James Ha, Grattan InstitutePolitical momentum is growing in Australia to cut greenhouse gas emissions to net-zero by 2050. On Friday, Treasurer Josh Frydenberg was the latest member of the federal government to throw his weight behind the goal, and over the weekend, Prime Minister Scott Morrison acknowledged “the world is transitioning to a new energy economy”.
But for Australia to achieve net-zero across the economy, emissions from agriculture must fall dramatically. Agriculture contributed about 15% to Australia’s greenhouse gas emissions in 2019 – most of it from cattle and sheep. If herd numbers recover from the recent drought, the sector’s emissions are projected to rise.
Cutting agriculture emissions will not be easy. The difficulties have reportedly triggered concern in the Nationals’ about the cost of the transition for farmers, including calls for agriculture to be carved out of any net-zero target.
But as our new Grattan Institute report today makes clear, agriculture must not be granted this exemption. Instead, the federal government should do more to encourage farmers to adopt low-emissions technologies and practices – some of which can be deployed now.
Many farmers want to be part of the climate solution – and must be – for three main reasons.
First, the agriculture sector is uniquely vulnerable to a changing climate. Already, changes in rainfall have cut profits across the sector by 23% compared to what could have been achieved in pre-2000 conditions. The effect is even worse for cropping farmers.
Livestock farmers face risks, too. If global warming reaches 3℃, livestock in northern Australia are expected to suffer heat stress almost daily.
Second, parts of the sector are highly exposed to international markets – for example, about three-quarters of Australia’s red meat is exported.
There are fears Australian producers may face a border tax in some markets if they don’t cut emissions.
The European Union, for instance, plans to introduce tariffs as early as 2023 on some products from countries without effective carbon pricing, though agriculture will not be included initially.
Third, the industry recognises action on climate change can often boost farm productivity, or help farmers secure resilient revenue streams. For example, trees provide shade for animals, while good soil management can preserve the land’s fertility. Both activities can store carbon and may generate carbon credits.
Carbon credits can be used to offset farm emissions, or sold to other emitters. In a net-zero future, farmers can maximise their carbon credit revenue by minimising their own emissions, leaving them more carbon credits to sell.
The agriculture sector itself is increasingly embracing the net-zero goal. The National Farmers Federation supports an economy-wide aspiration to be net-zero by 2050, with some conditions. The red meat and pork industries have gone further, committing to be carbon neutral by 2030 and 2025 respectively.
The sector’s non-animal emissions largely came from burning diesel, the use of fertiliser, and the breakdown of leftover plant material from cropping.
Unlike in, say, the electricity sector, it’s not possible to completely eliminate agricultural emissions, and deep emissions cuts look difficult in the near term. That’s because methane produced in the stomachs of cattle and sheep represents more than 60% of agricultural emissions; these cannot be captured, or eliminated through renewable energy technology.
Supplements added to stock feed – which reduce the amount of methane the animal produces – are the most promising options to reduce agricultural emissions. These supplements include red algae and the chemical 3-nitrooxypropanol, both of which may cut methane by up to 90% if used consistently at the right dose.
But it’s difficult to distribute these feed supplements to Australian grazing cattle and sheep every day. At any given time, only about 4% of Australia’s cattle are in feedlots where their diet can be easily controlled.
Diesel use can be reduced by electrifying farm machinery, but electric models are not yet widely available or affordable for all purposes.
These challenges slow the realistic rate at which the sector can cut emissions. Yet there are things that can be done today.
Many manure emissions can be avoided through smarter management. For example, on intensive livestock farms, manure is often stored in ponds where it releases methane. This methane can be captured and burnt, emitting the weaker greenhouse gas, carbon dioxide, instead.
And better targeted fertiliser use is a clear win-win – it would save farmers money and reduce emissions of nitrous oxide, a potent greenhouse gas.
Governments must walk and chew gum
An economy-wide carbon price would be the best way for Australia to reduce emissions in an economically efficient manner. But the political reality is that carbon pricing is out of reach, at least for now. So Australia should pursue sector-specific policies – including in agriculture.
Governments must walk and chew gum. That means introducing policies to support emissions-reducing actions that farmers can take today, while investing alongside the industry in potential high-impact solutions for the longer term.
Accelerating near-term action will require improving the federal government’s Emissions Reduction Fund, to help more farmers generate Australian carbon credit units. It will also require more investment in outreach programs to give farmers the knowledge they need to reduce emissions.
Improving the long-term emissions outlook for the agriculture sector requires investment in high-impact research, development and deployment. Bringing down the cost of new technologies is possible with deployment at scale: all governments should consider what combination of subsidies, penalties and regulations will best drive this.
Agriculture must not become the missing piece in Australia’s net-zero puzzle. Without action today, the sector may become Australia’s largest source of emissions in coming decades. This would require hugely expensive carbon offsetting – paid for by taxpayers, consumers and farmers themselves.
Matt McDonald, The University of QueenslandPrime Minister Scott Morrison is reportedly developing a plan for Australia to adopt a target of net-zero emissions by 2050. Climate change was a central focus of the Quad talks in Washington which Morrison attended in recent days, and he is under significant international pressure to adopt a net-zero target ahead of climate talks in Glasgow in November.
