Political momentum is growing in Australia to reduce greenhouse gas emissions to zero by 2050. Treasurer Josh Frydenberg was the last member of the Federal Government to back the target on Friday, and over the weekend End, Prime Minister Scott Morrison acknowledged âthe world is in transition to a new energy economyâ.
But for Australia to reach net zero in the entire economy, emissions from agriculture must drop dramatically. Agriculture contributed around 15% of Australia’s greenhouse gas emissions in 2019, most of which came from cattle and sheep. If herd numbers recover from the recent drought, emissions from the sector are expected to increase.
Reducing agricultural emissions will not be easy. The difficulties have reportedly raised concerns among Nationals about the cost of the transition for farmers, including calls for agriculture to be excluded from any net zero targets.
But as our new Grattan Institute report makes clear today, agriculture should not benefit from this exemption. Instead, the federal government should do more to encourage farmers to adopt low-emission technologies and practices – some of which can be deployed now.
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Three good reasons why farmers need to go to zero
Many farmers want to be part of the climate solution – and need to be – for three main reasons.
First, the agricultural sector is particularly vulnerable to climate change. Already, changes in rainfall have reduced profits across the sector by 23% compared to what could have been achieved under pre-2000 conditions. The effect is even worse for farmers.
Farmers also face risks. If global warming reaches 3 â, cattle in northern Australia would experience heat stress almost daily.
Second, parts of the sector are highly exposed to international markets – for example, around three-quarters of Australia’s red meat is exported.
There are fears that Australian producers may face a border tax in some markets if they do not reduce their emissions. The European Union, for example, plans to introduce tariffs as early as 2023 on certain products from countries without effective carbon pricing, although agriculture is not initially included.
Third, the industry recognizes that action on climate change can often increase agricultural productivity or help farmers secure resilient income streams. For example, trees provide shade for animals, while good soil management can preserve soil fertility. Both activities can store carbon and generate carbon credits.
Carbon credits can be used to offset agricultural emissions or sold to other emitters. In a net zero future, farmers can maximize income from their carbon credits by minimizing their own emissions, leaving them with more carbon credits to sell.
The agricultural sector itself is increasingly adopting the net zero goal. The National Farmers Federation supports an economy-wide aspiration to be net-zero by 2050, with certain conditions. The red meat and pork industries have gone further by committing to be carbon neutral by 2030 and 2025 respectively.
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What can be done?
Australian agricultural activities emitted around 76 million tonnes of carbon dioxide equivalent emissions in 2019. Of this total, about 48 million tonnes were methane belched by cattle and sheep, with an additional 11 million coming from their feces.
The sector’s non-animal emissions came largely from the combustion of diesel, the use of fertilizers and the decomposition of leftover plant material from crops.
Unlike, for example, in the electricity sector, it is not possible to completely eliminate agricultural emissions, and significant emission reductions appear difficult in the short term. In fact, the methane produced in the stomachs of cattle and sheep represents more than 60% of agricultural emissions; these cannot be captured or eliminated by renewable energy technology.
Supplements added to feed – which reduce the amount of methane produced by the animal – are the most promising options for reducing agricultural emissions. These supplements include red algae and the chemical 3-nitrooxypropanol, both of which can reduce methane by up to 90% if used consistently in the right dose.
But it is difficult to distribute these dietary supplements daily to grazing Australian cattle and sheep. At any given time, only around 4% of Australian cattle are in feedlots where their diet can be easily controlled.
Diesel usage can be reduced by electrifying agricultural machinery, but electric models are not yet widely available or affordable for all uses.
These challenges slow down the realistic rate at which the sector can reduce emissions. Yet there are things that can be done today.
Many manure emissions can be avoided with smarter management. For example, on intensive livestock farms, manure is often stored in ponds where it releases methane. This methane can be captured and burned, instead emitting the weakest greenhouse gas, carbon dioxide.
And better targeted fertilizer use is a clear win-win – it would save farmers money and reduce emissions of nitrous oxide, a potent greenhouse gas.
Governments must walk and chew gum
An economy-wide carbon price would be Australia’s best way to reduce emissions in an economically efficient manner. But the political reality is that carbon pricing is out of reach, at least for now. Australia should therefore pursue sectoral policies, including in agriculture.
Governments must walk and chew gum. This means introducing policies to support the emissions reduction actions farmers can take today, while investing alongside industry in potential long-term, high impact solutions.
Accelerating action in the short term will require upgrading the Federal Government’s Emissions Reduction Fund, to help more farmers generate Australian carbon credit units. It will also require more investment in awareness programs to give farmers the knowledge they need to reduce emissions.
Improving the long-term emissions outlook for the agricultural sector requires investments in research, development and high-impact deployment. It is possible to reduce the cost of new technologies with large-scale deployment: all governments should consider what combination of subsidies, penalties and regulations will best suit this.
Agriculture must not become the missing piece of Australia’s net zero puzzle. Without action today, the sector could become Australia’s biggest source of emissions for decades to come. This would require extremely expensive carbon offsetting – paid for by taxpayers, consumers and the farmers themselves.
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