Farm force
Australia may have a New Zealand-style emissions trading scheme – centred around agriculture – quicker than anyone might have expected before the election.
It is just one of the fascinating scenarios being painted by observers and analysts as the trio of country, or “populist agrarian”, independents prepare to begin negotiations with the mainstream political parties.
The very idea of an ETS, in any form, seemed inconceivable last Friday. But one focused on agriculture, and possibly the energy industry, could be a deal-maker, along with the broadband network.
The great irony of this would be that agriculture was excluded from the ill-fated CPRS because the leading farming bodies couldn’t get their mind around the matter.
But what has made a change entirely conceivable is the huge popularity of the recently introduced ETS among the farming community in New Zealand, and a wholesale change of attitude in the US.
This has been accompanied by a growing appreciation in Australia – including among the three independents in question – that a carbon trading scheme could provide enormous opportunities for farmers.
For the past several weeks, New Zealand government ministers and bureaucrats have barely missed an opportunity to trumpet the positive reception to that country’s ETS. The decline in forestry plantings has been dramatically reversed, and farmers are finding new and profitable uses for marginal lands, particularly those that have steep, erosion-prone and largely unproductive land.
Bloomberg reported late last week that New Zealand’s sheep farmers are flocking to a government carbon trading program because some of them are finding that it pays more to plant trees than sell wool and mutton.
“The New Zealand experience shows that bringing in an ETS could be very positive,” says Anthony Hobley, the head of climate change practice at legal firm Norton Rose. Hobley says that, while the US legislation didn’t get up, the idea of an ETS was receiving positive support from the agricultural community because of the way that it was designed.
One of the three country independents, Rob Oakeshott, made it clear yesterday that re-engaging the mainstream parties on the subject of an ETS would be one of his biggest priorities. The other two are likely to be sympathetic if it can be skewed in favour of their rural constituencies.
“The independents, on balance, seem to support action on climate change,” Deutsche Bank analyst Tim Jordan wrote in a report on Monday. He says an ETS could be accelerated, particularly under a minority Labor government.
The irony is that it would only need a small flick of the switch for either mainstream party to support such a measure. Tony Abbott would simply need to re-brand his party’s proposed “abatement market” for soil carbon, and allow it to include forestry, and for the units to be traded, rather than simply bought by the taxpayer.
That shouldn’t be beyond the bounds of a classic conservative agenda that trumpets free markets and small government. He could even use the opportunity to rebrand the “great big new tax” slogan and call it a “great big new asset”.
For Labor, it would simply mean bringing a much abbreviated CPRS back into the sort of timetable that had been envisaged when they were originally elected in 2007, even if it means bypassing the citizen’s assembly.
An agricultural-based scheme would be relatively simple – at least compared to Labor's CPRS – and simplicity and clarity is key if a carbon price is to successfully introduced.
To make any sense at all, any ETS would need to include at least an energy-based carbon price, as either a tax or a market-based scheme. But that should not be too controversial, because it is now well accepted that the tens of billions of investment so desperately needed in the sector cannot be made without it.
In the energy industry, no one pretends that a carbon price of some sort will not emerge at some point: better for all to deal with it now.
The Greens, however, will be in a position from next July to demand less indulgence towards the heavy emitters than was offered in the CPRS, and might be convinced to allow a staged introduction – with mechanisms to bring in a softer tax-based scheme in other sectors over time – if that was the case. That is the sort of hybrid scheme that was entertained by US Congress before it was all put in the too-hard basket so close to the mid-term elections.
The influence of the country politicians, and their ability to guide the debate towards the substantive issues, rather than rhetoric, could provide a surprising and unique opportunity to develop good policy. That is the attraction of an influential third force.
Comments on this article
carbon tax
Well we have to accept the truth about the facts of global warming, but I don't think the carbon tax is going to solve any of these problems; instead it is going to make the small entrepreneurs job more complicated, I am owner of a small <a href="http://www.growhouse-greenhouses.co.uk/greenhouses.php">Greenhouses</a> and I am worried about the carbon tax
Dead seedlings don't capture much carbon
This is all lovely on paper but who keeps those trees alive? Where do they get the water? Who pays the wages involved? Carbon sequestration is not a free cashflow, I doubt that the credits will justify the cost of establishing and maintaining the plantation.
