A paper delivered to the Lavoisier Group Conference, May 2000
Greenhouse and Agriculture
Good morning and thank you for asking me to join you.
Today's subject is challenging in both scope and scale ... as a nation,
we are currently in the midst of a complex set of negotiations in a field
that is subject to significant uncertainty.
Yet greenhouse has become a major political issue---one that is inescapable
for the agricultural sector.
This is because agriculture has been targeted as a significant contributor
to greenhouse. In fact, we are told that agriculture is the largest source
of Australia's methane and nitrous oxide emissions.
Estimates prepared for the 1997 National Greenhouse Gas Inventory, argued
that agricultural and forestry activities contributed 22 per cent, or 94
million tonnes, of Australia's total net greenhouse gas emissions of 431
million tonnes of carbon dioxide equivalents (not including land clearing).
The bulk of this comes from livestock emissions, totalling 67 million
tonnes or 15 per cent of total national net emissions.
While the reduction of ruminant emissions is the subject of serious study
into developing and commercialising a vaccine---the practicalities, costs
and effectiveness of this are yet to be proven.
Emissions from agriculture are said to have been 1.4 per cent higher
in 1997 than in 1996, and 2.3 per cent higher than in 1990.
Emissions from livestock peaked in 1991 and have been declining since,
primarily due to the large reduction in sheep numbers associated with drought
and the wool price crash.
Emissions from agricultural soils and burning savannas, together accounted
for 27.5 million tonnes or seven per cent of the national total in 1997.
There was an 11 per cent increase from 1990 to 1997 from agricultural soils
and burn offs.
In comparison, the energy sector including transport, is said to account
for 79 per cent or 339 million tonnes in 1997, an increase of 15 per cent
between 1990 to 1997.
All these statistics are included in the National Greenhouse Gas Inventory,
which provides an indication of Australia's contribution to global greenhouse
gas emissions and the relative contribution of key industry sectors.
But how does this compare to the worth of our agricultural sector.
These are the facts:
- Australia's primary production of agriculture, including forestry and
fish products, has continued to grow in both volume and value of production
generally, and exports in particular.
- Over the seven years from 1990/91 to 1997/98 the value of primary production
according to the Australian Bureau of Statistics---rose from A$24.1 billion
to A$31.8 billion. An average growth of about A$1. 1 billion per year over
the seven years, and a seven year growth of 32 per cent.
- The past 20 years have been characterised by spurts of export growth
and then periods of stability---the value of exports of primary products
was stable at about A$8 billion from 1979/80 to 1983/84, then grew for
three years to reach about A$14 billion; remained static 'til about 1990/91
and has grown each year since then to $25.1 billion (nearly 25 per cent
of our export income), making the 1990s one of the fastest real growth
periods for primary production exports in the last 35 years.
I should point out that this growth occurred despite drought, major problems
in the wool industry, a downturn in beef prices and the Asian economic crisis.
We have been able to achieve this result because of productivity increases.
With this in mind, you can see why the rural sector is very concerned
about just this short list of agricultural practices causing greenhouse
emissions---they include nearly everything we do as farmers to make a living.
As you will be aware, the Greenhouse Gas Inventory is compiled under
the Framework Convention on Climate Change, and covers emissions and sinks
of greenhouse gases arising from human-induced activities---for all sectors,
and nearly all greenhouse gases.
But the reports do not actually represent our performance against the
Kyoto Protocol ... those guidelines, including the 1990 baseline, are still
Worse---the outcomes of those complex negotiations will be influenced
by groups within the community whose arguments are often not governed by
rational debate, and who could become the unwitting pawns of global interests
totally disinterested in how it all affects Australian business and the
Australian community generally. These are groups of people who do not have
to bear any of the costs involved.
We will have to wait until this November, when the unresolved issues
associated with the Kyoto Protocol will be discussed at the international
COP6 (Conference of the Parties) meeting, to find out how successful our
campaign to address this challenge has been.
A high degree of uncertainty continues for Australia and agriculture
about the outcome of the Kyoto Protocol:
- global (Australia produces only 1.4 per cent of total emissions);
- political (if the US does not sign the Protocol then it's unlikely
that it will be ratified and so targets will not be enforced);
- scientific (considerable uncertainty is still attached to measurements
in the agriculture and land use sector); and
- carbon trading (how---if at all will it be done, and will it offer
returns for small players. Will they end up bearing the costs and not reaping
the appropriate benefits).