Morrison is very late to the party on issue of net-zero – and lagging far behind public opinion. A recent Lowy poll showed 78% of Australians support the target.
But standing firmly in Morrison’s way is the Coalition’s junior partner, the Nationals. The words of key Nationals figures including Resources Minister Keith Pitt and pro-coal senator Matt Canavan suggest net-zero is the hill they will die on. And Nationals leader Barnaby Joyce, not exactly a climate warrior, has indicated he’s yet to be convinced on the merits of the target.
Ultimately though, this is just bad strategy from the Nationals. It burns valuable political capital for no good reason, and abrogates responsibility to their own constituents.
Not much of a target at all
First, a net-zero emissions target is a really obvious position of compromise for the Nationals specifically, and for a reluctant Australian government more generally.
Getting to net-zero by 2050 also doesn’t necessarily require immediate or significant emissions cuts. As critics including Greta Thunberg and former IPCC chair Bob Watson have argued, the targets can create the impression of action without requiring immediate change.
Research shows many jurisdictions with a net-zero target do not have robust measures in place to ensure they’re met, such as interim targets and a reporting mechanism.
And the timeframe for net-zero – whether 2050 like most nations, or 2060 as per China – is way beyond the political longevity of our current government MPs. That means those now in parliament will be spared much of the political pain of implementing policies required to meet the target.
Finally, pursuing net-zero emissions (rather than just zero-emissions in sectors where that is feasible) allows fossil fuel companies to offset their climate damage, by buying carbon credits, rather than stopping their polluting activity. It also potentially allows for fairly speculative efforts to remove greenhouse gases from the atmosphere via geoengineering.
For these reasons and more, the net-zero goal is in often criticised as a dangerous trap for doing very little on climate change – which appears to be the goal of many in the Nationals.
In opposing the net-zero target, the Nationals often point to potential damage to the nation’s mining and farming sectors, primarily a loss of jobs and economic growth. Some Nationals have called for those sectors to be carved out of any net-zero target.
On the question of agriculture, research released by the Grattan Institute this week shows it’s getting increasingly hard to argue the sector should be exempt from the target – its emissions are simply too great.
And there is much that can be done right now to cut agriculture emissions, if the government does more to encourage farmers to adopt the right technologies and practices.
On mining, the Nationals are fighting a losing battle. Soon, the world will no longer want our coal. As others have noted, we must prepare for the change and diversify the economy, rather than lamenting what’s still left in the ground. And Australia can easily replace coal-fired electricity generation with renewable energy, backed by storage.
By refusing to compromise on a net-zero target, the Nationals are burning all sorts of political capital they could potentially wield with the Liberals on a range of issues. The Nationals would have held particular sway over Liberals concerned about holding on to their inner city seats in a 2022 election.
More importantly, the position of Keith Pitt, Matt Canavan and other intransigents in the Nationals isn’t just an abandonment of future generations. Nor is it only a rejection of our responsibilities to vulnerable people in all parts of Australia and the world, or our duty of care to other living beings.
It’s also a spectacular betrayal of their own constituencies. Rural Australia will be disproportionately affected by climate change, particularly in the form of higher temperatures, changing rainfall patterns and increasing disasters like drought and bushfires. And the long-term economic costs of inaction for rural constituencies will be potentially catastrophic.
It’s for these reasons that organisations like the National Farmers Federation have specifically called for a commitment to net zero emissions.
In the 2019 election, the Nationals received just 4.5% of the vote in the lower house, with the Liberal Nationals of Queensland achieving just 8.7% (as a proportion of the national total). In both cases, it was less still in the Senate.
Yet despite speaking on behalf of a small fraction of the country, the party is holding Australian climate policy to ransom.
Maybe we can’t get the intransigents in the National Party to suddenly recognise their obligations to the planet and its inhabitants. But surely they can be convinced to represent the interests of rural voters? Time – what little we have left – will tell.
Michelle Grattan, University of CanberraA tough debate is expected when a highly volatile Nationals parliamentary party meets on Monday, ahead of climate change negotiations between Prime Minister Scott Morrison and Nationals leader Barnaby Joyce to endorse a target of net zero emissions by 2050.
Joyce is under dual pressure, with his party room sharply divided over the 2050 target, and former minister Darren Chester announcing, in a weekend statement which criticised Joyce without naming him, that he is taking “some time away” from the party room.
No details of the climate plan are yet on the table, but strong positioning is underway, with negotiations between Morrison and Joyce resuming once the PM, returning on Sunday night from his American trip, is back in the country.
The Nationals meet every fortnight, remotely when parliament is not sitting.
Joyce indicated on Friday he would accept the government adopting a firm target of net zero emissions by 2050 provided the regions were not worse off. He also wants some largesse for the Nationals.
At the same time he is expressing concerns and gives the impression of being dragged reluctantly towards an agreement.
Morrison was pressed again while in the US about increasing Australia’s ambition on climate policy and has signalled he proposes to do so. But he has to get the minor Coalition partner on side.
Both President Joe Biden and British Prime Minister Boris Johnson have pushed Australia hard as the November Glasgow climate conference draws near.
The government’s current position is net zero “preferably” by 2050.
Interviewed by the ABC on Sunday, Joyce provided little fresh clarity. But asked whether there should be no coal jobs lost, he said, “well, not by reason of domestic policy”.