Australia's Carbon Cockies
Farmers are progressive thinkers who are adapting faster to Climate Change that other sectors of the Economy. Penny Wong's Agriculture supremo Dr Bill Slattery said farmers will always be ahead of the scientific establisment when it comes to innovation. What is holding us back is not rural conservatism or stupidity, it is Science. The fourth annual Carbon Farming Conference and Expo will be held in Dubbo in October. These conferences have been organised by farmers seeking to align science with the needs of the times. At the current rate of productivity, the disaster will have happened by the time science delivers a sound strategy. Behold, a senior CSIRO scientist recently revealed (in a submission to the Productivity Commission's Inquiry into Government-funded Agricultural Science) that much establishment science produces only artefacts of the laboratory, with no practical application in the field (or the market). People building careers, not solutions. The roles of the NFF, Farm Institute, CSIRO, GRDC, etc. in the debate about soil carbon has been almost entirely negative and backward-looking. Farmers aren't the problem. It's the shiny bums in the cities on salaries that claim to represent farmers and their interests need to get off their glutes and smell the soil. (Carbon-rich soil has a characteristic aroma.)
PS. Well done John HILL.
If the kind of things talked
If the kind of things talked about in this article come out of this hung parliament, then it will be a good thing & well worth it.
Farm force
I am sure Farmers will do well out of this scheme, by using their land to do something other r=than farm, they will get paid for it. They will also get paid for unproductive land. Who will pay for this - as always, the taxpayer. Contacts from NZ reported widespread clear cutting of mature trees before their ETSscheme was instituted to create room to (you guessed it) plant new trees so that they could get paid for them. The old trees are rotting on the ground in many places, but the landowners are laughing all the way to the bank.
I would like to see legislation that helped farmers to farm, but this again paying people to do nothing useful in the name of nothing useful. Biofuels are another rort as they are inefficient as fuel, expensive and create more Co2 than they save.
Farm force
I am sure Farmers will do well out of this scheme, by using their land to do something other r=than farm, they will get paid for it. They will also get paid for unproductive land. Who will pay for this - as always, the taxpayer. Contacts from NZ reported widespread clear cutting of mature trees before their ETSscheme was instituted to create room to (you guessed it) plant new trees so that they could get paid for them. The old trees are rotting on the ground in many places, but the landowners are laughing all the way to the bank.
I would like to see legislation that helped farmers to farm, but this again paying people to do nothing useful in the name of nothing useful. Biofuels are another rort as they are inefficient as fuel, expensive and create more Co2 than they save.
Carbon
why as a nation start something that allows a farmer to harvest est 1% of wooded property and plant 35 tonne pHa CO2- carbon sequestrators, burn it with oxygen to produce charcoal on a 100 year rotation cycle, providing they manage and weigh the charcoal with multiple million Ha, farmers can sequestrate the entire Co2 output of the nation.
'the buried charcoal would replace the fertilzer application
We have a co2 sequestration industry waiting to happen and without cost to the taxpayer
Let me see if I understand this;
The farmers take unproductive land which they own or they take productive land out of production and plant trees.
Perhaps they even go out and buy unproductive land and plant the trees.
Hmmm, interesting, what do we eat ?
Energy based carbon price
Thanks John. I think I put it badly. I meant a carbon price that covered the energy sector only, which is sort of what NZ has and what the EU started with, and was suggested as a compromise deal in the US. We don't seem to have had that discussion in Australia yet.
In response to other comments, it would be interesting to see what they came up with, if anything. I'd imagine that any tradable scheme would like to focused on forestry, as it might be difficult to include soil carbon, for all its potential, until there is better agreement on the science and methodology.
What is an "energy-based" carbon price?
Giles, you said "any ETS would need to include at least an energy-based carbon price".
What does this mean? Isn't the greenhouse effect of CO2-e the target?
Agreed!
Giles - good read and let's hope the Ministers in both camps embrace this concept and give it some serious thought - the US also has been looking to move to a reduced ETS which focuses on specific sectors instead of being applied across the board - I think it has some traction and can be designed to bring other industries on board over the coming decade as they gain a stronger understanding of the mechanics of the system...
Abbott should get Turnbull involved
Malcolm Turnbull, as Environment Minister, did much to research the use of soil as a carbon capture device. As someone with a mind able to get across the financial and trading issues of including soils and farming in general in a new carbon trading scheme, Tony Abbott would do well to get him involved.
Spot on
It may surprise many that people in agribusiness are not all skeptics. This article mirrors my conversations with leading farmers and graziers across the country - and yes, a few even voted Green in the senate.
Australia leads the world in scaling up conservation farming techniques such as zero till and precision farming, and our farmers are no strangers to rapid adoption of new technologies. In the last 10 years Australian farmers have cut their diesel consumption by over 15% with the use of GPS auto-steering technology to eliminate overlap and rework. This innovation has now filtered to all other major farming nations.
The potential of soil carbon and plantations for sequestration is now a hot topic on the farm. If we can turn the rural lobby's ETS fighting fund towards funding the science of soil carbon, we will make farmers partners in the climate change battle... without destroying farm productivity and the world's food supply.