Update Paper 4: Transforming rural land use

Released 1 March 2011

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Summary of key points

• The land sectors will be greatly affected both by climate change and its mitigation. Science-based knowledge and flexibility of production systems will be the keys to success in this new world, as they have been throughout the history of Australian farming.
• The rural sector is a major source of emissions, but at the same time holds tremendous opportunities to play a significant role in Australia’s mitigation effort.
• These opportunities could also significantly improve the economic prospects for Australian farmers.
• Emissions from the land sector account for 20 per cent of Australian emissions (2008) and around 26 per cent of global emissions (2005).
• The natural processes of biosequestration must be central to any ambitious global effort to meet targets for limiting temperature increase, and are the only known channel for actually reducing concentrations after emissions targets have been exceeded.
• Improvements to emissions estimation methods and mechanisms for monitoring permanence of sequestration remain critical requirements for further developing and realising mitigation strategies in rural Australia.
• The development of international frameworks needs to accommodate greater incentives for countries to reduce emissions and increase biosequestration across a broader range of land management activities.
• Australia can define best practice on accounting approaches and emissions management by adopting domestic mitigation measures with broad coverage and full recognition of co-benefits.
• Movement toward comprehensive coverage of all land sectors under a carbon pricing mechanism would yield economic and environmental benefits.
• The Government’s proposed Carbon Farming Initiative will break new and productive ground for offset schemes in Australia and internationally. However, there is a case for:
• reconsideration of the ‘financial additionality’ requirement of the scheme; and
• establishing a link between the Carbon Farming Initiative and an emission trading scheme.
• This could involve allowing businesses covered under the scheme to purchase Kyoto offsets directly to meet part of their emissions liability and the scheme regulator purchasing non-Kyoto offsets.

• While offset schemes, and a carbon price, will provide incentives for increased biosequestration activities, they should be supported by other incentives and regulatory safeguards to help encourage co-benefits, such as for biodiversity.

• Our understanding of the feasibility and potential scale of a range of biosequestration and emission reduction options in Australia’s land sectors has improved since 2008, and work since then has confirmed the potential identified in the Review.
• The high food prices before the Great Crash of 2008, and the return to record levels in 2010 and the first months of 2011, is an early taste of the world of climate change and its mitigation. This represents opportunities for Australian farmers to maintain production and profitability despite climate change, as well as a challenge for global development.