Deputy Nationals leader and agriculture minister David Littleproud, who supports the 2050 firm target with safeguards and incentives for the regions, told Sky that members of the Nationals party room were “pragmatic”. They were “looking through the lens of protecting regional Australia but making sure there’s opportunity for regional Australia to also participate in this”.
But former resources minister Matt Canavan tweeted, “I am deadset against net zero emissions. Just look at the disaster the UK is living through. They’re switching off their industry to keep their lights on, and they are struggling to feed themselves. Net zero emissions would just make us weaker.”
Resources minister Keith Pitt said: “We are yet to see the strategy, the plan, the cost, and who’s paying.
“My priority will be the 1.2 million direct and indirect jobs associated with the resources sector”.
Chester, who is a supporter of net zero, won’t be in the meeting to help advance the case. He said he had “decided to take a break from organised meetings, events and activities in The Nationals Federal Parliamentary party room.
“I will reassess my position when Federal Parliament resumes in October.
“To be clear, I continue to support the Coalition government but want some time away from the The Nationals Federal Parliamentary party room to reflect on a number of significant issues.
“My decision follows months of frustration with the repeated failure of the leadership to even attempt to moderate some of the more disrespectful and offensive views expressed by a minority of colleagues.”
Chester, who was dropped from the frontbench when Joyce became leader, has been highly critical of Queensland National George Christensen, whose string of provocative comments have included, most recently, accusing Victorian police of using excessive force against demonstrators, and suggesting they should be arrested.
Joyce on Sunday again indicated he could not silence Christensen, who is retiring at the election, and said that anyway, there was a right of free speech.
Asked on SBS whether he thought he had the support of the majority of the Nationals to go forward on climate policy, Morrison said: “It’s not about my view. It’s about what I think Australians are clearly looking for”.
“My job is to bring my government together to focus on the plan that can achieve it.
“A plan [that] says to Australians, whether they’re up in the Hunter, or down in Bell Bay, or up in Gladstone or up in the Pilbara […] this is how we achieve net zero emissions in the future.
“Our view is that we can achieve that by keeping the costs low, keeping people in industries, ensuring we’re using transition fuels that take us from one place to the next, and we take people on the journey,” Morrison said.
The communique from the QUAD summit which Morrison attended at the end of his trip said: “We have joined forces to tackle the climate crisis, which must be addressed with the urgency it demands.
“Quad countries will work together to keep the Paris-aligned temperature limits within reach and will pursue efforts to limit it to 1.5°C above pre-industrial levels.
“To this end, Quad countries intend to update or communicate ambitious NDCs [nationally determined contributions] by COP26 and welcome those who have already done so.”
The QUAD includes the US, Australia, Japan and India.
Richard Holden, UNSWWorld leaders and about 30,000 others from assorted interest groups will converge on Glasgow in November for the United Nations’ 26th annual climate summit, COP26 (“Conference of the Parties”).
It will be five years (allowing for a one-year Tokyo 2020-style pandemic hiatus) since the Paris Agreement adopted at COP21 in 2015.
There has been plenty of cynicism about that agreement, its structure and non-binding nature. Important emitters like China were effectively exempt from making meaningful carbon-reduction commitments.
Some OECD countries (such as Canada) have paid lip service to the agreement but done little. Still others (such as Australia) have made some progress reducing emissions but have no long-term plan, relying instead on bumper-sticker slogans about “technology not taxes” and, until recently, hiding behind dodgy accounting tricks.
That aside, it’s hard to see how the world solves what amounts to — as economists put it — a “coordination problem” without global agreements.
For roughly half a century economists have been unanimous about what those agreements must involve — a price on carbon. The 2018 economics Nobel prize awarded to William Nordhaus was belated recognition of this fact.
A price on carbon — in the form of a carbon tax or emissions trading scheme — is a way to use the power of the market’s price mechanism to balance the good that comes from emitting carbon (economic development) with the bad (climate change).
Set the price of carbon at the true social cost of carbon (taking into account all the ills that come from climate change) and the invisible hand of the market will balance the pros and cons. Think of it as Friedrich von Hayek meets Greta Thunberg.
But there is another, less dramatic way to harness market forces to reduce carbon emissions: disclosure.
The idea starts with this: plenty of consumers want to reduce their carbon footprint and are willing to pay for it. That’s why people recycle, use green energy even when it’s more expensive, buy low-carbon clothing, and drive electric cars. A bunch of folks are willing to pay to be green.
The success of companies such as eco-friendly sneaker company Allbirds and electic vehicle maker Tesla exist is evidence of the market catering to these consumer preferences. But can we make it easier for consumers to express their environmental preferences? Can we turbocharge the market for greener products?
Authored by Carnegie Mellon University economists Lavender Yang, Nicholas Muller and Pierre Jinghong Liang, the paper looks at the US Environmental Protectino Agency’s Greenhouse Gas Reporting Program. In effect from 2010, this has required big carbon emitters (including all power plants that produce more than 25,000 tonnes of carbon dioxide a year) to publicly disclose how much they emit.
The authors look at the effect of this disclosure program on the electric power industry, which accounts for 27% of all US emissions.
The results are striking. Plants subject to greater scrutiny reduced their carbon emissions by 7%. Plants owned by publicly listed companies reduced their emissions by 10%. Large public companies, such as those in the S&P500 stock index, cut emissions even more (11%).
