounts.
2.3.2 Other Industries
Issues and Opportunities
• Renewable Energy and Fuel
Waste materials from agricultural and forest industry and dedicated energy crops have the capacity to supply
a significant proportion of Australia’s renewable liquid biofuels and electricity markets. While these products
(ethanol, methanol, biodiesel and electricity) have to compete with fossil fuels, electricity derived from biomass
resources has the distinct advantage of permanently reducing Australia’s greenhouse gas emissions from fossil
fuels. Federal Government support for the renewable energy sector has been a key component in attracting
new investment in a small number of renewable energy facilities throughout rural and regional Australia.
Forest and plantation harvesting or milling residues have the capacity to account for at least 30% of the Federal
Government’s Mandatory Renewable Energy Target for electricity generation. However the nature of the
national regulations applying to the use of forest and plantation wood waste, and the limitations on utilising
purpose-grown trees as energy crops, are a significant impediment to the generation of renewable energy
products from our existing biomass resources. In a similar manner, bagasse, sugar milling residues and
cropping and livestock sources have the capacity to make a substantial contribution to the permanent supply
of Australia’s renewable energy products.
Unfortunately, the decision by Australia alone to exclude forest management from the national greenhouse
gas accounting framework has removed an important incentive for encouraging the use of wood waste from
native forests to produce renewable energy supplies. For example, if New South Wales had to account for the
greenhouse gas emissions from native forest harvesting operations, they may not have deliberately regulated
22. 20
against its use, even though the waste is a by-product of sustainable harvesting operations. Under the current
accounting process, the material can be left to rot in the forests or add to bushfire fuel loads without
accounting for the greenhouse gases that are released.
• Emerging industries
In addition to using biomass resources from traditional agricultural and forestry pursuits, it is possible to
generate biomass resources from emerging industry activities. The oil mallee projects being promoted in
Western Australia have the ability to supply resources for oil extraction, charcoal production and remote power
generation. Other abatement options using wood-based materials include the production of charcoal from
plantation eucalypts. In Brazil, steel producers will replace the use of mineral charcoal in their operations
with charcoal derived from renewable timber plantation resources.
Needs
1. Competitive use of biomass resources for renewable energy production, including emerging abatement
activities, should be encouraged, particularly where impediments affect particular industry sectors.
2. The Federal Government should continue to support renewable energy production from emerging
resources and those biomass resources which would otherwise release greenhouse gases without capturing
any permanent abatement of greenhouse gas emissions from fossil fuels.
3. Further research should be undertaken to determine the overall impact of including all aspects of forest
management in Australia’s national greenhouse gas accounting processes as the basis for international
negotiations on sinks, emissions and abatement activities.
2.3.3 Vegetation Management On-farm
Issues and Opportunities
Native vegetation management is one of the most uncertain elements of the greenhouse gas inventory and is
a key issue for landholders in the agriculture and forestry sectors. Native vegetation is cleared to improve
the productive capacity of the land and to control and maintain vegetation thickening of woody species.
For the long term sustainable use of Australia’s natural resources, and in particular native vegetation,
a clear framework for land and water resource security is required to underpin management and provide
certainty for resource managers.
Managing native vegetation on farms has a number of important natural resource management benefits and is
undertaken for a variety of purposes including grazing, timber, shelter, honey production, tourism, recreation,
timber production and maintaining the productive potential of the land. Effective management of native
vegetation has implications for water quality, the health of soil and air and biodiversity conservation.
However, there are significant challenges and difficulties in addressing greenhouse issues within vegetation
management on farms. At present there is a lack of research in a number of significant areas. This includes
quantifying the greenhouse contributions of fire management (ie savanna burning and bushfires in temperate
Australia), and additional sinks activities resulting from vegetation thickening, woody weed regrowth and
woodland expansion.
Fire management in northern Australia's savannas plays an important role in controlling woody vegetation,
removing dead biomass, clearing and stimulating grass growth and palatability. Natural fires occur due to
lightening strike, particularly during drought or under poor fire management regimes. The importance of
fire makes its carbon sequestration potentially difficult to assess.
23. 21
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
The approach to vegetation and landuse change must weigh up the economic, social and environmental
impacts associated with either maintaining or changing land-use. Significant further research is required to
determine the full extent of all the emissions and sink activities covered within the management of native
vegetation and land-use change. The inability of Australia to account for all greenhouse gas emissions and
sinks activities is a major concern for the agricultural and forestry sector.
