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Australia's Agricultural Sector

Discuss about the Climate Change Economics and Policies.

The aim of the report is to compare and contrast the 2 policies and analyze the possible impact of both the strategies on the certain business circumstance or a sector by applying the information. The policy on which the comparison is based is related to the Carbon Tax which is recently by Australia in the year 2012. The report is based on the Carbon Tax of Australia and the sector that has been selected for the analysis is Agriculture. It also includes the impacts of carbon policies on the sector. The risks and opportunities in a C constrained world related to the Agricultural sector will be discussed in the report. Along with this, the report includes the adaptation strategies for the agriculture sector in Australia.

Australia is a country which is largely dependent on its agricultural sector. The country is commonly known as the major agricultural producer and exporter of forestry and fishing. This sector provides the employment to approx. 325,300. Agriculture in the today’s world is very sophisticated and highly technical industry. The technology has contributed a lot to make the industry most innovative and effective industries of Australia. The farmers in Australia produce approx. 91% of the daily domestic food. On average the farmer of Australia exports 60% of their crop to the other nations (Export, 2017). This shows that this sector of Australia contributes to the economy of Australia. The country produces enough food to feed more than 60 million people. This shows that this sector is one of the important sectors for the government of the country.

A recent study by the Australia Bureau of Agriculture and Resource Economics and Sciences (ABARES) confirms that the changes in the climate lead to the adverse effect on the productivities of cropping farms basically in south-western Australia and South-eastern Australia (Gary, 2017). The climate change includes the change in the hotter and drier areas of the country that leads to the issues. Australia witnesses the average temperature rises more than 1.5 degrees Fahrenheit since the last century. Considering the data from CSIRO, Australia's national science agency the rise in the global emissions continue to be a challenge for the sector (Patterson, 2015). The farmers need good rainfall for some crops and less for other and they want the temperature to be marinated for growing the crops in Australia. Though, the change in the climate of the country leads to the major impact on the agriculture sector. The expected impact on the Australia agriculture due to climate include: -

  • Reduce rainfall, less runoff, smaller irrigation storage volumes.
  • The rise in temperature, increase in the evaporation and the greater evapotranspiration (Smalley, 2018).
  • More Variable and less predictable with the more intense events.

Impact of Climate Change on Agriculture

The IPCC (Intergovernmental Panel on Climate change) shows that the change in the climate is unequivocal. Along with these human activities, particular emissions of carbon dioxide is leading cause which leads to the impact on the agriculture (Patterson, 2015). The changes in the climate are observed in all the geographical regions as the climate and oceans are warming, level of the sea is increasing with the change in climate weather patterns and the extent along with the volume of ice and snow are diminishing. All these changes in the climate will continue under the range of the possible greenhouse gas emissions that took place in the 21st century.

The major projected impact on the agriculture is the extreme climate events which include heat waves, floods, droughts and the wildfires which get combine with the long-term trends which include the rise in the temperature and the changes in the predicated patterns with the deep applications for the Australia agriculture sector (Havlík, et al 2015).

The carbon policies lead to the influence on the agricultural sector because the change in the policies of the country leads to the change in climate. This section of the report includes the comparison of the direct action plan and Carbon Tax. The carbon tax is a tax on the energy sources which emit the carbon dioxide. The administration of Australian initiated a carbon pricing scheme or carbon tax through the Clean Energy Act 2011. The scheme was proposed to regulate the emission in Australia (Parliament of Australia, 2010). This initiative also supports the growth of the economy with the help of the progress of the clean energy equipment. This initiative was managed by the Climate change Authority and the Clean Energy Controller. This carbon tax was introduced on 1st July 2012. The government wants to regulate emissions in the nation with the motive that the polluters who make use of the high amount of the carbon and release in the atmosphere will pay a huge amount as a tax (Burke, 2016).

On the other hand, In July 2014, the association administration cancelled the carbon tax by substituting it with the Direct Action Plan (DA plan) which works mainly to offer the funds to the business to incentivize the emission reduction activities (Australian Government, 2018). The government of Australia has spent approx. A$1.7 billion on 143 million tons of emissions at an average cost of A$12 a tonne. DA plan is defined as the climate change policy to decrease Australia's greenhouse gas releases that were released in 2010 while the Coalition was in Opposition. The motive behind the introduction of the DA plan was to reduce the emission in country by 5% by the year 2020 compared to the 1990 levels (Parliament of Australia, 2018).

