Does the Carbon Farming Initiative = More $ For Dairy Farmers?
Have you heard of the Federal Government's recently announced Carbon Farming Initiative (CFI)? This proposal is designed to allow farmers and landholders a new source of revenue through trading of carbon offsets. Farmers will be able to obtain credits and offset their greenhouse gas emissions through changes to land management practices.
Late in 2009 the Federal Government announced it would exclude agricultural emissions from any future emissions trading scheme. However, there is an expectation that agriculture will contribute to reducing Australia's greenhouse gas emissions given it has the second highest emissions profile (Figure 1).
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Figure 1: Australia's net greenhouse gas emissions by sector in 2009. |
Agriculture is currently responsible for approximately 15 per cent of Australia's total greenhouse gas (GHG) emissions, these being primarily methane from ruminant livestock and nitrous oxide from soils and fertilisers. In fact, agriculture is responsible for over half of all methane and almost three quarters of nitrous oxide emissions in Australia.
While agriculture is not currently liable under the proposed carbon tax, the CFI would allow farmers to voluntarily enter into a scheme that provides them with the opportunity to trade carbon credits earned by actions they take to reduce their emissions. These credits will be traded on domestic or international markets to other emitters who are unable to, or find it too costly to reduce their emissions; somewhat like trading shares on the stock exchange.
The main ways dairy farmers could earn credits is by reforestation, revegetation or protecting existing native vegetation, reducing methane emissions from animals and livestock, and improved soil and fertiliser management. Work is also underway to potentially include soil carbon in the scheme.
Some of these reduction measures may be known as Kyoto compliant, meaning they are internationally recognised. Credits earned this way may be internationally traded and worth more than other non-Kyoto compliant credits. For both Kyoto and non-Kyoto credits there will be an approved set of methodologies or rules for approving, accrediting and monitoring them, however those associated with Kyoto compliant credits are likely to be more stringent. This will help purchasers of the credits to ensure they are a sound investment, resulting in real reductions of greenhouse gases.
Some key aspects of these reduction measures are:
Additionally - the action must be additional to what farmers would have done;
Permanence - if carbon stored in soil or trees are claimed as an offset, it needs to remain there for at least 100 years;
Leakage - the action should not generate increased emissions somewhere else that equal those reduced on farm, e.g. you cannot just move replacement heifers to the farm next door.
As indicated, there will be a high degree of accountability for participants in the initiative, as well as auditing and reporting. Soil carbon is often touted as an easy option in agriculture, but as many dairy farms currently have relatively high levels of soil carbon, this avenue may provide only marginal opportunities for credits. In addition soil carbon levels can be difficult to increase but easily lost in circumstances such as drought.
Opportunities for Dairy businesses
Tree plantings can provide permanent carbon storage along with many other benefits such as shade, shelter and increasing biodiversity on a dairy farm. The minimum area presently required to participate in the proposed CFI would not be viable for many dairy farms at relatively low carbon prices, unless implemented on an unproductive or hard to work area of the farm.
Reductions in enteric methane from the cows' rumen through the use of feed additives and diet manipulation also provide opportunities for dairy farmers. The use of dietary oils, fats and tannins can reduce enteric methane by up to about 25 to 30 per cent. Providing higher quality forage (grasses, legumes) and balancing the protein, energy and fibre ratios of the diet can also provide significant reductions in both enteric methane and nitrogen losses via manure and urine.
Nitrous oxide losses from soil can be substantially reduced simply by careful fertiliser management in regard to the timing and amount of nitrogen applied. Slow release and/or controlled release fertilisers can also reduce losses. This also makes smart business sense.
Many of the easily and readily available actions to reduce GHG's can be achieved at comparatively low cost whilst also providing a productivity gain. Careful consideration should be given to longer term strategies such as soil carbon due to the level of commitment required, which is generally over several generations.
Any action to participate in trading carbon will need to be well thought out
For further information on the Carbon Farming Initiative or Green House Gas emissions on dairy farms, please contact Lyndal Metcalf at DPI Echuca Centre, telephone (03) 5482 1922, or email lyndal.metcalf@dpi.vic.gov.au