Needs
1. National accounting frameworks should have the capacity to address all emissions and sinks activities at
regional, local and enterprise level as the driver for encouraging sustainable land management.
2. Further research is required to determine the full extent of all the emissions and sink activities covered
within the management of native vegetation and land-use change prior to negotiating carbon accounting
rules post-2012.
3. Government should support the development of a clear framework for land and water resource security
to provide certainty for resource managers and underpin the management of land and water resources
2.4 Cross Cutting Issues
2.4.1 International Trade
Issues and Opportunities
Australian farmers export 65% of their production. As such, it is vitally important for domestic producers
to remain internationally competitive. If Australian producers are subject to costly greenhouse abatement
programs, while overseas competitors are not, Australian producers will be placed at a competitive disadvantage.
The Commonwealth Government must consider the international competitiveness of the agriculture and
forest sector when devising policy frameworks.
The Federated Farmers of New Zealand has argued that freeing up international trade in agriculture would do
more to reduce greenhouse gas emissions from agriculture than abatement measures under the Kyoto Protocol.
This is because current farm support programs in many first world countries encourage very inefficient
production and the removal of these programs could address many environmental problems, including
global warming.
Climate change could impact on the international competitiveness of Australia’s agriculture and forestry sector.
Research must be undertaken to explore possible impacts of climate change on the international
competitiveness of products.
These new production systems and practices may add to Australia’s costs of production. As a result, Australia’s
industry response will impact on the international competitiveness of the agriculture and forestry sectors,
particularly if global climate change benefits producers in the northern hemisphere.
Needs
1. Research on the greenhouse benefits of freeing up world trade in agriculture.
2. Further research to explore the possible impact of climate change on international competitiveness of
Australia’s agriculture and forestry products.
3. Further research to clarify the impact of abatement in the agriculture sector on reducing the extent of
climate change.
24. 22
4. Further research to identify the agricultural trade implications of all possible abatement policies and the
implications of Australia’s decision not to ratify the Kyoto protocol, particularly focusing on the
international competitiveness of Australia’s trade-exposed agriculture and forest industry sectors.
2.4.2 Dealing with Climate Change
Climate variability is a natural part of Australian agriculture, influencing productivity and sustainability.
The Australian agriculture subsector has evolved to account for climate variability by developing industries
most suited to the climate. However, climate change is expected to alter climatic conditions and expose the
agriculture, forestry and land management sector to new pressures. Climate change projections undertaken
by the CSIRO and BRS indicate temperature increases, more extreme hot and less extreme cold days and an
overall drying trend. The vast spatial distribution of primary production suggests that there will be few
production regions in Australia that will be unaffected by climate change.
One critical issue for our sector is illustrated by the severe drought Australia is currently experiencing. This is
now regarded as one of the worst droughts since European settlement. When temperatures and evaporation
rates are taken into account, the growth conditions for agriculture are the worst on record. For the forest
sector and significant areas under agriculture, the drought stimulated a record-breaking fire season in terms
of duration and losses, particularly in NSW, Victoria and the ACT.
Issues and Opportunities
• Improved precision of climate change projections at regional and catchment scales
A better understanding of how climate will change at regional and catchment scales is fundamental to
being able to address the impacts of climate change across Australia. This will involve continually
improving Australia’s climate modelling capacity within the context of global circulation modelling.
Climate models should be developed and advanced to increase the detail, precision and resolution of
climate projections for all areas of Australia, building topographical and historical meteorological data into
the global models currently used. In particular there is a need to improve understanding of how climate
change will affect spatial and temporal rainfall and temperature trends and cycles, as well as the affect of
climate change on extreme events such as the El Niño Southern Oscillation, droughts, tropical cyclones,
storm surges, return periods for heavy rainfall, floods, high winds and hail.
• Assessment of vulnerability and adaptive capacity of agricultural industries
Agriculture and managed ecosystems are particularly vulnerable to climate change. Changes in
atmospheric carbon dioxide, temperature, temperature extremes, rainfall and evaporative potential will
have major impacts on agricultural productivity, sustainability and economic return. Planned responses
are needed to ensure the long-term economic viability of Australian agriculture and land-based industries.