The reason appears to be responsiveness to investors wanting companies to be more environmentally responsible. This explains why emissions went down more for public companies, and even more for large public companies, whose shares are more likely to be held by funds with an ESG (Environment, Social and Governance) mandate.
Some of these investors have pro-social preferences and want to invest their money in more sustainable companies. Others might not care about the environment per se, but know that lots of folks do. Businesses that cater to these consumer preferences have an advantage.
The dark side to this is that the decline in emissions by major plants was partially offset by an increase in emissions by plants under the 25,000-tonne threshold not subject to disclosure.
In other words, companies responded to the incentives provided by disclosure requirements. Those who could “hide” their emissions did not.
The lesson is that disclosure requirements work. They force companies to own up to their customers and investors, and face the reality of their emissions behaviour. But we need to apply it to all companies, not just big ones.
Michelle Grattan, University of CanberraThe Coalition brigade is assembling, readying for the final march to a place it once regarded as enemy territory and poisoned ground, too dangerous to approach.
Josh Frydenberg waved the flag on Friday. Nationals leader Barnaby Joyce, a conscripted officer, is reluctantly falling (sort of) into step. Angus Taylor will be purchasing the requisite boots.
Scott Morrison, the general, will announce the arrival. But not until the details of a deal, heavy with technology and trade offs and pay offs, are landed with Joyce.
The Prime Minister wants – “needs” would be a better word – Australia to support a 2050 net zero emissions target at the November Glasgow climate conference.
No if or buts or qualifications. No having to say net zero “preferably” by 2050, as the government has been doing.
Morrison and Joyce have been talking at length about this imperative, because without the Nationals the journey – which seems so short to outsiders but so very arduous for the Coalition – cannot be completed.
Frydenberg on Friday delivered the blunt message that if Australia doesn’t step up to world expectations on climate policy, it will have trouble getting the capital it needs from overseas, in sufficient quantity and at the cheapest cost.
The Treasurer’s speech was focused on finance, rather than the environment as such. He pitched his push for the firm target so as to appeal in hard-headed economic terms. It’s the markets (not the greenies) that are requiring us to do this, was the message.
Frydenberg is battle-hardened for the task. As energy minister, he was then prime minister Malcolm Turnbull’s lieutenant when they carried the standard for a National Energy Guarantee, the NEG.
That succumbed to an ambush from a group of rebel troops, leaving Turnbull mortally wounded. Morrison has better armour; anyway, the Liberal sceptics aren’t heard from nowadays. The noise comes from Nationals.
On Friday morning Joyce did his bit on ABC radio. His doubts were evident, as he pointed to power price rises and collapsing energy companies in Britain.
But he came through with the vital central line. Asked, “do you support net zero by 2050?” he replied, “I’ve got no problems with any plan that does not leave regional areas hurt”.
Later in the day he said: “Now, when people say do you support it and they don’t tell you how they’re going to do it, they’re opening themselves […] to a crisis like they’re experiencing in Europe, like they’re experiencing in the UK”.
Joyce will have problems with some of his followers, especially his one-time staffer, now senator, Matt Canavan, who can remind his leader how he not so long ago trashed the target.
But he’ll get plenty of loot for the Nationals in the final package. Even Frydenberg seems to have stopped worrying about the appallingly high cost of political living these days.
In Washington, Morrison was asked whether the government had made a decision on net zero.
“No, if Australia had made such a decision, I would have announced it,” he said. “Australia has not made any final decision on that matter … we’ll be considering further when I return to Australia the plan that we believe can help us achieve our ambition in this area”.
While the army’s destination seems clear, there’s still work to be done, and the Nationals say the actual map is yet to be laid out on the table.
But if anything were to derail the expedition now, it would be a shock to everyone – including Morrison, and no doubt to Joe Biden and Boris Johnson.
Morrison would be left in an intolerable position for Glasgow. Frydenberg made a point of noting 129 countries have committed to the 2050 target.
The PM would also be hobbled at the election, with climate an issue especially in the leafy city areas and independent candidates gearing up to run in various seats.
Embracing the 2050 target is a minimal requirement for a nation’s Glasgow policy, but the United States, Britain and other climate frontrunners are focused on countries being more ambitious in the medium term.
What Morrison and Joyce do about that will soon become the big question.
But there’s another important role we have little understanding of on a global scale: the carbon deadwood releases as it decomposes, with part of it going into the soil and part into the atmosphere. Insects, such as termites and wood borers, can accelerate this process.
But this amount can change depending on insect activity, and will likely increase under climate change. It’s vital deadwood is considered explicitly in all future climate change projections.
An extraordinary, global effort
Forests are crucial carbon sinks, where living trees capture and store carbon dioxide from the atmosphere, helping to regulate climate.
Deadwood — including fallen or still-standing trees, branches and stumps — makes up 8% of this carbon stock in the world’s forests.
Our aim was to measure the influence of climate and insects on the rate of decomposition — but it wasn’t easy. Our research paper is the result of an extraordinary effort to co-ordinate a large-scale cross-continent field experiment. More than 30 research groups worldwide took part.
Wood from more than 140 tree species was laid out for up to three years at 55 forest sites on six continents, from the Amazon rainforest to Brisbane, Australia.
