SOME of the nation’s most senior agricultural economists warn of severe economic consequences for the farm sector if Australia introduces a carbon emissions trading scheme (ETS) ahead of our trade competitors like the US and Brazil.
The concerns echo those from farm leaders who fear Australian farmers will be disadvantaged by a scheme which will effectively impose an export tax on farm businesses with higher electricity, fuel and fertiliser costs – which won’t affect farmers in other countries because they aren’t covered by similar schemes.
The Australian Food and Grocery Council has also weighed into the debate, this week urging the Federal Government to implement a scheme which would ensure the competitiveness of Australia’s food and grocery manufacturing sector.
It said any ETS which did not include international emitters represented a threat to the $70 billion packaged food and grocery industry.
At a forum in Canberra last week, both the current and former head of the Australian Bureau of Resource Economics (ABARE) expressed concern for the potential cost to Australian agriculture and exporters under an emissions trading scheme.
Former ABARE chief, Dr Brian Fisher, said there was “absolutely nothing to be gained by going first here”.
“We are a very, very small country. We constitute about 1.3 odd per cent of emissions on the planet.”
Introducing a scheme ahead of other nations was not prosecuting Australia’s national interest, it was prosecuting somebody else’s and “we are going to be damned if we do”.
Dr Fisher, who now heads up a private economic consultancy company, said the government should focus its domestic climate change policy on adaptation because it will be “years” before there is an international agreement on emissions trading between the 190 countries involved in the ongoing negotiations.
Current ABARE chief, Phillip Glyde, said whether or not agriculture was shielded or not from being part of a scheme, the impacts on the sector through the use of emission intensive inputs would be significant.
He said in the cropping sector, 39 per cent of the input costs to cropping came from emission-intensive inputs, while in livestock those costs were about 17 per cent.
“There’s only one solution to all of this, particularly while the rest of the world doesn’t introduce an ETS or have emissions trading schemes excluding agriculture – it is to continue down the path of productivity improvements,” Mr Glyde said.
National Farmers Federation chief executive, Ben Fargher, stressed the importance of an emissions trading policy that did not disproportionately impact on a food producing sector like Australian agriculture.
“We need to make sure the medicine doesn’t end up being worse than the disease itself,” Mr Fargher said.
“As reinforced by Professor Garnaut, any domestic policy response must be formulated in the context of a global solution.
“It would be a perverse outcome if our emissions-efficient agricultural sector was put at a competitive disadvantage with overseas countries whose emissions profiles might well be higher than ours.”
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