It is essential that capacity is developed to adapt Australian agriculture, forestry and land management to
climate change in order to reduce future vulnerability. In building this capacity, adaptation strategies will
need to be driven more by changes in variability and extremes than by climate averages. Good short term
adaptive decisions will help reduce long term vulnerability.
Cost effective adaptation strategies need to be developed for all rural industries. These need to be
developed collaboratively with government, industry, regional communities and research providers.
Adaptive responses should deliver multiple benefits, including enhanced productivity, increased economic
return and improved management of natural resources. They should also be based on a sound
understanding of economic and biophysical interactions, so that they may be relevant to whole farm
and regional systems.
25. 23
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
• Cropping – water, distributional and location issues, adaptation
The ultimate limit to crop productivity in the arid and semi-arid regions of Australia is water. Hence there
is likely to be a direct relationship between the climate-change induced reductions in available water and
yield and profit. Available water will be reduced because of the combination of reduced rainfall and
increased evaporative demand. Both rain fed and irrigated production systems will be affected by shorter
growing seasons and the need for greater efficiency in water use.
Adaptation responses will involve modifications to systems management, crop type and cultivar
improvement. Regional infrastructure requires long term planning. The cropping areas of Australia are
likely to experience greater adverse impact of climate change than any of Australia’s traditional competitors
on world markets, and this provides added pressure on Australia to develop effective adaptive responses.
• Livestock – heat implications, pests and diseases, milk yields, pasture quality, carrying capacity
Projected decreases in winter and spring rainfall and increased evaporative demand – especially in south
eastern and western regions of Australia – will greatly reduce plant production, and hence will constrain
animal production. In the dairy industry, rising temperatures are projected to have a direct negative affect
on milk yields. Average annual milk yields per cow in Australia are likely to decrease by around 280 litres
due to temperature alone unless effective adaptive responses can be implemented by industry.
Climate change will also affect balances within host-parasite relations – undoubtedly affecting the
economic impact of pests and diseases. However there are as yet very few studies on the way in which these
balances will move. Cattle and sheep grazing are the main land uses in the arid and semi arid areas of
northern Australia, and history has demonstrated the direct link between climate variability and economic
return. Rangelands incorporate a great diversity of plant and animal species. Climate change and rising
CO2 levels have the potential to significantly alter the interactions between plant species in these
environments, particularly where the balance between woody and grassy layers is already delicate.
• Forestry – implications for growth rates, species location issues
Forest productivity in a changing climate will depend on balances between the benefits of CO2 enrichment
and changes in rainfall and temperature patterns. Increases in CO2 and increased temperatures may
encourage tree growth. However, a reduction in rainfall or a change in seasonal rainfall patterns may
override these potential benefits. Increased frequency of extreme events such as fire may further counter
potential benefits. In cases where extreme rainfall decreases are projected (ie south west Australia), impacts
could be severely negative. Where soil nutrients are already limiting production, there will be little or no
benefit from CO2 enrichment. Climate change undoubtedly will affect distribution patterns of forest
species and biodiversity in managed and native ecosystems. Despite this, we understand very little about
what these changes are likely to be.
• Water – allocation from reduced supply issues, catchment issues
Changes to water resources are a major concern across most, if not all, of Australia. This is due to the
overall trend towards drying and the change to a more typical El Niño state. By 2050, surface flows in
the Murray-Darling Basin are projected to decrease by between 12% and 35% (depending on the water
course). This could compound difficulties in water allocation between environmental, urban and
irrigation demands. Reduced flows will increase the risk of eutrophication and algal blooms in inland
waterways. Wetlands and riverine environments are already under threat from reduced flows and
alternative water demands. They perform vital roles in ecosystem dynamics and undoubtedly will
be adversely affected by climate change.
26. 24
There are also likely to be impacts on salinisation and erosion, especially as a result of increased intensity
of rain events and storms. There will be greater need for water accounting methodologies, both at paddock
and catchment scales, to monitor, evaluate and manage water use. There will be greater focus on
eliminating water losses that cannot be recaptured, and on maximising economic or environmental
benefit per unit of available water. The changes in water supply and catchment hydrology will impact
throughout all rural landscapes, affecting the environment, agriculture, infrastructure and people’s
livelihoods. Initiatives such as institutional reforms, incentive schemes, public awareness campaigns
and scientific and technical developments will take on greater importance in light of projections for
decreased water availability.
