Clean Energy Future

9.1 Climate change and the land

The fourth element of the Australian Government’s clean energy future plan—along with a carbon price, renewable energy, and energy efficiency—is action on the land. The farming, forestry and land sectors have just as important a role to play in reducing carbon pollution as governments, households and the wider business community.

People who live and work on the land know all too well the way extreme weather conditions like drought, flood and fire can affect local and national prosperity. Changes in temperature, rainfall, and extreme weather events will affect water availability, water and soil quality, fire risk and the incidence of pests, weeds and disease. Impacts will vary around the country but many farm producing areas face risks of adverse impacts on crop yields, pasture growth and livestock production.

Agriculture would be one of the Australian industries hardest hit by unmitigated climate change. The frequency and severity of drought is expected to increase and, according to the 2008 Garnaut Climate Change Review, this could see irrigated agriculture in the Murray Darling Basin decline by up to 92 per cent by 2100, undermining Australia’s capacity to grow and produce our own food.

The Government has decided to exclude the agricultural and land sectors from the carbon price. Farmers, forestry operators and other land managers will not pay a price for the carbon pollution from their activities. However, the Government wants to ensure that farmers and land managers who use their skills, experience and knowledge of the land to lower carbon pollution are rewarded for their efforts.

Australia’s natural assets mean that, while we may have significant levels of agricultural carbon pollution, we also have promising opportunities to store carbon on the land. Farmers have a direct stake in the health of the environment and they have a strong incentive to manage the land sustainably.

Carbon pollution on the land can be reduced by initiatives like capturing emissions from livestock manure or changing the way soil is tilled so that less carbon is released into the atmosphere. Conservation tillage practices seek to minimise soil disturbance and improve organic matter, as well as providing productivity benefits for farmers. Carbon can also be removed from the atmosphere and stored in vegetation. The Government will encourage and reward such action through its Carbon Farming Initiative.

Figure 9.1: Overview of land sector measures

9.2 Supporting farmers under a carbon price

The Government has decided to exclude the agricultural and land sectors from the carbon price. This means there will be no requirements for farmers to pay for pollution from livestock or fertiliser use. The carbon price also will not apply to off‑road fuel use by the agriculture, forestry and fishing industries.

While the carbon price will increase electricity costs, the costs of other farm inputs, such as fertiliser, are set by world markets rather than domestic policies.

Special assistance will be provided to food processors, which can have a relatively high exposure to energy costs. The Government’s $200 million Food and Foundries Investment Program will assist food processors and dairies improve the energy efficiency of their businesses to reduce the impact of a carbon price (see Chapter 5).

9.3 The Carbon Farming Initiative

The Carbon Farming Initiative is a carbon offsets scheme that will provide new economic opportunities for farmers, forest growers and landholders and help the environment by reducing carbon pollution. Farmers and land managers will be able to generate credits that can then be sold to other businesses wanting to offset their own carbon pollution.

Actions to reduce pollution or increase carbon storage can also increase the land sector’s resilience to climate change, protect Australia’s natural environment and improve long term farm productivity.

Legislation for the Carbon Farming Initiative was introduced to Parliament in March 2011 to provide long‑term certainty to participants and to underpin the environmental integrity and market value of carbon credits.

Land sector activities under the Carbon Farming Initiative

The Carbon Farming Initiative will allow land managers to earn credits—which can then generate income—for actions including:

• reforestation and revegetation
• reduced methane emissions from livestock digestion
• reduced fertiliser pollution
• manure management
• reduced pollution or increased carbon storage in agricultural soils (soil carbon)
• savanna fire management
• native forest protection
• forest management
• reduced pollution from burning of stubble and crop residue
• reduced pollution from rice cultivation
• reduced pollution from legacy landfill waste.

Over time researchers and land managers will find new ways of reducing pollution and increasing carbon storage in soils and vegetation.

Credits generated under the Carbon Farming Initiative that are recognised for Australia’s obligations under the Kyoto Protocol on climate change can be sold to companies with liabilities under the Carbon Pricing Mechanism (see Chapter 3). This includes credits earned from activities such as reforestation, savanna fire management and reductions in pollution from livestock and fertiliser.

The ongoing Carbon Farming Initiative non‑Kyoto Carbon Fund ($250 million over the first six years of the program) will provide incentives for other activities, including revegetation and soil carbon projects.

Australia will continue working to develop new international rules that recognise a wider range of action on the land to reduce pollution.

9.4 Biodiversity Fund

Australia has unique native ecosystems which are highly diverse. Biodiversity plays a crucial role in maintaining the productive capacity of our landscape. Biodiversity can act as a buffer against a harsh and variable climate by binding and nourishing soils, and filtering streams and wetlands. Australia’s ecosystems create significant benefits for important industries like agriculture, forestry, fisheries and aquaculture, and tourism.

