Responding to climate change

Coal-fired power generation is the largest single contributor to NSW greenhouse gas emissions, so reducing emissions from this sector is critical to achieving substantial cuts in emissions. Technological solutions to control emissions, particularly ‘carbon capture and storage’ have been proposed.

Agriculture contributes 12% of Australia’s emissions, largely due to methane, from ruminant livestock digestion, and nitrous oxide from soils (Figure 16). Methane and nitrous oxide are powerful greenhouse gases, with global warming potential 23 and 296 times, respectively, greater than that of carbon dioxide (IPCC, 2001). Emissions of methane and nitrous oxide represent inefficiency and loss of energy, and therefore reducing these emissions will result in more efficient use of resources. A number of strategies could reduce ruminant methane emissions, and emissions from manure. Management of soils in cropping, pastoral and forest systems can reduce nitrous oxide emissions and enhance methane uptake.

Forestry offers potential mitigation through sequestration in growing forests and in wood products, and use of forest biomass for bioenergy.

There is potential for biofuels to reduce emissions from the transport sector.

The opportunities for mitigation of greenhouse gas emissions through actions in the primary industries sector are described in this section.

Carbon dioxide equivalent emissions from the agricultural sector. (Source: DEH 2006)
Carbon dioxide equivalent emissions from the agricultural sector. (Source: DEH 2006)

In developing policy responses to climate change, it is important to recognise that mitigation actions undertaken through change in land use can impact on other environmental attributes. Some actions are synergistic, (eg reforestation can sequester carbon, enhance biodiversity and mitigate dryland salinity), but there are inevitably trade-offs between environmental objectives in most land use decisions. Policies that address the multiple environmental goals simultaneously will be most efficient and effective in promoting optimal environmental outcomes and sustainable land use. (Cowie et al. 2007).

Carbon capture and storage

Carbon capture and storage (CCS) is a potential mitigation measure that, if implemented broadly, could provide huge reductions in Greenhouse Gas (GHG) emissions from fossil fuel combustion for electricity generation. Potential barriers to implementation include the high cost, location and capacity of suitable storage sites, and the requirement for long-term monitoring (IPCC, 2005). Carbon capture, transport and storage is predicted to increase electricity cost by 21-91% for new plants. Retrofitting of existing plants is estimated to double and even triple electricity costs. (IPCC, 2005). The CCS process requires additional fuel and produces additional carbon dioxide emissions compared with a similar plant without capture.

Power station cooling towers

Power station cooling towers

A power generation system that is based on combustion of renewable biomass rather than coal or gas, coupled with CCS, can give a net removal of carbon dioxide from the atmosphere (Möllersten et al. 2003). There are four identified options for the storage of CO2:

  • storage in depleted petroleum and gas reservoirs,
  • injection into deep uneconomic coal seams,
  • mineral carbonation, and
  • injection into deep saline aquifers (deep saline water-saturated reservoir rocks).

Storage in depleted petroleum reservoirs

The storage of CO2 in depleted petroleum and gas reservoirs is the best known and said to be the least risky of all the disposal options. The re-injection of CO2 into petroleum and or gas reservoirs has been undertaken as part of enhanced petroleum recovery operations for many years. Petroleum reservoirs by their very nature demonstrate that the structure can seal CO2 within a contained geological structure. However, no suitable sites of this nature have yet been identified in NSW.

Injection into uneconomic coal seams.

The injection of CO2 into coal seams may be feasible as part of an enhanced coal seam methane (CSM) recovery project. Coal seams can absorb CO2 and this may achieve permanent disposition provided the coal is not disturbed by mining and does not have fracture pathways to other formations.  Over time there is evidence that in some areas bacteria within the coal seams can convert CO2 into methane using the coal as a source of hydrogen. However, most coal seams are already saturated with either methane, CO2e or a combination of both gases. The injection of CO2 into coal seams could also be used to displace methane rapidly, resulting in enhanced methane recovery.

The total volume of CO2 which can be stored as part of a coal seam methane project is constrained by limited capacity. In addition, many coal seams already contain significant volumes of naturally occurring CO2. Potential is further reduced by the fact that a proportion of the CO2 injected will be reproduced? extracted? during CSM recovery operations. Furthermore, most of the current CSM projects are extracting gas from coal seams that are likely to be mined in the future, thus releasing the injected CO2

Besides these restrictions, there are major technical issues to be overcome, such as the swelling of the coal from the CO2 injection which results in reduced permeability, restricting the injection of gas across the deposit.