Half of these wood samples were in closed mesh cages to exclude insects from the decomposition process to test their effect, too.
Some sites had to be protected from elephants, another was lost to fire and another had to be rebuilt after a flood.
What we found
Our research showed the rate of deadwood decay and how insects contribute to it depend very strongly on climate.
We found the rate increased primarily with rising temperature, and was disproportionately greater in the tropics compared to all other cooler climatic regions.
In fact, deadwood in tropical regions lost a median mass of 28.2% every year. In cooler, temperate regions, the median mass lost was just 6.3%.
More deadwood decay occurs in the tropics because the region has greater biodiversity (more insects and fungi) to facilitate decomposition. As insects consume the wood, they render it to small particles, which speed up decay. The insects also introduce fungal species, which then finish the job.
Of the 10.9 billion tonnes of carbon dioxide released by deadwood each year, we estimate insect activity is responsible for 3.2 billion tonnes, or 29%.
Let’s break this down by region. In the tropics, insects were responsible for almost one-third of the carbon released from deadwood. In regions with low temperatures in forests of northern and temperate latitudes — such as in Canada and Finland — insects had little effect.
But given the vast majority of deadwood decay occurs in the tropics (93%), and that this region in general is set to become even warmer and wetter under climate change, it’s safe to say climate change will increase the amount of carbon deadwood releases each year.
It’s also worth bearing in mind that the amount of carbon dioxide released is still only a fraction of the total annual global deadwood carbon stock. That is, 85% of the global deadwood carbon stock remains on forest floors and continues to store carbon each year.
For example, if we used deadwood as a biofuel it could release the carbon that would otherwise have remained locked up each year. If the world’s deadwood was removed and burned, it would be release eight times more carbon than what’s currently emitted from burning fossil fuels.
This is particularly important in cooler climatic regions, where decomposition is slower and deadwood remains for several years as a vital carbon sink.
The complex interplay of interactions between insects and climate on deadwood carbon release makes future climate projections a bit tricky.
To improve climate change predictions, we need much more detailed research on how communities of decomposer insects (such as the numbers of individuals and species) influence deadwood decomposition, not to mention potential effects from insect diversity loss.
But insect diversity loss is also likely to vary regionally and would require long-term studies over decades to determine.
For now, climate scientists must take the enormous annual emissions from deadwood into account in their research, so humanity can have a better understanding of climate change’s cascading effects.
Tim Nelson, Griffith University and Joel Gilmore, Griffith UniversityA long-anticipated plan to reform Australia’s electricity system was released on Thursday. One of the most controversial proposals by the Energy Security Board (ESB) concerns subsidies which critics say will encourage dirty coal plants to stay open longer.
The subsidies, under a so-called “capacity mechanism”, would aim to ensure reliable energy supplies as old coal plants retire.
Major coal generators say the proposal will achieve this aim. But renewables operators and others oppose the plan, saying it will pay coal plants for simply existing and delay the clean energy transition.
So where does the truth lie? Unless carefully designed, the proposal may enable coal generators to keep polluting when they might otherwise have closed. This is clearly at odds with the need to rapidly cut greenhouse gas emissions and stabilise Earth’s climate.
Paying coal stations to exist
The ESB provides advice to the nation’s energy ministers and comprises the heads of Australia’s major energy governing bodies.
Advice to the ministers on the electricity market redesign, released on Thursday, includes a recommendation for a mechanism formally known as the Physical Retailer Reliability Obligation (PRRO).
It would mean electricity generators are paid not only for the actual electricity they produce, which is the case now, but also for having the capacity to scale up electricity generation when needed.
Electricity prices on the wholesale market – where electricity is bought and sold – vary depending on the time of day. Prices are typically much higher when consumer demand peaks, such as in the evenings when we turn on heaters or air-conditioners. This provides a strong financial incentive for generators to provide reliable electricity at these times.
As a result of these incentives, Australia’s electricity system has been very reliable to date.
But the ESB says as more renewables projects come online, this reliability is not assured – due to investor uncertainty around when coal plants will close and how governments will intervene in the market.
Under the proposed change, electricity retailers – the companies everyday consumers buy energy from – must enter into contracts with individual electricity generators to make capacity available to the market.
Energy authorities would decide what proportion of a generator’s capacity could be relied upon at critical times. Retailers would then pay generators regardless of whether or not they produce electricity when needed.
In fact, coal generators are virtually the only groups backing the proposed change. They say it would keep the electricity system reliable, because the rapid expansion of rooftop solar has lowered wholesale prices to the point coal plants struggle to stay profitable.
The ESB says the subsidy would also go to other producers of dispatchable energy such as batteries and pumped hydro. It says such businesses require guaranteed revenue streams if they’re to invest in new infrastructure.
A questionable plan
In our view, the arguments from coal generators and the ESB require greater scrutiny.
Firstly, the ESB’s suggestion that the existing market is not driving investment in new dispatchable generation is not supported by recent data. As the Australian Energy Market Operator recently noted, about 3.7 gigawatts of new gas, battery and hydro projects are set to enter the market in coming years. This is on top of 3.2 gigawatts of new wind and solar under construction. Together, this totals more than four times the operating capacity of AGL’s Liddell coal plant in New South Wales.