Our ecosystems are at risk from climate change. Loss of biodiversity, declines in river and wetland health, reduced water quality and quantity, difficulty in flood control, erosion and reduced productivity are some of the challenges that could increase under a changing climate.

Restoring native vegetation and soil carbon can build and protect biodiversity, increasing the resilience of the landscape to the impacts of a changing climate. For example, tree planting can provide corridors for wildlife, help improve water quality and reduce erosion or salinity.

The ongoing Biodiversity Fund will improve the resilience of Australia’s unique species to the impacts of climate change, enhance the environmental outcomes of carbon farming projects, and help landholders protect biodiversity and carbon values on their land. The Government will provide funding of $946 million over the first six years for landholders to undertake projects that establish, restore, protect or manage biodiverse carbon stores.

The Fund will support restoration and management of biodiverse carbon stores including:

• reforestation and revegetation in areas of high conservation value including wildlife corridors, rivers, streams and wetlands
• management and protection of biodiverse ecosystems, including publicly owned native forests and land under conservation covenants or subject to land clearing restrictions
• action to prevent the spread of invasive species across connected landscapes.

These measures will help ensure the protection of Australia’s ecosystems and increase the land sector’s resilience to the impacts of climate change.

Environmental and biodiversity benefits lead to improved farm productivity

Australia is one of the mega‑diverse nations on Earth. However, its biodiversity is in decline. More than 1,700 species and ecological communities are known to be threatened and at risk of extinction on this continent. For each species listed as threatened, there are many more affected by loss of habitat and other threats. Conservation efforts over the past decades have resulted in improvements in some areas. However, degradation of our environment continues and many ecosystems are increasingly vulnerable to collapse.

Australia’s biodiversity is declining due to the impacts of a range of threats, including:

• habitat loss, degradation and fragmentation
• invasive species
• unsustainable use and management of natural resources
• changes to the aquatic environment and water flows
• changing fire regimes
• climate change.

9.5 Extending the benefits

To support the Carbon Farming Initiative, the Government will introduce measures to make it easier for farmers, Indigenous Australians and other landholders to benefit from managing carbon in the landscape.

The Government has already invested more than $46 million in research and development on ways of reducing pollution and adapting to climate change for the Australian land sectors. The Climate Change Research Program includes an $8 million demonstration component to provide information to farmers.

9.5.1 Carbon Farming Futures

As part of the new ongoing Carbon Farming Futures initiative, the Government will invest a further $201 million (over the first six years of the program) for research into new ways of storing carbon and reducing pollution in the land sectors.

Funding will target emerging technologies and innovative management practices by engaging more scientists and independent experts to improve soil carbon, reduce pollution from livestock and crops, and enhance sustainable agricultural practices. Novel approaches, including biochar, biofuels and new crop and grazing species, will be targeted.

$20 million (over the first six years of the program) will be available to convert research into practical methodologies which are recognised under the Carbon Farming Initiative.

The Government will fund tests of land sector research on ways of reducing pollution. There will also be funding to identify ways of integrating carbon farming into normal farm business.

Grants of up to $99 million (over the first six years of the program) will be provided for landholders to take action on the ground, including testing new ways to increase soil carbon and reduce pollution.

Action to reduce greenhouse gases can improve farm productivity. Increasing soil carbon, for example, can improve soil structure and productivity, water use efficiency, soil biological activity and nutrient cycling. With improved soil fertility, farmers will find it easier to cope with impacts of climate change such as higher temperatures and lower rainfall.

No‑till farming improves soil fertility

• The Government will provide a refundable tax offset to encourage the uptake of conservation tillage farming techniques and participation in soil carbon sequestration research at an estimated cost of $44 million over three years.
• Healthy soils are important for agricultural productivity. No‑tillage aims to reduce soil disturbance, minimise damage to soil structure, increase nutrient availability and reduce water loss by increasing soil water holding capacity.
• Broad‑acre farmers in and around Hillston, in central western New South Wales, have been involved in improving soil fertility since the devastating drought of 2002. Local no‑till trials started around that time, and by 2006 almost 60 per cent of the district’s croppers were using the techniques. There were positive results recorded for sub‑soil moisture and also for crop yields.
• No‑till, like all conservation tillage practices, works to improve the organic matter in the soil by retaining crop stubble. With less than 20 per cent soil disturbance, the effect is improved soil structure and fertility. It also reduces soil temperature, improving conservation of moisture for plant growth. Direct drilling provides excellent protection against wind erosion particularly in dry seasons, and helps improve land degradation. No‑till can help reduce the impacts of droughts and other severe climatic conditions, as the practice can help with water retention in the soil.
• No‑tillage practices require fewer passes over the property, and so farmers save money on fuel.

