Making Agriculture Carbon Neutral Amid a Changing Climate: The Case of South-Western Australia

Abstract

Making Australian agriculture carbon neutral by 2050 is a goal espoused by several agricultural organisations in Australia. How costly might it be to attain that goal, especially when adverse climate change projections apply to agriculture in southern Australia? This study uses scenario analysis to examine agricultural emissions and their abatement via reforestation in south-western Australia under projected climate change. Most scenarios include the likelihood of agricultural emissions being reduced in the coming decades. However, the impact of projected adverse climate change on tree growth and tree survival means that the cost of achieving agricultural carbon neutrality via reforestation is forecast to increase in south-western Australia. Agricultural R&D and innovation that enable agricultural emissions to diminish in the coming decades will be crucial to lessen the cost of achieving carbon neutrality. On balance, the more likely scenarios reveal the real cost of achieving carbon neutrality will not greatly increase. The cost of achieving carbon neutrality under the various scenarios is raised by an additional AUD22 million to AUD100 million per annum in constant 2020 dollar terms. This magnitude of cost increase is very small relative to the region’s gross value of agricultural production that is regularly greater than AUD10 billion.