• Pests and Diseases
There are multitudes of threats from climate change induced alterations to host parasite relations in
agriculture, forestry and land management – but these are not well understood. The most likely
consequences are changes in the severity of pests and diseases within current geographic distributions or
shifts in geographical distribution. Projected warming will increase the ability of some pests to survive
winters, and will accelerate development of most species that are active in summer. Changed climate will
enable tropical species such as the Queensland fruit fly and the cattle tick to spread southwards and threaten
exclusion zones established to protect interstate and international trade. Plant pathogens are likely to have
greater impacts in areas with dry summers as the frequency of summer rainfall events and humidity levels
increase. Some sub-tropical weeds would establish greater relative advantage from climate change, both
directly through increased vigour, and indirectly from reduced competition as altered conditions weaken
native species.
• Fisheries – implications of ocean temperatures, productivity, nutrient circulation, fish stocks
The Southern Ocean provides a critical link in the overturning world ocean circulation that both controls
global climate and is affected by global climate. The overturning circulation also controls how much heat
and carbon is stored in the ocean, and determines nutrient supply that fuels the Southern Ocean and
Antarctic ecosystems. It is the sole process for delivering oxygen to the deep ocean. Present climate models
indicate that Southern Ocean overturning is very sensitive to climate change. Relationships have been
established between climate variations and recruitment of some fish species. This suggests that fisheries
will be sensitive to climate change. Currently, there is insufficient information to project the impacts of
climate change on fisheries productivity and economic viability of Australia’s ocean fishing industry.
• Social, economic and regional development implications
Climate change will have major implications for land-use capability and the capacity of farms, ecosystems
and regions to sustain existing or new enterprises. Changes in land use capability have economic,
environmental and social consequences for regions and catchments. There is a need to assess the effects
of climate change on regional communities, and to develop appropriate community responses such as
structural change.
Needs
1. A major injection of resources is needed to improve climate change projections at regional and catchment
levels, to increase understanding of the impacts of projected climate change on the agricultural and land
management sectors (at the subsectoral level). These resources are also needed to develop adaptation
strategies for economic, environmental and social benefit at the regional and national levels.
27. 25
Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
2.4.3 Supply Chain
Issues and Opportunities
• Market access
Developing consumer awareness of climate change may lead to market mechanisms to value greenhouse
friendly production. The provision and control of accurate consumer information will depend on
integrated action throughout the supply chain.
• Adaptation
Predicted climate change and consequent agricultural production changes in quantity and quality in both
geographic and seasonal dimensions will have significant implications for medium and long-term decision
making throughout the supply chain. Issues such as infrastructure, value-added processing, regional
employment, contract and market development planning will need to be addressed.
• Abatement linkages
There appear to be opportunities to achieve reductions in agricultural greenhouse gas emissions through
product development. With appropriate market mechanisms, the ability to provide economic value to
developers of new technology as well as users is likely to significantly increase development activity.
Support for research and development through incentive programs and public funding will also be a
significant contributor to the development of technological solutions.
Needs
1. Market access: While opportunities for marketing greenhouse friendly products remains the domain of
industry, successful programs will require a recognised framework to validate greenhouse friendly claims.
Such a framework should be considered in consultation with industry when developing future public
policy and conducting further research into climate change processes in the agriculture and land
management sector.
2. Adaptation: Australia’s medium and long term climate change forecasting should continue to be developed.
This should incorporate the likely effects of climate change on rural production, regional socio-economics
and the agricultural supply chain. Effective dissemination of this information through the supply chain
should be a priority action.
3. Abatement: In designing market mechanisms to deal with emissions, consideration should be given to
establishing effective mechanisms to provide clear economic incentives for developing products and
technologies that reduce emissions in the agricultural sector.
28. 3.0 THE WAY FORWARD
A coordinated commitment from all governments, industry bodies and research providers is needed to develop
a constructive and effective way forward for agriculture, forestry and land management in order to address the
challenges of climate change. The Working Group believes that formal dialogue between government and
industry should continue through the Working Group, as the basis for addressing climate change within
this sector.