It’s also difficult to argue the system is made more reliable by paying dispatchable coal stations to stay around longer.
One in four Australian homes have rooftop solar panels, and installation continues to grow. This reduces demand for coal-fired power when the sun is shining.
The electricity market needs generators that can turn on and off quickly in response to this variable demand. Hydro, batteries and some gas plants can do this. Coal-fired power stations cannot – they are too slow and inflexible.
Coal stations are also becoming less reliable and prone to breakdowns as they age. Paying them to stay open can block investment in more flexible and reliable resources.
Critics of the proposed change argue coal generators can’t compete in a world of expanding rooftop solar, and when large corporate buyers are increasingly demanding zero-emissions electricity.
There is merit in these arguments. The recommended change may simply create a new revenue stream for coal plants enabling them to stay open when they might otherwise have exited the market.
Governments should also consider that up to A$5.5 billion in taxpayer assistance was allocated to coal-fired generators in 2012 to help them transition under the Gillard government’s (since repealed) climate policies. Asking consumers to again pay for coal stations to stay open doesn’t seem equitable.
The ultimate test
The nation’s energy ministers have not yet decided on the reforms. As usual, the devil will be in the detail.
For any new scheme to improve electricity reliability, it should solely reward new flexible generation such as hydro, batteries, and 100% clean hydrogen or biofuel-ready gas turbines.
For example, reliability could be improved by establishing a physical “reserve market” of new, flexible generators which would operate alongside the existing market. This generation could be seamlessly introduced as existing generation fails and exits.
The ESB has recommended such a measure, and pivoting the capacity mechanism policy to reward only new generators could be beneficial.
The Grattan Institute
has also proposed a scheme to give businesses more certainty about when coal plant will close. Together, these options would address the ESB’s concerns.
This month’s troubling report by the Intergovernmental Panel on Climate Change was yet another reminder of the need to dramatically slash emissions from burning fossil fuels.
Energy regulators, politicians and the energy industry owe it to our children and future generations to embrace a zero-emissions energy system. The reform of Australia’s electricity market will ultimately be assessed against this overriding obligation.
Farmers can encourage and accelerate this process through methods that increase plant production, such as improving nutrient management or sowing permanent pastures. For each unit of atmospheric carbon they remove in this way, farmers can earn “carbon credits” to be sold in emissions trading markets.
But not all carbon credits are created equal. In one high-profile deal in January, an Australian farm sold soil carbon credits to Microsoft under a scheme based in the United States. We analysed the methodology behind the trade, and found some increases in soil carbon claimed under the scheme were far too optimistic.
It’s just one of several problems raised by the sale of carbon credits offshore. If not addressed, the credibility of carbon trading will be undermined. Ultimately the climate – and the planet – will be the loser.
What is soil carbon trading?
Plants naturally remove carbon dioxide (CO₂) from the air through photosynthesis. As plants decompose, carbon-laden organic matter is added to the soil. If more organic matter is added than is lost, soil carbon levels increase.
Carbon trading schemes require the increase in soil carbon levels to be measured. The measurement methods are well-established, but can be costly and complex because they involve collecting and analysing large numbers of soil samples. And different carbon credit schemes measure the change in different ways – some more robust than others.
The Australian government’s Emissions Reduction Fund has a rigorous approach to soil sampling, laboratory analysis and calculation of credits. This ensures only genuine removals of atmospheric carbon are rewarded, in the form of “Australian Carbon Credit Units”.
Farmers can choose other schemes under which to earn carbon credits, such as the US-based carbon offset platform Regen Network.
Regen Network’s method for estimating soil carbon largely involves collecting data via satellite imagery. The extent of physical on-the-ground soil sampling is limited.
Regen Network issues “CarbonPlus credits” to farmers deemed to have increased soil carbon stores. Farmers then sell these credits on the Regen Network trading platform.
‘A number of concerns’
It was Regen Network which sold Microsoft the soil carbon credits generated by an Australian farm, Wilmot Station. Wilmot is owned by the Macdoch Group, and other Macdoch properties have also claimed carbon credits under the Regen Scheme.
Regen Network should be applauded for making its methods and calculations available online. And we appreciate Regen’s open, collaborative approach to developing its methods.
However, we have reviewed their documents and have a number of concerns:
the dry weight of soil in a known volume, also known as “bulk density”, is a key factor in calculating soil carbon stocks. Rather than bulk density being measured from field samples, it was calculated using an equation. We examined this method and determined it was far less reliable than field sampling
Estimates of soil carbon were not adjusted for gravel content. Because gravel contains no carbon, carbon stock may have been overestimated
The remote sensing used by Regen Network involved assessment of vegetation cover via satellite imagery, from which soil carbon levels were estimated. However, vegetation cover obscures soil, and research has found predictions of soil carbon using this method are highly uncertain.
Wilmot increased soil carbon, or “sequestration”, through changes to grazing and pasture management. The resulting rates of carbon storage calculated by Regen Network were extremely high – 7,660 tonnes of carbon over 1,094 hectares. This amounts to 7 tonnes of carbon per hectare from 2018 to 2019.
These results are not consistent with our experience of what is possible through pasture management. For example, the CSIRO has documented soil carbon increases of 0.1 to 0.3 tonnes of carbon per hectare per year in Australia from a range of methods to increase pasture production.
