CARBON TAXRural industries will be affected by the Federal Governmentcarbon price, with impacts on input costs. Ian Clarkson FAPI,lecturer in property at Central Queensland UniversityFaculty of Arts, Business, Informatics and Education, examineswhat the carbon tax could mean for farm forestry.511
CARBON TAXDuring the interimbefore the EmissionsTrading Scheme (ETS) isintroduced, farms havean opportunity to eitherearn money through selling carboncredits or at least reduce the impactan ETS will have on their ongoingfarming costs when it is introduced ifthe framework for separating carbonrights to allow sale is completed.John Sheehan (2009) noted that theKevin Rudd-proposed carbon pollutionreduction scheme (CPRS) did notclearly differentiate between propertyrights and carbon rights and how thesemay be exchanged.A number of states have adoptedprofit-à-prendre as a basis for theright to carbon. This enables a personto take part of the soil or produce ofland that someone else owns. It is aright to take from the land, as in themining of minerals, but in this casemeans carbon credits. However, thisaction offends the common law notionof land property and is fundamentallyflawed (Sheehan, 2009). This raises thepoint as to how carbon rights may betransferred or paid for in the contextof separating the carbon right from theland right.Whilst energy, through powergeneration and the transport of goods,is the biggest producer of greenhousegases in Australia, the second highestproducer of greenhouse gases isrural industries. Garnaut cites thatagricultural emissions are more than sixtimes the Organisation for EconomicCooperation and Development (OECD)average, being the third highest.In Australia, agriculture directlycontributes around 15% of the country’sgreenhouse gas emissions (Meer, 2009).This is balanced slightly as Australiahas the most wooded area of any OECDcountry with about 28.8 hectares perperson (Garnaut, 2011). However,agricultural greenhouse gas emissionsfell by 0.6% in the 2011 financial yearfrom the previous year’s output.BREAKDOWN OF AGRICULTURAL EMISSIONS65%1%13%4%17%FIGURE 1 AUSTRALIA AGRICULTURE EMISSIONS (MEER, 2009)To reduce greenhouse gasemissions in Australia further, Garnautrecommends an almost 30% reductionof the <strong>Australian</strong> cattle herd down to 18million, with a 40% reduction in sheepto 45 million head based on the redmeat consumption of Australia and thereplacement of high methane producerswith ‘greener’ chicken and kangaroo.However, sheep are not just used formeat consumption, with the majority(around 67%) used for wool production.This natural product would need to bereplaced by alternative fibres if flockreduction occurred, and there appearsminimal accounting for this in the report.Another argument has beenadvanced that the use of wool willdiminish as more synthetic fibres areproduced, but synthesised polymers aregenerally produced from petroleumbasedchemicals and account for aroundhalf of the world’s current fibre use.Textile production is the fifth largestcontributor to carbon dioxide emissionsin the United States (EIA, 1998). <strong>The</strong>Stockholm Environment <strong>Institute</strong>also shows that due to the high energyrequirement of extracting oil fromunderground, there is around 9.52 kgs ofcarbon emissions per tonne of spun fibreAgriculture’s GHG emissions by source65% Enteric Fermentation4%Manure Management0%Rice Cultivation17% Agricultural Soils13% Prescribed Burning of Savannas1% Field Burning of Agricultural residuesTotal Agricultural emissions = 88 million tonnes 2007in creating polyester in the US, comparedto 5.89 kgs of carbon dioxide to produce1 tonne of cotton in the US (SEI, 2005).CARBON CREDITS IN THERURAL INDUSTRY<strong>The</strong>re has been no possiblecommencement date announced fora trading scheme at the time of thepreparation of this paper by the Gillardgovernment, just the introduction ofthe carbon price from 1 July, <strong>2012</strong>.Peter O’Brien, Managing Director ofRural Industries Research DevelopmentCorporation, said: “Agriculture willbe affected by the CPRS both directlyand indirectly. Emissions costs in theform of abatement and/or to purchasepermits will potentially account for asignificant share of production costsfor livestock sectors and it is difficultfor <strong>Australian</strong> farmers to pass thecosts to their customers because mostof their products are exported. Even ifagriculture is not included in a CPRS,it will still be impacted by higher inputprices and lower demand.”<strong>The</strong> three options presented for areduction of agricultural greenhousegases are changing the <strong>Australian</strong> meat512 <strong>ANZPJ</strong> SEPTEMBER <strong>2012</strong>
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