House of Assembly Fifty-First Parliament, Third Session (51-3) 51 3 Parliament of South Australia House of Assembly published Answers to Questions Emissions Trading Scheme EMISSIONS TRADING SCHEME The Hon. G.M. GUNN House of Assembly Stuart EMISSIONS TRADING SCHEME 478 The Hon. G.M. GUNN (Stuart) (19 May 2009). 1.	Has the Department considered the effects of carbon trading arrangements proposed by the Federal Government on the agricultural sector in South Australia? 2.	Does the Department or any other State Government Agency possess any reports on research into this issue? The Hon. P. CAICA House of Assembly Colton Minister for Agriculture Minister for Industrial Relations Minister for Forests Minister for Regional Development EMISSIONS TRADING SCHEME The Hon. P. CAICA (Colton—Minister for Agriculture, Food and Fisheries, Minister for Industrial Relations, Minister for Forests, Minister for Regional Development): I have been advised: Yes, PIRSA has considered the implications of carbon trading arrangements proposed by the Federal Government on the agricultural sector in South Australia. Agriculture is second only to the stationary energy sector as the largest contributor to greenhouse gas production (GPP) in Australia (16.8 per cent). Approximately 65 per cent of agriculture's contribution comes from livestock (methane production from enteric fermentation, and manure management). Approximately 22 per cent comes from agricultural soils (cultivation) with 85 per cent of Australia's nitrous oxide emissions being released as a result of nitrogen fertiliser applications and nitrogen in animal excreta. Agriculture is not included in the Carbon Pollution Reduction Scheme (CPRS) currently under consideration by the Federal Government. Commencing this year the Federal Government is undertaking a work program to enable it to determine in 2013 whether or not to include agricultural emissions from 2015. Even though Agriculture is not included in the CPRS, producers may face increased production costs as GGP related costs increase in the manufacturing, transport and energy sectors. Current Status If Agriculture is included in the CPRS then producers will be accountable for GGP from livestock, nitrogen fertiliser applications, stubble burning and land clearing. Given the significant GGP by this sector, costs to primary producers could be substantial. Research groups across Australia are currently investigating methodologies for determining and accounting for GGP at the farm level using satellite imagery, GIS and weather observation data. Much of this work is being lead by the Department of Climate Change in Canberra. It has been suggested that farmers could offset their GGP by increasing soil carbon. It is extremely difficult, however, to increase soil carbon in areas with rainfall less than 10mm. Conversion of cropping land to pasture has the potential to increase soil carbon, however, when this pasture is retuned to cropping the carbon is released again. When cropping land is converted to permanent pasture it is only possible to increase soil carbon by a finite amount as the soil will eventually reach a new carbon plateau, after which it is not possible to increase soil carbon content. Within a rotational cropping/pasture system it is difficult to see soils being used successfully as a long-term solution for agricultural emission offsets. PIRSA does not have a report on this topic. The research is currently being undertaken. In this regard PIRSA and SARDI are supporting research being undertaken by Dr Camel Schmidt (CSIRO). Dr Schmidt is modelling the soil carbon baseline thresholds that would be expected to occur in agricultural soils under low rainfall grain and mixed operations. The outcomes of this work will be made available upon completion. SARDI is also undertaking a range of research focused on reducing GGP. This includes: Methane production SARDI has recently initiated a new $794,000 Meat and Livestock Australia funded research program to determine if it is possible to reduce the amount of methane produced by sheep and cattle. This research includes: selection of genetically low-methane production animals, the use of feed additives, and the influence of feed quality on methane production. Further investigations are needed into the use of feedlots for meat production. While feedlots allow feed quality to be better controlled (thus reducing methane production) and methane produced by animals to be collected, the GGP costs of producing feed elsewhere and trucking it to the site may prove to be substantial. Fertiliser application Work is being undertaken to reduce nitrous oxide emissions from fertiliser applications. This work includes; determining the optimum timing for application of nitrogenous fertilisers and the benefits of rainfall immediately after application.