For a sector like agriculture, made up of many small players (approximately
120,000), it's difficult to go forward when we are confronted by so much
that is ill-defined.
For example, the uncertainty associated with emissions from the agriculture
sector is thought to be between 20 and 80 per cent. And that's admitted
to by the Government's own agency.
We are still having some difficulty working out precisely what is and
what is not included in the term 'land use change and forestry'.
With this and other unresolved issues, and given that the people who
make up the sector are already dubious about them---it's unlikely that farmers
will be quick to embrace any response strategies to greenhouse that do not
have some other hip pocket benefit.
However, although there is considerable uncertainty and the return to
agriculture from any commitment of resources in response to greenhouse is
questionable, it must be recognised that our Federal Government is investing
significant resources in Australia's response to the Kyoto Protocol.
At a workshop on greenhouse and agriculture held earlier this year, Agriculture
Minister Warren Truss said: "It is now internationally accepted---including
by Australia---that global warming is taking place as a result of greenhouse
gases entering the atmosphere."
Overall, the Federal Government has committed almost $1 billion to a
wide range of initiatives designed to address Australia's greenhouse gas
That has not prevented senior Federal Cabinet Ministers reportedly disagreeing
about whether to pull the greenhouse trigger that would require major industry
proposals to gain government approval under the Environment Protection and
Biodiversity Conservation Act for any project that emits 500,000 tonnes
or more of carbon dioxide equivalent emissions.
On the one hand, Environment Minister Robert Hill says the trigger is
in response to our commitments under Kyoto.
On the other, National Party leader John Anderson, says pulling the trigger
will add another layer of complexity; delaying economic development proposals;
therefore causing business to think twice about investing in Australia.
I imagine that if the measurement and accounting principles could be
resolved, some larger agricultural enterprises could also be caught under
So what can the individual farmer do to respond to this ... well. there
is now a strong push in the agricultural sector toward more sustainable
production and repairing the resource base, which in effect will restore
carbon back into the landscape.
No-regrets measures, particularly incentives to protect vegetation, which
enhance greenhouse sinks and have biodiversity spin offs, will encourage
sustainable agriculture practices such as:
- minimum tillage used increasingly by Australian farmers reduces soil
disturbance and retains organic matter in soil ... it will also lead to
a steady reduction in emissions;
- farm forestry, which not only acts as a carbon sink, but has multiple
benefits, such as land degradation amelioration, diversification of farm
income and biodiversity benefits; and
- conservation of remnant vegetation---fencing off remnants and allowing
managed regrowth to act as carbon sinks and, again, produce biodiversity
Further measures might come from the CSIRO, which is not only working
on a vaccine to inhibit the production of methane from livestock, but is
also undertaking a feasibility study into a system combining solar and fossil
fuels energy to slash greenhouse emissions.
The opportunity for 'carbon farming' and the sinks' capacity that rural
areas could offer is agriculture's primary opportunity from the greenhouse
If there is to be considerable investment in reducing the emission of
carbon into the atmosphere, Australia as a country has a strategic opportunity
to drive that investment into the restoration of rural areas.
This could help secure a sustainable future for our natural resource
base, and help protect our international position on climate change and
hence the economy.
This will probably include a system of emissions trading, if one can
be developed and implemented.
Under the Kyoto Protocol, farmers may be able to enter into contracts
with carbon producing companies to plant trees---a system of carbon credits
that may well capture benefits for companies and farmers.
There's considerable interest in this, as there's a view that it offers
one of the least-cost alternatives for Australia in its response to Greenhouse.
The jury remains out however, as to how a sector such as agriculture---with
its large number of small, dispersed and diverse enterprises---could participate
profitably in such a regime.
Further, the prospect that farm forestry could represent real returns
for farmers through carbon trading remains in doubt.
There's considerable uncertainty about accounting processes, transaction
costs, and other impediments, that would need to be resolved if individual
farming enterprises were to be included.
These include high up-front costs. There's a high initial capital cost
in fencing and planting of trees for farm forestry, as well as a long lead-time---in
some cases at least 20 years---before any direct financial return is obtained.
Farmers planning farm forestry schemes also face anomalies in taxation
arrangements and a lack of certainty about future environmental controls.
These impediments must be addressed at State and Federal Government level
for farmers to actively engage in the battle against emissions.
