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Low Emission Farming Systems: A whole-farm analysis of the potential impacts of greenhouse policy

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  • Kingwell, Ross S.
  • Metcalf, Tess
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    Abstract

    The Australian government is introducing a Carbon Pollution Reduction Scheme in 2010, as part of its climate change policy. After 2015 agriculture may be covered by this scheme. This paper examines how different broadacre farming systems may be affected by the policy settings of this scheme. Using the bio-economic farming systems model MIDAS (Model of an Integrated Dryland Agricultural System) the impacts of the Carbon Pollution Reduction Scheme on the profitability of different broadacre farming systems in the southwest of Australia are investigated. Results show a range of profit and enterprise impacts across the various farm types. In a scenario where agriculture is not covered by the scheme, reductions in profit range from 7 to 12 percent, attributable to more expensive ‘covered’ inputs such as fuel and fertiliser; and farmers reduce their use of expensive energy inputs such as chemicals and fertilisers. In a covered scenario profits decline by 15 to 25 percent of ‘business-as-usual’ profit and optimal farm plans involve a combination of reduced livestock numbers, the introduction of permanent woody perennial plantations on marginal lands and other changes to the farm enterprise mix to reduce emissions.

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    File URL: http://purl.umn.edu/48162
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    Bibliographic Info

    Paper provided by Australian Agricultural and Resource Economics Society in its series 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia with number 48162.

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    Date of creation: 2009
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    Handle: RePEc:ags:aare09:48162

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    Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200
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    Keywords: agriculture; greenhouse gases; economic modelling; abatement;

    This paper has been announced in the following NEP Reports:

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    1. Kingwell, R., 2002. "Sheep animal welfare in a low rainfall Mediterranean environment: a profitable investment?," Agricultural Systems, Elsevier, vol. 74(2), pages 221-240, November.
    2. Kingwell, R. S. & Ghadim, A. K. Abadi & Robinson, S. D. & Young, J. M., 1995. "Introducing Awassi sheep to Australia: an application of farming system models," Agricultural Systems, Elsevier, vol. 47(4), pages 451-471.
    3. Gibson, Lauren & Kingwell, Ross & Doole, Graeme, 2008. "The role and value of eastern star clover in managing herbicide-resistant crop weeds: A whole-farm analysis," Agricultural Systems, Elsevier, vol. 98(3), pages 199-207, October.
    4. Flugge, Felicity & Schilizzi, Steven, 2005. "Greenhouse gas abatement policies and the value of carbon sinks: Do grazing and cropping systems have different destinies?," Ecological Economics, Elsevier, vol. 55(4), pages 584-598, December.
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