We believe inaccurate methods have led to the carbon increase being overestimated. Thus, it appears excess carbon credits may have been awarded.
Many carbon trading schemes apply rules to ensure integrity is maintained. These include:
an “additionality test” to ensure the extra carbon storage in the soil would not have happened anyway. It would prevent, for example, farmers claiming credits for practices they adopted in the past
ensuring sequestered carbon is maintained over time
disallowing double-counting of credits – for example, by preventing a country claiming credits that have been sold offshore.
The Emissions Reduction Fund and other well-recognised international schemes, such as Verra and Gold Standard, apply these rules stringently. Regen Network’s safeguards are less rigorous.
Responses to these claims from Regen Network and Macdoch Group can be found at the end of this article. A full response from Regen can also be found here.
Not in the national interest?
Putting aside the problems noted above, the offshore sale of soil carbon credits generated by Australian farmers raises other concerns.
First, selling credits offshore means Australia loses out, by not being able to claim the abatement towards our own government and industry targets.
Second, soil carbon does not have unlimited emissions reduction potential. The quantum of carbon that can be stored in each hectare of soil is constrained, and limited by factors such as land availability and climate change. So measures to increase soil carbon should not detract from society’s efforts to reduce emissions from fossil fuel use.
And third, ensuring carbon remains in soil long after it’s deposited is a challenge because soil microbes break down organic matter. Carbon credit schemes commonly manage this by requiring a “buffer” of unsold credits. If stored carbon is lost, farmers must relinquish credits from the buffer.
If the loss is greater than the buffer, credits must be purchased to make up the difference. This exposes farmers to financial risk, especially if carbon prices rise.
Soil carbon is a promising way for Australia to substantially reduce its emissions. But methods used to measure gains in soil carbon must be accurate.
Carbon markets must be regulated to ensure credit is awarded for genuine abatement, and risks to farmers are limited. And the extent to which offshore carbon markets prevent Australia from meeting its own obligations to reduce emissions should be clarified and managed.
Improving the integrity of soil carbon trading will have benefits beyond emissions reduction. It will also improve soil health and farm productivity, helping agriculture become more resilient under climate change.
Regen Network response
Regen Network provided The Conversation with a response to concerns raised in this article. The full nine-page statement provided by Regen Network is available here.
The following is a brief summary of Regen Network’s statement:
– Limited on-ground soil sampling: Regen Network said its usual minimum number of soil samples was not reached in the case of Wilmot Station, because historical soil samples – taken before the project began – were used. To compensate for this, relevant sample data from a different farm was combined with data from Wilmot.
“We understand the use of ancillary data does not follow best practice and our team is working hard to ensure future projects are run using a sufficient number of samples,” Regen Network said.
– Bulk density: Regen Network said the historical sample data from Wilmot did not include “bulk density” measurements needed to estimate carbon stocks, which required “deviations” from its usual methodology. However the company was taking steps to ensure such estimates in future projects “can be provided with higher degrees of accuracy”.
– Gravel content: Regen Network said lab reports for soil samples included only the weight, not volume, of gravel present. “Best sampling practice should include the gravel volume as an essential parameter for accurate bulk density measurements. We will make sure to address this in our next round of upgrades and appreciate the observation!” the statement said.
– Remote sensing of vegetation: Regen Network said it did not use vegetation assessment at Wilmot station. It tested a vegetation assessment index at another property and found it ineffective at estimating soil carbon. At Wilmot station Regen used so-called individual “spectral bands” to estimate soil carbon at locations where on-ground sampling was not undertaken.
– Sequestration rates at Wilmot: Regen Network said while it was difficult to directly compare local sequestration rates across climatic and geologic zones, the sequestration rates for the projects in question “fall within the relatively wide range of sequestration rates” reported in key scientific studies.
Regen Network said its methodology “provides a conservative estimate on the final number of credits issued”. Its statement outlines the steps taken to ensure soil carbon levels are not overestimated.
– Integrity safeguards: Regen Network said it employs standards “based both on existing standards of reputable programs […] and inputs from project developers, in order to come up with a standard that not only is rigorous but also practical”. Regen Network takes steps to ensure additionality and permanence of carbon stores, as well as avoid double counting of carbon credits generated through their platform.
A more detailed response from Regen Network can be found here.
Wilmot Station response
Wilmot Station provided the following response from Alasdair Macleod, chairman of Macdoch Group. It has been edited for brevity:
We entered into the deals with Regen Network/Microsoft because we wanted to give a hint of the huge potential that we believe exists for farmers in Australia and globally to sequester soil carbon which can be sold through offset markets or via other methods of value creation.
Whilst we recognise that the soil carbon credits generated on the Macdoch Group properties in the Regen Network/Microsoft deal will not be included in Australia’s national carbon accounts, it is our hope that over time the regulated market will move towards including appropriately rigorous transactions such as these in some form.
At the same time we have also been working closely with the Australian government, industry organisations, academia and other interested parties on Macdoch Group properties to develop appropriate soil carbon methodologies under the government’s Climate Solutions Fund.
This is because carbon measurement methodologies are an evolving science. We have always acknowledged and will welcome improvements that will be made over the coming years to the methodologies utilised by both the voluntary and regulated markets.