Impacts of Carbon Policies

The research found that the DA plan was not as in effect as a carbon tax in driving the corporations to act immediately and manage the emissions of country (Pears, 2013). In addition, it was found that the carbon tax creates not only the monetary pressure but also a status threat for the great emitting corporations. This will make them reduce the use of the carbon emission and if they continue using the carbon they will pay a high amount for the same. The positive side of the DA plan indicated that it leads to the less damage to the Australian economy comparing it with the carbon tax (Kumarasiri, Jubb, and Houghton, 2016).

The carbon-constrained world will lead to the opportunities as well as the risk for the Agriculture sector in Australia. Carbon Constrained world means the control on the carbon that is available in the atmosphere. The carbon-constrained world is an opportunity for the sector as there will be fewer fluctuations in the climate. The climate directly affects the agricultural sector due to which the production of the crops doesn’t take place effectively (Klein, et al 2014). The less fluctuation in the climate takes place when the level of carbon in the atmosphere decreases. The agriculture sector will get the benefit of growing the crop in the less constrained world as the production of goods will be done in an effective way. In addition, the farmers will be able to grow the existing crops ineffective way which leads to the high productivity of existing crops (Lipper, et al 2014).

The carbon-constrained world leads to the risks for the agriculture sector in Australia. The overcontrolled of the carbon within the atmosphere leads to the risk for the framers because the crops need sufficient amount of carbon to grow crops in the atmosphere. The less amount of carbon in the atmosphere will lead to the risk for the farmers in the agriculture sector as the productivity of the crops will decrease and the crops don't remain fresh in quality (Frank, et al 2017).

The less amount of carbon leads to the less ripped crops which are not healthy to be consumed by the customers. The low carbon crops must be specialized probable to be raising trend in the conversion to the low carbon economy. In addition, the effective presence of the LDCs and the low-income agricultural exports in the carbon labeling schemes could provide the major occasions for the global carbon emissions. Around the 1/3rd of the entire carbon mitigation efforts need to escape the hazardous climate change (Keana, 2009).

Risks and Opportunities in a Carbon-Constrained World

Australian agriculture needs to adapt the strategies to overcome the carbon effect on the sector by the farmers. The farmed need to manage the several risks to sustainable agriculture in an environment of the climate change and some of the strategies that are required to adopt are discussed below: -

  • The adaptation to build the resilience into the agriculture system. This resilience takes place in the agriculture with the help of the mitigation and the adaptation. These aspects are discussed below: -
  1. Mitigation: - In the agriculture sector the farmers need to take steps for the mitigation. These steps include the improvement in feeding and dietary additives for the livestock’s, enhancing the management of the cereals, building the agro-forestry systems, replacing the fossil fuels by biofuels and the integration of bioenergy. Along with this, there is need to reduce the overconsumption in the regions where it is prevalent. In addition, there is need to reduce the loss and food wastage in the supply chains (European Climate Foundation, 2018).
  2. Adaptation: - The adaptation is highly context-specific and no particular approach for decreasing the risk. The steps that the company make use include livestock options, policy options, and the crop options. In the livestock options, the farmers can manage the quality of livestock diet, match the stocking rates with the posture production and many others. In the policy options; it includes the index-weather insurance and the improving the resource pricing. At last, the crop options in which the farmers should ensure to bring the improvement in the crops to high temperature, improving the crop rotations systems and others (European Climate Foundation, 2018).
  • The mitigation leads to a reduction in the greenhouse gas emissions.
  • R&D is essential for the agricultural sector in Australia to improve the capacity to respond to the climate change.
  • The effective communication is required because the awareness and communication to inform the decisions that are taken by the farmers for the primary producers and the rural communities.