3.1 Emissions Abatement
3.1.1 Policy Approaches
Issues and Opportunities
The Working Group recognises that there is a range of policy options available to address emissions abatement
in agriculture, forestry and land management. It proposes that policies designed for this sector are unlikely to
involve either market or sectoral approaches alone. Rather, it seems likely that such policies will involve a
combination of both.
No regrets abatement policies should be implemented immediately where there is a greenhouse benefit
(ie where policies lead to economic gain or are delivered at no additional cost). Such policies could include
liberalisation of world trade in agriculture. Other abatement policies can be implemented through government
taxes, regulation or spending. It is important to note that all these policies impose net costs on the economy.
The advantages of economy-wide market measures for agriculture, forestry and land management is that they
generate a transparent price for greenhouse gas emissions. Abatement can also be factored into revenue
options, production costs and economic decision making. They are broad in nature, can deliver certainty to
industry, and are likely to have lower implementation costs. For effective operation, market-based approaches
require greenhouse gas emissions and abatement to be accurately measured and monitored. They also require
a range of cost-effective abatement options and an ability to administer the mechanism reliably and efficiently.
The Working Group considers that in the medium to longer term (ie post 2015), there may be some
reasonable options for agriculture, forestry and land management to participate in an economy-wide market
approach for greenhouse abatement, with advantages for the sector. In the more immediate term, options
relating to the capacity of forestry to generate carbon credits are available even with Australia outside the
internationally-accepted trading regime. Both government and industry need to further develop and analyse
these options before an agreed position can be defined.
Sectoral approaches involve measures or a combination of measures that are targeted to address an issue or barrier
in a specific sector (or subsector). Any sectoral approach in agriculture, forestry and land management will
need to cover issues that are common across all enterprises, as well as opportunities within individual businesses.
Needs
1. Policy options for emissions abatement in agriculture, forestry and land management should be developed
and analysed collaboratively between government and industry.
2. There is an urgent need to further analyse options for carbon trading and harnessing benefits of forestry
and land management from trading (e.g. offsetting, benchmarking). Developing such systems could well
drive sinks investment in Australia, export of Australian sinks, and improved carbon accounting expertise.
Australia could, for example, enter into a bilateral agreement with the US through the Climate Action
Partnership for mutual recognition of domestic sink credits.
26
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Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
3.1.2 Emissions Science and Research
Issues and Opportunities
The recent history of only very small investments into climate change R & D in agriculture, forestry and land
management severely restricts the capacity of farmers and land managers to deliver possible greenhouse-related
economic, environmental and social benefits to Australia. Substantial research into the nature of emissions,
abatement options and policy mechanisms is needed in 5 key areas, as outlined below. Specific research
needs, as identified by each sector during the Working Groups deliberations, are in Attachment 2.
Needs
1. Research on the capability to measure and account for emissions
Current technologies for measuring the diffuse emissions of greenhouse gases from land-based systems are
expensive and difficult. This severely restricts collection of data needed for the development of better
abatement options and greenhouse gas accounting.
2. National research program on options to reduce methane production from ruminant livestock
A coordinated program is required to assess and develop a range of options for reducing methane
production from livestock, including options involving livestock management, feed additives, methanogens,
acetogens and animal selection. Improved modelling is also required to develop tools and decision support
systems to assess the merits of implementation.
3. National research program on options to reduce nitrous oxide emissions from soil and plant systems
A coordinated program is required to assess and develop a range of methodologies that will deliver multiple
benefits on the farm. There is a need to increase knowledge of sensitivity responses between management
options and nitrous oxide emissions, and to develop decision support accordingly.
4. Research into carbon sequestration
Additional research is needed on carbon sequestration in vegetative systems and in the soils of cropping,
pasture and rangelands. Practical management and monitoring tools also need to be researched.
5. Research into policy options
Research is needed on possible market-based and sectoral policy approaches for Australian agriculture,
forestry and land management to assess the potential for providing benefits for this sector, and to adequately
inform decision making.
3.1.3 Implementing Abatement
Issues and Opportunities
• Knowledge
There is currently restricted capacity for the agriculture and land management sub-sectors to measure
greenhouse gas emissions at the enterprise or sectoral level, although forestry is currently better placed and
has greater possibilities. Without this measurement capacity, development of appropriate, cost effective
greenhouse gas abatement strategies is limited. Improving the precision of models to enhance regional
modelling and developing decision support tools for use at the enterprise level will enhance emission
projections and assist in developing cost effective abatement measures.
