Under Carbon Tax, Transport Costs are Likely to Increase for Farmers; the Australian Government's Plan is to Provide Farmers with a 'Direct Incentive to Cut Their Carbon Pollution'
Farming and the Carbon Tax: What's in Store?
ABC News - Even though agricultural emissions will not be taxed under the Federal Government's carbon pricing plan, farmers will still feel considerable effects as Australia moves towards a low-carbon economy.
ABC News Online talked to key experts about what the carbon plan means for the land-based sector.
Money, money, money
Kevin Parton, a professor at the Institute for Land, Water and Society at Charles Sturt University, says it is no surprise that agricultural emissions are not included in the carbon tax scheme.
"It is the same across the world in terms of the arrangements," he said.
"It's probably because individuals' farms are too small in themselves and it's probably too hard to assess individual emissions. Administration of such a scheme would be very complex."
But the Government will shell out a cool $1.9 billion over six years to encourage farmers to cut emissions and to develop techniques for storing carbon.
There are various ways this money will be handed out, but much of the focus is on the research and development of storing carbon as well as carbon credits.
"The key components are $946 million over six years for a Biodiversity Fund and $429 million Carbon Farming Futures program," said Professor Snow Barlow from School of Land and Environment at the University of Melbourne.
"This is about preparing the agricultural sector to begin to undertake activities that will serve them very well when there is a commitment for agriculture under any future national or global agreements," Professor Barlow said.Storing carbon
Carbon capture and storage, or carbon sequestration, is seen as a possible way of removing growing levels of CO2 from the atmosphere.
It involves extracting CO2 from industrial emissions and storing them in such a way that they will not re-enter the atmosphere. One such way is what is known as geosequestration, which sees the gas compressed into a liquid form and pumped deep into the ground for permanent storage.
Professor Parton says investing money in developing more ways to store carbon is a good plan.
"Millions of dollars of research are going into that and it's probably money well spent because there could well be in five or six years a very useful scheme," he said.
"Australia's a land-based economy so there's great potential to sequester carbon in soil.
"But with respect to storing carbon in soil, the research isn't complete yet to know whether a scheme would be viable or not to give farmers an incentive to store carbon.
"It's certainly possible to store carbon but the question is how much [can be stored] and how much would it cost to do?"
Getting credit
Under the plan, the Government will buy carbon credits from farmers and landholders who are undertaking carbon-saving measures such as storing carbon and revegetation.
Both of the Government's two big programs - the Biodiversity Fund and the Carbon Farming Futures program - will generate carbon credits.
The 500 biggest polluting companies will then be able to buy credits in order to offset the amount of carbon tax they pay, but the amount they can buy annually will be capped.
Professor Barlow says there are various activities through which farmers and landholders can generate carbon credits. These include:
- Planting forests or plantations;
- Reducing methane emissions from animals;
- Reducing nitrous oxide emissions from fertilisers;
- Reducing emissions from savannah burning;
- Management of native forests;
- Revegetation of high conservation areas;
- Culling feral animals.
"Fuel's exempt and off-road vehicles are exempt [from the carbon price] - so that's looking pretty good for farms," Professor Parton said.
But while petrol for farm vehicles is exempt, the heavy transport industry will be slugged with a fuel excise.
That means transport costs are likely to increase for farmers in time, according to Professor Snow.
Changing their ways"Major transport - shipping, rail, air freight - will be taxed under the carbon tax scheme. Heavy transport - big trucks - is set for review for inclusion in 2014. So eventually road transport will be in," he said.
"There will be an increase in the transport costs for farmers in the long term.
"Treasury and Farm Institute modelling shows the average farm commitment might be in the region of $1,000 a year, but if farmers look for energy savings it is possible they could compensate for those increased costs."
A key part of the Government's plan is providing farmers with a direct incentive to cut their carbon pollution, Professor Barlow says.
"For a long time we've been talking about putting a price on carbon and putting a price on landholders' activities to improve the sustainability of their landscape by storing more carbon in it," he said.
"If farmers want to benefit from the carbon plan, they will need to engage in the new technologies and practices in order to manage their land to preserve the carbon in it in the way that some of them may not have been doing in the past."
Any possible hiccups?
Over the years, some of the nation's top climate scientists have called for agriculture to be part of an Australian carbon pricing plan to help achieve emission cuts.
Professor Barlow says this could be one way to improve the Government's current plan.
"One of the sleepers in this (Government's carbon plan) is (cutting agricultural emissions) not being part of the commitments under the carbon tax and the ETS that starts in 2015," Professor Barlow said.
"But some of us as researchers think that agriculture and food production can't remain out forever because the fundamental equation in the globe is that agriculture is about 15 to 20 per cent of emissions.
"If you cut global emissions by 50 per cent, which we need to by 2050, agriculture's going to stand out like a sore toe and people won't allow that."
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