Conclusion

In the end, it can be concluded that the climate has a direct influence on the agricultural sector of Australia. The climate is one of the important factors which are considered by the Australian farmers. The climate majorly leads to the impact on the agriculture sector such as a rise in temperature, rainfall, and other factors. Moreover, the carbon policies that are a carbon tax and DA plan are discussed and compared in the report. The report also includes the risks and opportunities in the carbon Constrained world for the agriculture sector in the Australian market. In the end, it includes the strategies that are required to be considered by the farmers of Australia in the Agriculture sector. It is recommended to the farmers to bring the use of the technology in their activities performed at fields.

References

Australian Government (2018) Repealing the Carbon Tax [Online]. Available from: https://www.environment.gov.au/climate-change/government/repealing-carbon-tax [Accessed on 5th June 2018]

Burke, P.J. (2016) Undermined by adverse selection: Australia's direct action abatement subsidies. Economic Papers: A journal of applied economics and policy, 35(3), pp.216-229.

European Climate Foundation (2018) Climate Change: Implications for Agriculture [Online]. Available from: https://europeanclimate.org/climate-change-implications-for-agriculture/ [Accessed on 5th June 2018]

Export. gov. (2017) Australia - Agricultural Sector [Online]. Available from: https://www.export.gov/article?id=Australia-agricultural-sector [Accessed on 5th June 2018]

Frank, S., Havlík, P., Soussana, J.F., Levesque, A., Valin, H., Wollenberg, E., Kleinwechter, U., Fricko, O., Gusti, M., Herrero, M. and Smith, P. (2017) Reducing greenhouse gas emissions in agriculture without compromising food security?. Environmental Research Letters, 12(10), p.105004.

Gary, D. (2017) Australian farmers are adapting to climate change [Online]. Available from: https://theconversation.com/australian-farmers-are-adapting-to-climate-change-76939 [Accessed on 5th June 2018]

Havlík, P., Valin, H., Gusti, M., Schmid, E., Leclère, D., Forsell, N., Herrero, M., Khabarov, N., Mosnier, A., Cantele, M. and Obersteiner, M. (2015) Climate change impacts and mitigation in the developing world: an integrated assessment of the agriculture and forestry sectors.

Keana, J. (2009) Trade in a carbon-constrained world: adapting to climate change and the changing global trade environment [Online]. Available from:  https://www.odi.org/comment/4577-trade-carbon-constrained-world-adapting-climate-change-and-changing-global-trade-environment [Accessed on 5th June 2018]

Klein, D., Humpenöder, F., Bauer, N., Dietrich, J.P., Popp, A., Bodirsky, B.L., Bonsch, M. and Lotze-Campen, H. (2014) The global economic long-term potential of modern biomass in a climate-constrained world. Environmental Research Letters, 9(7), p.074017.

Kumarasiri, J., Jubb, C. and Houghton, K. (2016) Direct Action Plan not as motivating as the Carbon Tax [Online]. Available from: https://www.swinburne.edu.au/news/latest-news/2016/09/direct-action-plan-not-as-motivating-as-the-carbon-tax.php [Accessed on 5th June 2018]

Lipper, L., Thornton, P., Campbell, B.M., Baedeker, T., Braimoh, A., Bwalya, M., Caron, P., Cattaneo, A., Garrity, D., Henry, K. and Hottle, R. (2014) Climate-smart agriculture for food security. Nature Climate Change, 4(12), p.1068.

Parliament of Australia (2010) Carbon taxes [Online]. Available from: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Browse_by_Topic/ClimateChangeold/responses/economic/carbontax [Accessed on 5th June 2018]

Parliament of Australia (2018) Direct Action Plan [Online]. Available from: https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Environment_and_Communications/Direct_Action_Plan/Report/c05 [Accessed on 5th June 2018]

Patterson, B. (2015) Australia's Farmers Challenged by Climate Change [Online]. Available from: https://www.scientificamerican.com/article/australia-s-farmers-challenged-by-climate-change/ [Accessed on 5th June 2018]

Pears, A. (2013) Direct action vs carbon pricing: we can have it all [Online]. Available from: https://theconversation.com/direct-action-vs-carbon-pricing-we-can-have-it-all-20095 [Accessed on 5th June 2018]

Smalley, S. (2018) Australian agriculture & climate change [Online]. Available from: https://www.oecd.org/tad/sustainable-agriculture/41713130.pdf [Accessed on 5th June 2018]

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