The Carbon Market – what it will mean for farmers

By: David Walker
April 21, 2010

A recent report on Australia’s climate highlights the fact that temperatures are rising. The report by CSIRO and the Bureau of Meteorology (http://www.csiro.au/files/files/pvfo.pdf) shows, for example, that since 1960, every decade has been hotter, with the last decade showing a big increase in the number of record hot days.

There is a strong agreement from scientists around the world that ‘normal’ rates of climate change are being accelerated by man’s activities. In particular they are referring to the emission of ever-increasing amounts of CO₂ (carbon dioxide) from power generation and industry around the world. Governments around the world are wrestling with how to respond to these changes, and how to mitigate them, so that catastrophic changes to natural systems can be avoided. The failure of the talks in Copenhagen show just how difficult the politics is.

There are real fears that higher temperatures and less reliable rainfall will reduce food production along with the ability of many species of plants and animals to survive in their current ranges.

While no-one disputes that Australia has long had an extremely variable climate “of drought and flooding rains”, indications are that south eastern Australia is going to become, on average, hotter and drier. 

In these circumstances agriculture is going to be under all sorts of pressures from this changing climate. For example, increased heat stress of livestock will certainly reduce weight gains and increase requirements for good quality stock water. Plant growth can also be reduced at higher temperatures, and some tree crops may no longer get the chilling required to fruit effectively. 

When calculating greenhouse gas emissions, scientists take into account the fact that different gases have a different warming effect, much the way that a synthetic blanket does not insulate as well as a feather down doona. While CO₂ is by far the main greenhouse gas by volume, two other gases are important. Methane (CH₄) has about 21 times the insulating ability of CO₂, and nitrous oxide (N₂O) has 310 times the insulating ability of CO₂.

In Australia, greenhouse gas emissions come mainly from power generation (about 50% of the total), and the levels of emissions from this source is still increasing rapidly (up by 43% over the period 1990 to 2005). The next biggest contributors are transport and agriculture at around 15% of the total each. Agriculture is notable compared to other sectors in that its emissions have stayed about the same.

Australian farmers have already played a major part in Australia’s response to the climate change problem. Under the Kyoto protocol, countries were supposed to keep their emissions at 1990 levels. While most sectors of the economy have markedly increased their emissions, agriculture has not changed. Further, because the rate of clearing of agricultural land has been severely reduced as a result of the banning of clearing that has become policy since the early 1990’s, there has been a marked reduction in emissions from this source. Emissions from ‘landuse change’ are said to be 60% less than 1990.

That Australia has been able to claim that it is meeting its Kyoto targets, is only due to the restrictions on land development that have been put on farmers -a fact not widely acknowledged. The fact that we, as a country, have not acted to reduce our CO₂ emissions from other sources is shameful.

However, it is important to remember that, as well as producing greenhouse gases, agriculture also has a crucial role to play in the removal of CO₂ from the atmosphere. The only natural way that it can be taken out of the air we breathe is through plant growth. All agriculture is based upon photosynthesis, the miraculous process whereby plants can take CO₂ from the atmosphere, water and nutrients from the soil, and turn it into starches, proteins and the other complex compounds that feed, clothe and house us, all powered by sunlight.

While agriculture is not to be included as an emitter in the proposed ETS, there will be flow on costs from the ETS. On the other hand, there will be opportunities for farmers to utilise their land to take CO₂ out of the atmosphere and store it in vegetation and soil. This is where carbon trading may well be a positive for farmers. Believe in global warming or not, carbon trading is going to have a huge impact on the physical and economic environments in which we operate.

LPLM 02 6741 8375

A healthy catchment for a productive future

www.lplmc.com.au