30. 28
• Incentives for abatement action
At the moment, implementing actions to abate greenhouse gas emissions in agriculture, forestry and land
management is unlikely to bring about a sufficiently positive immediate advantage for the business to drive
change in its own right. Drivers therefore need to be identified that will deliver benefits to the landholder’s
business. Abatement strategies for agriculture, forestry and land management are unlikely to have universal
applicability due to the large number of different enterprises and management practices. Sectoral
abatement strategies will need a high degree of tailoring for sectors, catchments or even individual
enterprises. Cost-effective incentives will need to be researched collaboratively between industry, government,
regional communities and research agencies, possibly within the framework of voluntary negotiated
agreements. Such an approach will most likely require accurate accounting and monitoring capacity.
Implementation of abatement strategies for agriculture should occur concurrently with other sectors.
• Communication
Strengthening partnerships between governments, industry and regional communities will improve
information dissemination of abatement options and opportunities. Involving landholders in training
courses is consistent sustainable management practice. Providing options for the agriculture, forestry and
land management sector to access targeted training will increase the industry’s level of understanding of
greenhouse issues, and is a key to uptake of available technologies.
Needs
1. Increased knowledge on greenhouse gas emissions and options for the agriculture, forestry and land
management sector to reduce emissions.
2. Understanding of relationships between management practices, rates of emissions and cost-effective
abatement actions; and recognition of drivers of change in rural and regional communities.
3. Research on appropriate greenhouse accounting and auditing tools to estimate greenhouse gas emissions
from agricultural and land management systems.
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Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
3.2 Impacts and Abatement
3.2.1 Impacts and Adaptation Science and Research
Issues and Opportunities
• Enhanced climate change science relevant to the land based sectors
There is a need for improved understanding of the projected climate changes at regional levels across
Australia, providing greater precision and resolution of the climate predictive models.
• Identification and understanding of the exposure of sectors in agriculture, forestry and land
management to projected climate changes
Vulnerability assessments are required at the enterprise and regional levels across Australia on the basis
of economic, environmental and social impacts, and analyses of the benefits and costs of possible
adaptive measures.
• Development of adaptive capacity and actions to ameliorate impacts of climate change or to harness
opportunities that climate change brings
Adaptation reduces the vulnerability of the agricultural, forestry and land management sector to impacts
of climate change. The extent to which a sector or region can adapt to climate change is referred to as
adaptive capacity. Strategies to reduce vulnerability (adaptive strategies) may be driven more by variability
and extremes rather than by climate averages. Research into good, short-term adaptive strategies are
necessary to help reduce long-term vulnerability.
• Researching multiple benefits for catchments and regions
Cost-effective adaptation strategies for all rural and regional industries need to be researched collaboratively
by government, industry, regional communities and research agencies. They need to be based on a sound
understanding of economic, biophysical and social interactions if they are to remain relevant to whole-farm,
whole system, and whole communities. Social research issues in particular need to be strengthened to
increase capacity for change.
Needs
1. National research effort to examine impacts and adaptation to climate change in agriculture, forestry and
land management - across all relevant funding agencies, including Commonwealth, State and Territory
agencies, Rural Industry Research Corporations and industry.
32. 30
3.2.2 Implementing Adaptation
Issues and Opportunities
• Knowledge and climate science
A variety of adaptation measures may be taken to reduce the adverse impacts of climate change on agriculture.
In order to develop suitable adaptive strategies, an understanding of how climate change will impact on
local sectors, catchments or regions is required. However, current climate change projections for Australia
are reported on a continental scale and are highly uncertain at finer resolutions.
• Priority adaptation strategies for vulnerable sectors and regions
The most vulnerable systems are those with the greatest sensitivity to climate change and the least ability
to adapt. Vulnerable sectors, regions or catchments need to be identified and their adaptive capacity
ascertained. Collaborative partnerships between industry, governments and communities are necessary
to develop and implement cost-effective adaptation strategies. Adaptive responses need to deliver multiple
benefits of enhanced productivity, increased economic return and improved management of natural
resources. Responses also need to be based on a sound understanding of economic and
biophysical interactions, so that they may be relevant to whole farm and regional systems.
