The effects of an emissions offsets scheme on Australian agriculture (2010)

reporting, criticism or review. Selected passages, tables or diagrams may be reproduced for such purposes provided acknowledgment of the source is included. Major extracts or the entire document may not be reproduced by any process without the written permission of the Executive Director, ABARE. Abstract The introduction of an offsets scheme is the key climate change mitigation policy for Australian agriculture. This paper presents an assessment, both qualitative and quantitative, of the long-run effects of an offsets scheme on Australian agriculture. The uptake of agricultural technologies and practices that may generate offsets is likely to be significantly higher in the long run than in the short run. This paper focuses on the long-run uptake of mitigation technologies and practices under the assumption that relevant offset methodologies for agriculture will have been developed during the projection period to 2030. The effects of the offsets scheme on Australian agriculture, as a whole, are projected to be positive by 2030. Costs per unit of production, adjusted for offset revenue, are projected to fall, production levels to increase and total emissions to fall, relative to the reference case. However, the overall effects mask variances across agricultural industries and farms. The beef cattle and sheep meat industry is projected to experience the largest increase in production, while other, less emissions-intensive, industries are projected to experience smaller increases, or to decrease, as a result of the Carbon Pollution Reduction Scheme with offsets provisions. The quantitative analysis is based on specific assumptions and should be viewed as indicative only.