To ensure that farmers and landholders have information about opportunities under the Carbon Farming Initiative, the Government has provided $4 million to support communication with landholders through the Landcare network and other providers. Landcare has a long history of working in the regions on sustainable land management practices. The Government has committed an additional $64 million (over its first six years) for extension and outreach activities. Farm extension officers will provide information and support to landholders about integrating carbon management into farm planning; new research and farm techniques suitable for the property and farm business; and improving productivity and environmental sustainability.

This builds on a community‑inspired approach which proved successful through the Government’s $34 million FarmReady Program.

9.5.2 Extending the benefits to Indigenous Australians

The Government will provide support to assist Aboriginal and Torres Strait Islanders to participate in the Carbon Farming Initiative. Indigenous Australians manage around 20 per cent of Australia’s land mass, drawing on traditional knowledge of the landscape and its responses to fire, flooding and drought.

The ongoing Indigenous Carbon Farming Fund ($22 million over its first five years) will assist Indigenous communities to benefit from the Carbon Farming Initiative. Funding will also be provided for specialists to work with Indigenous communities on carbon farming projects and funding for research and reporting tools for Carbon Farming Initiative methodologies will create further opportunities for Indigenous Australians.

The Government will continue to engage with Indigenous stakeholders to address barriers to participation.

Savanna burning: Indigenous participation in carbon farming

• The Carbon Farming Initiative will create new economic opportunities for Indigenous communities.
• In Northern Australia there is strong interest in savanna fire management projects that build on the success of the Western Arnhem Land Fire Abatement project.
• Savanna fire projects provide opportunities for Indigenous rangers to work on country, fulfilling their customary land management obligations. Indigenous rangers use traditional fire practices to reduce the spread and intensity of fires in savanna regions, protecting biodiversity and reducing risks of damage to properties.
• In 2006, a 17‑year voluntary offsets agreement was signed between Darwin Liquefied Natural Gas (a subsidiary of energy giant, ConocoPhillips), the Northern Territory Government, and local land owners. The project operates across 28,000 square kilometres of the Arnhem Plateau, adjoining Kakadu and Nitmiluk National Parks.

9.6 Natural resource management for climate change

Regional natural resource management organisations are well placed to help plan for climate change and to maximise the social and environmental benefits of carbon farming projects.

Through Government initiatives such as Caring for our Country, regional natural resource management organisations have had nearly a decade of experience in providing information, training and support to land managers and environmental, Indigenous, and community groups on sustainable land management.

The Government will provide $44 million over five years for natural resource management regions to plan for climate change impacts. Natural resource management organisations will develop plans in each region to guide where carbon farming projects should be located in the landscape. These can be used by landholders to identify and develop activities to reduce carbon pollution.

The Regional Natural Resource Management Planning for Climate Change Fund will also support research and analysis to develop scenarios on regional climate change impacts which can be used for natural resource management and land use planning.

These policies and initiatives for creating opportunities on the land represent a significant investment in reducing carbon pollution and delivering natural resource management benefits in the rural sector. The Land Sector Carbon and Biodiversity Advisory Board will be established in legislation and will review and oversee land sector initiatives, providing advice to Government and ensuring the effectiveness of assistance. With a strong focus on the coordination of research activities, the Board will make sure efforts are not duplicated and benefits for farmers and the environment are realised. The Carbon Farming Initiative and this range of complementary measures will provide real and long‑lasting support for the land sector.

Corridors enhancing biodiversity

• Gondwana Link is one of the most ambitious ecological programs in Australia. A wide range of groups are collaborating to protect, manage and restore bushland in a 1000 kilometre‑long pathway, from the wet forests of Australia’s south west corner to the woodlands and mallee bordering the Nullarbor plain.
• The Fitz‑Stirling project aims to create a natural corridor 75km long and 2km wide to reconnect the Stirling Range and Fitzgerald National Parks. By connecting these parks and the land between them, the Gondwana Link can improve the mobility of a wide range of species.
• For example, the project aims to increase the population of Tammar and Black‑gloved Wallabies—two species that were once abundant across the south west but due to foxes and habitat loss have dramatically reduced in number.
• The project also aims to restore and improve the health of at least 75,000ha of native vegetation, improve the condition of creeks and watercourses and control feral animals and weeds.
• Successful predator control will also assist in the protection of other species, such as western brush‑tailed possums and a number of small to medium sized mammals, birds and reptiles.
• The Carbon Farming Initiative will support environmental programs like the Gondwana Link and others across Australia. This will be an important part of improved biodiversity health into the future.

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