The proposal that agriculture be subject to a carbon tax must rank as one of the worst aspects of the rush to tax carbon dioxide.
Our agricultural exports are enjoyed by others elsewhere on the planet, yet the government is being urged to draw into the carbon tax scheme a major export activity where any extra cost imposition has little to offer in changing behaviour and much to fear from unintended consequences.
Although agriculture is only 2 per cent of our GDP, two thirds of its products are exported. Agriculture is responsible for 13 per cent of our merchandise exports, reported in great detail by the Australian Bureau of Statistics and totaling $32 billion in 2008-09. The Department of Climate Change has modeled Australia’s greenhouse gas emissions from agriculture and estimated that it is 15 per cent of our total emissions. The certainty of our export statistics is in stark contrast to the unverifiable estimate of the agricultural emissions.
What is rarely mentioned is that the carbon being counted is not “old carbon” from fossil fuels being returned to the atmosphere after a long rest, it is “contemporary carbon” recycled in the atmosphere. It comes from the atmosphere to plants by way of photosynthesis to animals as feed and so through enteric fermentation and metabolism the carbon goes back in part to the atmosphere. The output is to be assessed but no credit is given to the input!
In 2008 the Australia Institute published a paper, Agriculture and Emissions Trading: The impossible dream? Hugh Saddler and Helen King quoted considerable uncertainties in emission estimates for agriculture derived from the National Inventory Report 2006.
Livestock are responsible, through enteric fermentation, for 10 per cent of the estimated total greenhouse gas emissions from all our activities in Australia. This is an unverifiable estimate. It started with emissions from a unit cow, the “British Standard Cow” adapted to Australian conditions. Then as agricultural research groups sensed the importance of the issue of methane unit emissions were estimated from direct measurements in the field. So you start with unit emissions of sheep and cattle then livestock numbers, age, geographical regions and feed all mixed together to give the estimate with a claimed accuracy of 5 per cent. This is as accurate as that for emissions from electricity sector where there are about 65 fossil fuel powered generators as opposed to a total of about 100 million cattle and sheep!
So from the science we have no credit for the carbon input but the output is counted against us. We have an estimate of 10 per cent of emissions that must be open to serious doubt as it is modeled and not measured in any comprehensive way. We have the balance of 5 per cent that is related to soil and fertilizers where the uncertainties are of the order of 50 per cent.
In the 2010 Agriculture emission projections, from the Department of Climate Change and Energy Efficiency, there is a decline in enteric emissions from 1990 to 2009 while no significant increase is projected up to 2030. A word search in the document found no mention of “error”,” accuracy” or “uncertainty” at any point except at the start where “the Commonwealth does not accept responsibility for the accuracy or completeness of the contents”.
Nonetheless, these estimates will be used to support methane reduction programs and most likely a carbon tax. Yet the emission calculations are not verifiable in bulk and measurement would be heroic for 136,000 individual farms. Further the projections suggest that no action is needed.
This is a bad basis from which to develop a carbon tax on individual farms.
The economy and policy development
Food is the essential energy supply for humans in the same way that distributed energy is essential for modern industrialized societies. For policy development there must be great difficulties in modeling the effects of a tax on carbon in food since the tax will have universal reach and unknowable consequences. There are no alternatives to the energy we get from food so how will the community react?
We are the world’s largest exporter of wool and the second largest exporter of meat, wheat and sugar. We sell into world markets where others receive massive government subsidies. Any increase in the local costs of production will only weaken our trading position. The cost increase also makes food imports more competitive. So if anything needed to be done, it would be better to have a consumption tax, a global emissions tax on goods, a GET that would pick up onshore and offshore emissions.
The proposed carbon farming initiative provides an incentive for planting large areas of trees and their maintenance for 100 years or more (as envisaged by the Kyoto Protocol) that would remove major areas of land from food production. The proposal would make it virtually impossible for an individual farmer to remove the trees and revert to food production. Against a background of increasing world and national population this is contrary both to Australia’s international obligations and its self interest.
Further the extension of the carbon tax scheme to include agriculture has not been thought through. It is based on a poorly measured by-product of agricultural production, one of our most important economic activities.
There is an engine that drives these policies. It is the research sector where grants are to be had by following the needs of government. The CSIRO knows all about this! Perhaps we should just settle for the geo-sequestration of the herd and take to eating kangaroos as discussed in the Garnaut Review.