1. Emissions Trading: Dairy industry response Allan Burgess President Australian Dairy Farmers

2. Australian agricultural and dairy emissions Australian agricultural emissions  Australian agriculture sector accounts for 16% of national emissions  Livestock emissions represent 71% of agriculture sectors emissions (which is 11% of national emissions) (Aust Greenhouse Office 2007) Breakup of livestock emissions  beef cattle 58%  sheep 26%  dairy cattle 12% Dairy farming generates three main emissions  methane (CH 4 ) most from rumen fermentation (stomach of cattle) & some effluent  70% of dairy farm emissions  nitrous oxide (N 2 O) from fertiliser, legumes and effluent  20% of dairy farm emissions  carbon dioxide (CO 2 ) from electricity and fuel consumption  10% of dairy farm emissions

3. Australian Dairy Farmers policy position  Sufficient scientific evidence regarding future worldwide climate change to justify industry action  Adaptation of farming systems to climate change is the industry’s highest priority as it will impact industry cost structures  Emissions mitigation is a major directive for all industries including agriculture  Dairy farming businesses need immediate and longer term access to practical information, the tools and guidance on what systems can be applied directly to their farm to manage change.  More information is needed to enable the dairy industry to better understand and react to:  Impacts from climate change on market settings and management of the supply chain  Climate variability and seasonal weather cycles within longer-term climate trends

4. Dairy industry advocacy  Proactive promotion of dairy industry’s positive record of greenhouse emission action  Many submissions developed across dairy and agriculture collaboration in response to government enquiries

5. Dairy industry investment  Dairy Australia invests around $30 million of dairy farmer levy payments and $15 million of taxpayer funds in projects and services for the benefit of the Australian dairy industry.  Dairy Australia Climate Change Strategy 2007-2010 aims to further develop dairy industry to be profitable and sustainable, capably and confidently managing the risks associated with climate change. Adaptation and mitigation identified as the two main areas of focus for the strategy.

6. Dairy industry initiatives  Dairying for Tomorrow DairySAT  Pasture Management  Greener Pastures  Feeding Pastures for Profit (Vic)  Fertiliser Usage – Accounting for Nutrients  Energy Usage – CowTime  Top Fodder, Soil and Nutrient Management (Vic) and Methane to Markets (digesters)

7. Federal Government – cap and trade Cap and trade scheme  an emissions trading scheme (ETS) in which a limit (or cap) is placed on the total emissions allowable from the activities or sectors covered under the scheme.  Tradable emissions permits (or credits) are issued up to an amount equal to the cap.

8. International trading scheme  If the Australian government is serious about reducing emissions - the ETS has to be a global scheme  Australian dairy industry, the NFF and the international agricultural community are working together to ensure that international greenhouse gas accounting rules appropriately account for agricultural emissions.  There are serious holes in the current Kyoto framework which do not address naturally occurring emissions or acknowledge on-farm improvements.

9. Federal Government Proposed emissions trading scheme (ETS) Carbon Pollution Reduction Scheme Green Paper key issues:  Agricultural Sector not included at start ETS in 2010  Sector’s capacity for inclusion / exclusion reviewed in 2013 based on:  emissions measurement, monitoring and verification accuracy  point of obligation identified (permit allocation at farm or milk processor)  ‘Emissions Intensive – Trade Exposed’ assistance for industries that meet emissions thresholds  Fuel taxes to be cut on a ‘cent-for-cent’ basis to offset price impacts  Potential for regional land use to be driven towards forestry  Assistance needed for regional communities

10. Australian Dairy Industry Council (ADIC)  Dairy industry advocacy through ADIC across the dairy value chain in response to the Federal Government Carbon Pollution Reduction Scheme Green Paper

11. Dairy industry submission ADIC submission response on the proposed emission trading scheme and its potential impacts:  Increased costs  Trade exposure  Value adding of fresh product  Rural and regional communities  Asset values and land values  Land-use change  Level of permit obligation (farm or milk processor)

12. Next steps forward  Further communication with industry stakeholders  NZ emissions trading scheme legislation analysis  Advocacy with Federal Ministers, Shadow Ministers and departmental staff