In any event it has become clear that there is huge demand from the private sector for offset deals of this nature and we will continue to work towards ensuring that other farmers can take advantage of the opportunities that will become available to those that are farming in a carbon-friendly fashion.
Michelle Grattan, University of CanberraAs Scott Morrison gradually pivots his climate policy towards embracing a target of net zero emissions by 2050, he is seeking to distinguish the government from “inner city” types and political opponents who’ve been marching down that road for a long time.
The Prime Minister told a Business Council of Australia dinner on Monday the government was charting its own course “to ensure Australia is well placed to prosper through the great energy transition of our time, consistent with strong action on climate change”.
“The key to meeting our climate change ambitions is commercialisation of low emissions technology,” he said.
“We are going to meet our ambitions with the smartest minds, the best technology and the animal spirits of capitalism.”
Morrison was speaking ahead of this week’s two-day virtual summit on climate called by President Biden.
The Biden administration has made the issue a major policy priority, which has increased the pressure on Australia to sign up to the 2050 target before the Glasgow meeting on climate late in the year.
Morrison acknowledged that “we need to change our energy mix over the next 30 years on the road to net zero emissions”.
But he said “we will not achieve net zero in the cafes, dinner parties and wine bars of our inner cities.
“It will not be achieved by taxing our industries that provide livelihoods for millions of Australians off the planet, as our political opponents sought to do, when they were given the chance.
“It will be achieved by the pioneering entrepreneurialism and innovation of Australia’s industrial workhorses, farmers and scientists.
“It will be won in places like the Pilbara, the Hunter, Gladstone, Portland, Whyalla, Bell Bay, and the Riverina.
“In the factories of our regional towns and outer suburbs. In the labs of our best research institutes and scientists.
“It will be won in our energy sector. In our industrial sector. In our agricultural sector. In our manufacturing sector.
“This is where the road to net zero is being paved in Australia. And those industries and all who work in them, will reap the benefits of the changes they are making and pioneering.”
Morrison said Australia’s natural resources and its industries’ strength presented “a huge opportunity to capitalise on the new energy economy”.
“And let’s not forget that Australia already produces many of the products that will be in growing demand as part of a low carbon future – from copper to lithium.
“It is this practical approach of making new technologies commercial that will see us achieve our goals.”
He said Australia was making real progress.
Its total emissions were 19% lower at the end of 2020 than in 2005.
“Our domestic emissions have already fallen by 36% from 2005 levels.
“Australia has deployed renewable energy ten times faster than the global average and four times faster than in Europe and the United States.
“One in four rooftops has solar, more than anywhere else in the world.
“Australia takes our emission reductions targets very seriously. We don’t make them lightly. We prepare our plan to achieve them and we follow through.”
Even with all humanity’s carbon emissions to date, there’s a lot less carbon dioxide in Earth’s atmosphere than Venus, and Earth is further away from the Sun. But if carbon emissions continue at the current rate, is there any risk of reaching a tipping point at which a runaway greenhouse effect takes over, making Earth uninhabitable for any form of life?
When sunlight enters the Earth’s atmosphere, some is reflected back to space by clouds, some is reflected by bright surfaces such as ice and snow and some is absorbed by the land surface and ocean.
To maintain a balance, the Earth emits energy back to space in the form of infrared, or longwave, radiation. Some longwave radiation is absorbed in the atmosphere by heat-trapping gases, such as carbon dioxide.
One consequence of increasing atmospheric carbon dioxide concentrations is that, as the atmosphere warms, it can contain more water vapour. Since water vapour is itself a greenhouse gas, this can create an amplifying effect.
In general, as surface temperature increases, the Earth emits more longwave radiation to space to maintain the energy balance. But there is a limit to how much longwave radiation can be emitted.
If the atmosphere becomes completely saturated with water vapour, the Earth’s surface and lower atmosphere warm up, but further increases in emission of longwave radiation are not possible.
The runaway greenhouse
This is termed a runaway greenhouse and would mean the Earth would become lethally hot and unable to cool itself by emitting heat to space.
Ultimately, this is the fate of the Earth. In billions of years from now the Sun will become brighter and grow into a Red Dwarf. As the Sun’s luminosity increases, the Earth will become hotter and its oceans will evaporate.
The hot and steamy atmosphere will ensure the Earth is just as uninhabitable to current life-forms as Venus is today.
But could we bring such a situation about on a shorter timeframe through continued carbon dioxide emissions? The good news is, probably not.
We’re safe, for now
Previous research has found that, due to differences in the properties of water vapour and carbon dioxide as greenhouse gases, adding carbon dioxide to the atmosphere is likely insufficient to trigger a runaway greenhouse.
In geological terms, this is a very large increase to take place over a short period of time. Yet human emissions of carbon dioxide are considered insufficient to trigger a runaway greenhouse, given the fossil fuel reserves available.
The caveat to all the above is that the models scientists use to study future climate are built based on past, known conditions. It is therefore difficult to predict how certain parts of the climate system might operate under extremely high greenhouse gas emissions scenarios.
For example, clouds can reflect sunlight back to space, or they can trap heat emitted by the Earth. In a warming world, scientists are still unclear on the role clouds will play.
While a runaway greenhouse would make Earth completely uninhabitable to life as we know it, the losses that may accrue from just a few degrees Celsius of global warming are serious and must not be discounted.