Agriculture’s carbon neutral challenge: The case of Western Australia*

Abstract

Agriculture is being encouraged to become carbon neutral, and agricultural land is being touted as a source of carbon sequestration. Yet making agricultural regions locally carbon neutral will involve an economic cost, with existing patterns of greenhouse gas emissions and spatial costs of abatement affecting that cost of achieving regional carbon neutrality. This study examines the economic cost of locally achieving carbon neutrality, using the illustration of Western Australia's agricultural region. The cost to the region of achieving carbon neutrality via reforestation is estimated, as is the spatial allocation of farmland for sequestration. Social and political pressures that likely constrain how much farmland can be reforested are explicitly considered. Findings are subject to a sensitivity analysis and several caveats. The annual cost of regional carbon neutrality via proscribed regional reforestation, under current carbon offset prices, is estimated to range from AUD216 million to AUD250 million (i.e. under 3 per cent of the region's gross value of agricultural production) which might suggest the challenge to be carbon neutral is within commercial reach. However, without other financial incentives, it likely involves farm business profits being reduced by around 15 per cent.

Making Agriculture Carbon Neutral Amid a Changing Climate: The Case of South-Western Australia

“…The region's spatial pattern of emissions highlights those parts of the region that are the main sources of emissions and therefore identifies those businesses or industries liable to face the greatest challenges to achieving carbon neutrality. Spatial variability characterises the region's agricultural emissions [29]. The highest emitting shires are predominately wherever large numbers of livestock reside, and wherever higher crop input farming systems operate; and where the shire area is unusually large (Figure 2).…”

“…Sheep, being a ruminant, produce methane that is a particularly damaging greenhouse gas regarding its global warming potential. Hence, reductions in the sheep flock have importantly contributed to emissions reductions in south-western Australia [29].…”

“…Kingwell [29] presents evidence that emissions in the region have lessened since the mid-1990s, principally due to a decline in the sheep population. He also shows that whenever a poor production year occurs, emissions are reduced.…”

“…Kingwell [29] mentions that in the study region reforestation of farmland is often associated with social conflict. Williams [74] surveyed community attitudes to wood plantations in the study region and found respondents valued agricultural land use higher than plantation forestry.…”

“…Accordingly, to fill this gap in the literature, this study examines how climate change will affect the affordability of achieving carbon neutrality in south-western Australia; an important agricultural region in Australia in which the most frequently applied method of sequestering carbon is reforestation. To set the scene for this study, the next subsection describes the study region and draws on Kingwell [29] to give an overview of the region's agricultural emissions, the categories of emissions, and the current trajectory of emissions. An online appendix provides technical information on Australian agriculture as a source of emissions, and reforestation as a source of emissions abatement.…”