Climate policy opinion editorial

Climate change: for the National Farmers’ Federation it’s not that complicated. We want a strong future for farmers and agriculture. Simple.

The NFF supports an economy wide net zero emissions target by 2050 but only where it makes economic sense to do so, and only where there is no unnecessary red tape. Farmers must not be disadvantaged.

While having a target is an important discussion point, there are a lot of moving parts that need to be addressed for agriculture to play its best part in working towards a shared target.

For agriculture, climate change adaptation and mitigation means both sequestration and emissions reduction.
Ruminant livestock and most cropping operations emit methane and nitrogen respectively. Intensive livestock (pigs and dairy) also emit but there is technology already available to capture and transform these emissions into renewable energy. There is a natural carbon cycle in agriculture production systems: managing it needs some refining and we have more to learn about this.

Enhancement (thickening or planting) of trees and well managed soils can sequester carbon. But it’s not our job to be the carbon sink for the planet, it must make economic sense and be integrated into farming systems. It also needs to be well managed, especially in the context of feral pests.

Farmers clearly walk both sides of the fence and they have also already given – a lot.

When the Howard Government signed up to the Kyoto Agreement it determined that to meet our country’s obligations it would not create an imposition on (presumably predominately fossil-based) industries that were a significant contributor to Australia’s export income (save agriculture).

Instead the solution adopted was to empower the states (give them money) to limit land clearing. The method was for the introduction of land clearing laws that retained carbon sinks.

Farmers were limited as they never had been before to a particular land use. Their property rights were seriously infringed. And, in a very bitter pill to swallow, the states kept the money.

The end result: farmers were key to Australia overachieving on the nation’s Kyoto commitment, and they got nothing in return. Agriculture Minister Littleproud nails it when he says there needs to be a squaring up of the ledger for the rural sector. Some have described it as statutory theft.

This time round, farmers are right to expect a different approach. This approach must be fair and we and we must be adequately supported.

Farmers are up for the discussion, and we want to be a part of the solution, where it makes economic sense to do so. As always, farmers will adapt and adopt, we are leaders in innovation but we won’t do it alone, or for free.

We are quite rightly cautious, and not only because of past wrongs.

Carbon trading is complicated, and it’s probably more complicated than it needs to be in the context of the Commonwealth’s Emission Reduction Fund (ERF). There are two levels of complication here, firstly there are international agreements, or rules, that must be adhered to. These include, for example, that sequestered carbon must meet a so-called permanence threshold. It also includes by the way an agreement on the timeframe for measuring Global Warming Potential, which is 100 years, known as GWP 100. Turns out that this (at least) misrepresents the GWP of methane which is much shorter lived in the atmosphere and would be more fairly reported under a thing called GWP*.

Secondly, there is the national interpretation of those international rules. A cynic might say that when the ERF was established it was done so in order to make it so robust and defensible that the compliance requirements were so demanding that it barely made it economic to engage, but also that it needed an expert to navigate the requirements that created a new industry of brokers or accumulators whose costs also need to be met. The penultimate frustration is that it is set up as a reverse auction so the lowest price wins, meaning Australian carbon prices are about $17/tonne while in the EU it is $50-70. Which is the final frustration, international trading of Australian Carbon Credit Units (ACCUs) is not possible, even though they are of a very high quality, because the international rules do not currently allow it.

So, what does all of this mean for an individual farmer?

Number One: the farmer takes the ultimate risk in a carbon sequestration world.

Number two: not all carbon schemes are equal, beyond the ERF there are a range of (voluntary) schemes that have their own rules and requirements.

Number three: The baselines are not clearly known, nor are the options future innovations will bring. 

Farmers stand ready to deal with the challenges and to be a part of the solution but it needs to make sense, be fair and underpin continued growth for individual farm businesses and the industry’s goal to be a $100 billion sector by 2030.

* David Jochinke is the Vice President of the NFF