THE IMPACT OF AN AUSTRALIAN EMISSION TRADING SCHEME AND THE USE OF AGRICHAR ON THE SUGARCANE INDUSTRY

Cameron Thomas

No 47641, 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia from Australian Agricultural and Resource Economics Society

Abstract: The Australian government’s proposed Carbon Pollution Reduction Scheme (CPRS) is likely to have a significant impact on the price of farm inputs (diesel, fertiliser, water and electricity). Furthermore, offsets (reduction or removal of greenhouse gas emissions that counterbalances emissions elsewhere in the economy) are a potential area of expansion under the scheme with particular interest in the agricultural sector. Agrichar is one of the new technologies and farming practices being investigated to counteract CPRS-imposed costs. Its two claimed benefits which relate both to the profitability of cane growers as well as to climate change are: the reduction in fertiliser application; and the carbon which agrichar can store in the soil for hundreds to thousands of years. This study drew on the Farm Economics Analysis Tool (FEAT) developed by the Queensland Department of Primary Industries and Fisheries specifically for the sugarcane industry. An analysis was conducted for a typical sugarcane farming enterprise in the Herbert Region of North Queensland. The scenarios included in the analysis recognised the change in input prices due to an emissions trading scheme, the change in farm practices when agrichar is included in operations and the potential to trade in offsets from that additional carbon stored by the use of agrichar. The sugarcane grower was found to benefit from the inclusion of agrichar into the operations. Agrichar is seen as a potential and viable option for sugarcane growers and should be considered as an alternative under the emissions trading scheme to minimise the impact of the rise in input costs. Further scientific and policy development could see the possibility for stored carbon to be traded in the offsets market, providing additional, although minor, cash flow to the grower.

Pages: 18
Date: 2009
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare09:47641

DOI: 10.22004/ag.econ.47641

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