Taxing the Carbon out of your farm


Carbon emissions and targets are back in the news with the election promise by the opposition to ignore the cost to the Australian economy of its policy of a 45% reduction in emmissions by 2030 vs the much more manageable 26% target set by the liberals.

Labor’s herculean attempt to reduce emissions by a total of 226 million tonnes over the next 11 years is 4 times more than what has been achieved in the past 12 years. Such a massive reduction will require cuts across all parts of the economy but particularly in agriculture.

The difference between the Labor and Liberal targets approximates the emissions from the entire red meat, dairy, trucking, domestic aviation, rail and bus sectors. Assuming a Shorten government is not able to turn our entire power generating system over to renewables in the next 11 years, or force half of all cars sold to be electric, it raises the question of where they are going to find the 226 million tonnes.

It’s highly unlikely they will want to see another doubling of wholesale power prices, nor will they want to load up the price of petrol end energy with a carbon tax as both measures will hit the battlers struggling to pay their petrol and power bills. And we know the outer suburbs love their big four wheel drives so its unlikely the government will force them to trade in the Prados for a new electric car that cant tow their boats and caravans up north.

We know that 70% of agricultural emissions come from enteric fermentation – burping and farting livestock. For agriculture to play its part in the ALPs reduction target, Australia’s sheep and cattle numbers would need to be halved and our agricultural machinery would need to be upgraded to the latest Euro 6 low emissions diesel engines and that’s just the beginning.

The easiest way for the government to cover the cost of its target is to start by removing the offroad fuel rebate and place a carbon tax on heavy diesel engines and onto each one of Australia’s sheep and cattle. In a political sob to agriculture to warm us up for what’s coming they have offered Agriculture the opportunity to sell carbon storage projects to industry. But the promise comes with no real detail other than to provide an extra $40 million over four years to develop new methodologies and establish a carbon assessment standard. This is a slight of hand or Short-hand for a Carbon Cap and Trade or Tax, or you could read it as Farmers Cop and Pay.

The politics of marginal seats dictate that a Shorten government will be looking to target a group of high emitters which offer a lower risk of an electoral backlash. Such a group exist in farmers in safe coalition seats.

The fuel rebate has always been on the left green hit list so it will be the first to go. Next will be the call for a tax on older less efficient farm machinery so we could well end up with the introduction of minimum emissions standards on farm. The first to exit the industry if EU engine standards are brought in for all farm use will be the marginal or heavily indebted family farms running older equipment. And finally a carbon tax imposed on all livestock will be just another hit to an industry sector already under siege by the ALPs anti live export stance.

Such theorising is not scare mongering, it is just rational deduction on what is required to achieve Shortens mad 45% target. We know what the next obvious target is after coal fired power stations, and the heavy transport sector (which supports agriculture) – it wont be the city voters so it has to be the bush and farmers in particular. An Australian Farm Institute study (Vol 8, No 3, 2011) found that the average cost of a simple $23 carbon price on average WA grain farm would be $16,389 and that was nearly a decade ago so it must be well over $20,000 today, by 2030 it could well be double that.

The brutal global market that we operate in does not pay for our governments carbon virtue signalling. So, unless you are in the fortunate position to be able to afford to buy all new green, yellow or red farm machinery, run no livestock, and profitable enough to live with a carbon tax and no fuel rebates your farm business could be collateral damage under Labor’s future climate change solution. That’s the reality of the cost of virtue signalling it costs.

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