• Structural adjustment (sectoral and regional)
Australian primary producers have access to government assistance to overcome the temporary impacts
of market downturns and seasonal adversity. However, climate change is a long-term issue and there
may be a need to re-evaluate the way in which assistance eligibility is assessed. Where possible, efficient
producers should receive assistance in addressing the adverse impacts of climate change, or taking
advantage of opportunities. This assistance may be in the form of advice, financial support or training.
Where producers are unable or unwilling to adjust, appropriate programs should be in place to assist
with their circumstances.
• Communication
Increasing public awareness will improve knowledge and increase community involvement in developing
and implementing adaptation measures. Developing collaborative relationships between industry,
governments and communities will facilitate this process and ensure social capital within communities
is recognised.
Needs
1. Integrated regional assessments to identify regions and sectors most vulnerable to climate change.
2. A national approach to adaptation planning and implementation across the agriculture, forestry and land
management sector.
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Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
AGO (2002). Tracking to the Kyoto Target - Australia's Greenhouse Emissions Trends 1990-2012.
Australian Greenhouse Office, August 2002. http://www.greenhouse.gov.au/ago/15aug2002/pubs/factsheet5.pdf
CSIRO (2001). Climate Change in Australia. Climate Change Projections for Australia.
www.dar.csiro.au/publications/projections2001.pdf
CSIRO (2001). Climate Change in Australia. Climate Change Impacts for Australia.
www.marine.csiro.au/iawg/impacts2001.pdf
George Wilkenfeld and Associates and Energy Strategies (GWA&ES)(2002) Australia's National Greenhouse
Gas Inventory 1990, 1995 and 1999: End Use Allocation of Emissions. Australian Greenhouse Office,
Canberra.
REFERENCES
34. ATTACHMENT 1:
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BENEFITS AND RISKS TO THE FORESTRY SECTOR OF AN INTERNATIONAL
TRADING REGIME SUCH AS THE KYOTO PROTOCOL
Although outside the terms of reference for this document, considerable debate emerged within the forestry
sector regarding the benefits and risks for ratifying the Kyoto Protocol. Some plantation growers have already
commenced marketing carbon sequestration benefits to investors and buyers of carbon rights domestically and
internationally. The perceived benefits however are not universal. Amongst the concerns expressed by some
of the forestry sector, was the inadequacy of accounting rules under the agreed Kyoto framework and domestic
regimes. Uncertainty over future accounting and trading rules in the period beyond 2012 is also of concern to
the section.
A summary of key issues is provided below:
1. Investment Opportunities
Reforestation projects have already occurred in Victoria, Queensland, New South Wales, Western Australia
and Tasmania, stimulated by the potential value of rights to sequestered carbon in reforestation projects.
Further opportunities for additional investment are anticipated by the plantation sector.
Benefits:
• The Japanese Kyoto market alone is 165MT per year CO2-e. Servicing 10% of this market could stimulate
some 6M ha of new plantations, four times the present resource base.
• This scale of development would revitalise regional economies by diversifying the productive base, and
generating secondary processing employment.
• Australian exporters of coal and other emissions-intensive products to Kyoto countries would have the
option of sourcing competitive and reliable offsets domestically.
• Access to a Kyoto market could be used to leverage substantial environmental benefits in the Murray
Darling and SW Western Australia, and offset continued land clearing in Queensland.
Risks:
• Carbon rights transferred to the international market from domestic projects are not available for Australia’s
national accounting.
• Australian sectors differ in their exposure and preparedness for operating under the Kyoto Protocol.
Sectors that are at risk will need to be protected or compensated for potentially adverse impacts.
2. Cost of Compliance
Benefits:
• Modelling by ABARE has shown that the cost of meeting the 108% national emissions target is lower
if Australia has access to Kyoto flexibility mechanisms, compared to the alternative of not ratifying.
Risks:
• Uncertainty arises in complying with future accounting rules that may be negotiated for periods after the
first commitment period 2008-2012.
3. Market Distortions
Domestic markets for forest products are not always transparent and competitive, and this distortion has tended
to dampen investment into reforestation projects, particularly in long rotation hardwood regimes.
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Report to the Commonwealth Government by the Agriculture and Land Management Working Group 2003
Benefits:
• Value-adding forest investment opportunities from carbon trading would assist in balancing the domestic
playing field.
• Access to Kyoto carbon trading markets would ensure that the international competitiveness of the Australian
plantation sector is not unfairly disadvantaged as an investment destination compared to ratifying countries.
