Environmental Law

25/07/2016

Reducing Emissions from Agriculture: Australia’s Unique Approach (Part 2)

In my previous blog, I showed how various countries around the world are in the process of setting up offset schemes for agriculture, in an attempt to reduce greenhouse gas emissions from this sector. I also explained that Australia has a unique position as it has the longest operating system in place, and one that currently is not linked to emissions trading but is a stand-alone system. Technically, therefore, Australia’s Carbon Farming Initiative, is not an offset instrument, but a regulatory instrument aimed at achieving emissions reductions in the land use sector on its own. In this blog, I will focus on some of the results that have been achieved with the system so far, based on an empirical research that I carried out.^[1] In case studies into selected CFI-projects and in a series of interviews with the key stakeholders, I searched for the experiences with the scheme in Australia, with the objective to draw lessons for other countries, including the EU as a whole, that wish to establish a policy aimed at reducing emissions from agriculture.

Sunset over rural Australia (Photo: J. Verschuuren)

My research found that the current legislation on carbon farming in Australia provides an elaborate, yet reliable legal framework that seems well suited to assess project applications and issue credits to participating farmers who, through these projects, generated real and additional emission reductions. It was especially interesting to find that a major overhaul of the legislation in 2015, delinking the scheme from emissions trading, really pushed the scheme forward. Not having to sell credits on the volatile international carbon market, but being able to rely on long term, fixed government money (called ‘Emissions Reduction Fund’), spurred Australia’s farmers into action. It shows that it is important to create long term certainty for farmers. Farmers who want to introduce carbon farming have to implement structural changes to their farming practices with long term impacts on their business. The policy environment, as well as the agribusiness’ financial environment, has to accommodate such long term impacts. This also implies that relying on the carbon market for funding should only be done when there is long term certainty that carbon credits will earn an acceptable minimum price.

Another interesting finding is that, although Australia’s carbon farming policy and the associated regulatory framework is only aimed at achieving as much greenhouse gas abatement as possible against the lowest possible costs, many project actually have important co-benefits. These co-benefits often are an as important and sometimes even more important stimulus for farmers to convert to carbon farming than the direct financial benefits arising from selling generated carbon credits to the government. Generally, it is found that the policy is leading to the introduction of better farming methods in an overall conservative sector. These methods are not just good for combatting climate change, but have many benefits for farmers and even for food security. Vegetation projects generally reduce salination and erosion and improve water retention. Soil carbon projects were especially mentioned for having an astonishing impact on soil quality. Research indicates that an increase in the level of soil organic carbon, leads to a drastic increase of water availability and fertility, and thus to an increase in agricultural production. One respondent referred to an example he knew, of two brothers who had farmland adjacent to each other: ‘One of them was involved in a soil carbon project, the other was not. After a while, you could clearly see the difference, with much more and better growing crops on the land of the first. The other brother had to drive across his brother’s land to reach his own land and saw the difference every day.’ Although many respondents stressed that conservatism, especially among older farmers, slows down the adoption of these new climate smart practices, they all felt that the farming sector is slowly changing and is taking up these new practices. Assessing the impact of soil carbon projects, however, is complex and several stakeholders indicated that ‘we are still learning how to do it under different circumstances.’ Since the regulatory framework requires farmers to carefully monitor what is happening in the soil, a lot of new knowledge is generated. One respondent said: ‘We are in fact doing large scale experiments with soil carbon, all thanks to the Emissions Reduction Fund.’ There are many interesting case studies available remarkable results of reduced carbon emissions, better growing conditions, more water availability, and more biodiversity under such programmes as ‘soils for life’ and ‘healthy soils’.

Increasing soil carbon, therefore, has strong positive side-effects on adaptation as they increase the resilience of the land and lead to greater efficiency. Here, mitigation and adaptation go hand in hand. The same is true for some of the other sequestration methods that are allowed under the Australian scheme, such as native tree planting in arid and semi-arid areas both to store carbon and to stop degradation and salinization of farmland.

Sometimes, there are also direct economic co-benefits associated to carbon farming projects. In the piggeries sector, for example, there are producers who save A$ 15,000 (roughly € 10,000) per month on energy bills and earn an additional A$ 15,000 by delivering energy to the grid after having adopted methane capture and biogas production technology. When asked whether the CFI/ERF was the push factor, or the expected economic co-benefit, the respondent from the pork sector said that the CFI/ERF was the main driver for the distribution of this technology: ‘About half of the participating producers jumped because of the CFI/ERF push. It especially pushes medium sized producers, because it increases their payback just enough to get involved. Eighteen biogas projects in piggeries have to date generated A$ 6 million (€3.9m) a year in electricity savings and A$ 10.2 million (€ 6.6m) through carbon credits under the Emissions Reduction Fund. The Fund really was the driver for most of these eighteen producers.’ It is clear, though, that for the longer term, these co-benefits will continue to exist on a yearly basis, also without carbon credits being purchased by the government.

Grazing land regeneration project in western New South Wales (Photo: http://www.soilsforlife.org.au)

From these findings, the lesson can be drawn that a policy that has a wider focus on adaptation, food security, resilient and sustainable farm businesses and securing and creating jobs in the agribusiness sector, is likely to be more successful than one that only focuses on reducing emissions from agriculture. Several of the methods accepted or under development in Australia, such as those dealing with soil carbon, show that such co-benefits can indeed be achieved. Developing climate smart methodologies that not only deliver real, additional, measurable and verifiable emission reductions but also foster long term innovation and create economic, social and environmental co-benefits is essential for the success of any policy aimed at stimulating climate smart agriculture. Science has to be central in the development and adoption of methods that are accepted under the regulatory framework. In Australia, much research effort has already gone into method development. This now has to be taken to a global level. In order to avoid that every country is trying to invent the wheel, international collaboration in method development is pivotal. The aim has to be to roll out climate smart agriculture policies across the world, so as to stimulate our farmers to make a switch from conventional farming to climate smart farming.

[1] An article covering all the results of the project will be published in early 2017.

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This project has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 655565.