Some positive actions that Governments can take are to improve the linkages
and complementarity with other existing environmental programs, particularly
Landcare, with greenhouse initiatives.
This would appear to be a suitable task for the Commonwealth Greenhouse
Office, which will be responsible for the delivery of greenhouse programs
and provide a central point of contact for industry and other stakeholder
On a pragmatic note, it should be understood that significant tree sinks
will require thousands of hectares to be planted under trees, in areas where
there is sufficient rainfall and the climate is suitable.
Large-scale plantation forestry is also likely to have a significant
impact on rural communities and their economies. In New Zealand, some rural
communities have experienced a shift from agricultural production of sheep
and cattle to forestry, and we could expect to see a similar shift here.
There also continues to be the unresolved issue of the immediate accounting
of the emission of carbon as soon as a forest is felled. If this remains
the case, the ability of small-scale farm forestry enterprises to earn a
return on carbon sinks, if they also pay the carbon penalty when the crop
is harvested looks highly improbable.
With scientific evidence showing that much of our landscape must be revegetated,
barriers such as this one must be seriously addressed at a policy level.
Despite all the efforts directed at trying to quantify land clearing
and vegetation re-growth in Australia over the past few years, there are
still considerable uncertainties about rates of clearing and rates of re-growth.
Even to take part in discussing this issue implies acceptance of an agenda
that has less than adequate scientific rationale.
The Kyoto Protocol also acknowledged changing land use and decreasing
land clearing in rural Australia, and the Federal Government appears confident
that existing State Government controls aimed at reducing land clearing
will be sufficient to meet the Kyoto target.
However, other steps need to be taken to address the problem.
They include a need to assess the potential impacts of greenhouse gases
There's also an obvious need to improve fuel efficiency in all sectors.
All of us concerned about the environment need to pressure governments
to encourage transition to cleaner fuel where appropriate and where it's
It will be important to ensure that greenhouse responses have minimal
impact on farmers' competitiveness, especially in terms of transport and
other costs of production.
As I have said, the key outcomes of the Kyoto Protocol for us---the inclusion
of land use change and re-planting programs, and the agreement to treat
emissions from land use change and revegetation programs in the same way
as other sectors (like energy)---could allow Australia to take into account
changes in net emissions from the land clearing sector.
In 1990 land clearing accounted for 24 per cent of Australia's emissions,
but more recent figures, especially in Queensland, show a substantial reduction
in land clearing.
The Queensland Department of Natural Resources now estimates that the
average annual tree clearing rate for Queensland between 1991 and 1995 has
been revised downwards from around 308,000 hectares a year to 262,000 hectares
Those figures also show that 53 per cent of all clearing in Queensland
takes place in the brigalow belt region (some sectors of the community would
have us believe that all tree clearing involves old growth 30-metre tall
red gums), with around 55 per cent occurring on leasehold land, 42 per cent
taking place on freehold land and three per cent on Crown land.
Preliminary figures from the Department show the rate of tree clearing
has declined by around 21 per cent in the 1991--95 period, compared with
the 1988--91 period. (Ironically, the recent threat of regulation of land
clearing in Queensland, led to reported significant increases in the practice.)
It is clear---regardless of the directions we take---that greenhouse
raises some significant issues for agriculture's future competitiveness.
Under-estimation of greenhouse impacts and agriculture's responses to
this could have profound implications, as would acceptance of the currently
Our limited experience to date shows that the impact of today's greenhouse
policies will affect individuals, communities and businesses engaged in
agriculture, and will have differential effects across those groups. Policies
driving in other directions are equally likely to have different, but significant,
By the Australian Greenhouse Office's own admission, our greenhouse policy
decisions are based upon an extraordinary level of scientific uncertainty.
This not only applies to the 'big' greenhouse issues, but also the little
'greenhouse issues. For example, decisions made by the individual farmer.
While science is always an issue of probabilities, the confidence levels
around those probabilities need to be significantly narrowed, at least so
we can have a better handle on whether some of our current evidence is a
result of normal weather variations, or is a result of greenhouse phenomena.
For individual farmers, it may be an enormous challenge to get the balance
right between adopting pro-greenhouse policies and business as usual.
Currently, our greenhouse policies are being driven more by politics
than by science.
For the future of agriculture, and those people involved in the sector,
we need to resolve the science urgently.