Risks:
• Correcting any market distortions by artificially favouring post 1990 plantations is not a sound basis for policy.
• Australia’s international competitiveness for forest investors may be adversely impacted by other issues not
presently anticipated arising from Kyoto.
4. Accounting rules
Benefits:
• Accounting rules for Article 3.3-compliant plantations, established since 1990 on historically cleared land,
are simple and straight-forward.
• Rules for netting emissions from thinning or harvesting in the first commitment period protects eligible
forests from net debits on a unit basis. Pooling mechanisms allow larger scale managers to trade carbon
jointly with timber production.
• The plantation sector is likely to be a net beneficiary of trading opportunities under the present
accounting rules.
Risks:
• Current accounting rules do not recognise transfer of carbon rights to forest products. Industry sectors
argue that forest products should be treated equitably with other commodities. For example with fossil
fuels, the emission liability is accounted for at the point of emissions not production.
• Australia’s decision not to include 3.4 Forest Management, overlooks potential net greenhouse benefits.
It may also indirectly contribute to perverse outcomes in unintended areas, for example:
- utilisation of forest residues for renewable energy production
- lock-up of production forests into national parks
- inappropriate fuel management policies on native forests leading to destructive wildfire
- loss of vegetation thickening (woody encroachment) on previously cleared or grazed lands both to
the national sinks budget, and for offsetting other emissions activities at an enterprise or sectoral level
- Owners of pre-1990 plantations that exercise their right to harvest and sell bare land may encounter
an emission debit under Article 3.3, artificially degrading the value of the land and forest asset.
Despite the divergence in opinion, the forestry sector was universal in its view that the application of
market-based mechanisms should be considered in governments’ policy options for climate change
response, either within or outside the Kyoto framework.
The forestry subsector also recognised the unique opportunity for Australia to position itself between the Kyoto-block
countries and the emerging voluntary regimes in the USA. Consensus was reached across the subsector on the
shared vision that Australia could gain from business and investment opportunities extending from a national trading
regime. These gains would derive from hosting and servicing a carbon emissions trading market in both Kyoto and
non-Kyoto markets in the Asia-Pacific, EU and Canada with USA. Consequently the sector strongly supports a policy
which does not overlook short and long-term opportunities arising from global climate change response agenda.
36. ATTACHMENT 2:
SPECIFIC RESEARCH NEEDS AS IDENTIFIED DURING THE WORKING
GROUP’S DELIBERATIONS
1. Measurement
• Determine the agriculture, forestry and land management sector’s emissions across all enterprises,
down to a regional, catchment, commodity and farm-specific level. In particular research is needed to:
- identify fundamental processes of emissions and factors affecting rate and magnitude of these emissions
- recognise, measure and account for all emissions and sinks activities
- examine the impact of broader national emissions accounting, for example to include changes in
grazing lands management (such as from woody weed and vegetation thickening)
- examine the possibilities for and implications of a similar broadening of the international emissions
accounting framework
- identify emissions for extensive livestock landuse, including methane from enteric fermentation
(feed digestion), management of rangelands and pastures (nitrous oxide, carbon dioxide), land
clearing (carbon dioxide), and savanna burning (methane, nitrous oxide, carbon dioxide)
- understand emissions from livestock, fertilisation and organic nitrogen sources in intensive
livestock industries
- understand the exact role of organic or inorganic nitrogen in contributing to emissions, and the
capacity of soils to sequester carbon in cropping systems
- understand the implications for vegetation management and carbon stocks and flows in relation
to fire (including savanna burning and bushfires in temperate Australia), vegetation thickening,
woody weed regrowth and woodland expansion.
• This research must:
- address the problem that current technologies for measuring diffuse emissions from the sector are
expensive and difficult, hampering the development of abatement action
- be integrated into global climate change models
- be coordinated between governments, research organisations, industry bodies and between sectors
- be developed in collaboration with industry, particularly through the Government –
Business Dialogue
- be integrated with any (current and prospective) impact and abatement systems.
2. Abatement
• Research possible abatement programs for the agriculture, forestry and land management sector.
In particular:
- examine the potential for no-regrets abatement policies
- clearly identify costs, benefits, threats and opportunities from abatement
- examine the appropriate mix of economy-wide and sectoral approaches
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