The disposal of significant volumes of CO2 into coal seams appears unlikely to play a major role in the sequestration of carbon dioxide in NSW.

Mineral Carbonation

Mineral Carbonation is a process where CO2 is chemically reacted with minerals such as serpentinite to produce stable carbonate minerals, effectively locking up the CO2 permanently. The reaction could occur within an industrial reactor using mined material or in situ by direct injection into serpentinite formations. The Department of Primary Industries advises:

  • There are extensive deposits of serpentinite in Australia;
  • The Great Serpentine Belt near Tamworth contains significant resources of suitable rocks;
  • To date, the rate of reaction in the laboratory has been too sluggish or costly to accommodate industrial CO2 output within industrial reactors;
  • In situ mineral carbonation would operate in all likelihood at much slower reaction rates. Current research is aimed at increasing the speed of the reaction in industrial reactors.
  • This technology appears unlikely to prove efficient or effective in the short to medium term.

Injection of carbon dioxide into deep Saline Aquifers

Disposal into deep saline aquifers involves the injection of CO2 as a super critical fluid into suitable geological formations at depths greater than 800 meters. This is likely to be the best option as deep aquifers have the potential to contain enormous volumes of CO2. It is also likely to be the most suitable disposal option for NSW as a number of NSW basins are likely to contain deep aquifers.

Exploration and Storage Potential in NSW

The lack of significant previous petroleum exploration in NSW has resulted in a lack of knowledge of the geology and hence the storage potential of NSW’ basins. The information that is available suggests that there is potential for geosequestration of carbon dioxide in NSW, however, further work will be required to identify sites which may be suitable for carbon storage.

The identification of suitable sites for sequestration of carbon dioxide, followed by pilot injection projects, is seen as a top priority for NSW.

The scale of any greenhouse benefits will depend to a large extent on whether suitable storage sites are identified and, if so, the storage ‘capacity’ and the proximity of sites to the stationary energy sector’s largest emitters.

Management of livestock emissions

Ruminant methane emissions

Methane collection project

Methane collection project

Methane emissions from ruminant animals, arising through enteric fermentation, comprise 73% of greenhouse gas emissions from the NSW agriculture sector. Sustained fermentation of feed in the rumen is a normal aspect of the digestive function of ruminants, allowing them to obtain energy and nutrients from cellulosic feed. Methanogenic microbes are the single cell organisms responsible for methane generation, which represents digested energy going to waste.

The range of livestock management options to reduce enteric methane emissions depends on how effective abatement is defined. There are a large number of strategies which will reduce the emissions intensity, that is, emissions per unit animal product. Simplistically, any management choice to increase reproductive performance or maximise the rate of product generation (liveweight, milk, wool) will lead to a reduction in the emissions intensity. Consequently, management practices such as strategic supplementation, feedlot finishing, parasite control and culling of barren females are all potential contributors to reducing the emission intensity of enteric methane. This is made evident in the Queensland dairy industry over the past 15 years as industry consolidation and intensification of production has lowered the methane cost of milk production (Howden & Reyenga 1999).

Similarly, system modelling has shown that sowing improved pasture and stocking sustainably can enable lamb enterprises to generate more profit while using less land for grazing and emitting less methane (Alcock & Hegarty 2006). It should be noted that while emissions intensity is reduced by improved management, daily emissions of methane per animal may in some cases be increased so total emissions may increase.

If the mitigation goal is reducing total emissions per day then practical mitigation options are far fewer and can be summarised as follows.

  • Reduction in livestock numbers. This is not popular with the rural sector and can only be made revenue neutral or financially advantageous if the productivity of the remaining animals is improved.
  • Changing diet type from a roughage to a cereal-grain base. While high starch (grain) diets do reduce methane emissions relative to an equal weight of cellulose, the capacity for cattle to eat is often higher in feedlots than when grazing. It should also be remembered that the carbon cost of grain production is far higher than for pasture. This may need to be considered if life-cycle emissions accounting is adopted by agriculture.  In a comparison of life-cycle emissions from grazing versus fully-fed dairy cattle in New Zealand, Van Der Nagel et al. (2003) calculated that a 250 cow herd on pasture would produce 772 t CO2-e/ annum while the same herd fed a mixed ration of cut forage and concentrates produced 2765 t CO2-e / annum. The difference was largely a consequence of soil carbon loss incurred in providing the mixed ration. Life-cycle assessments of diets used in beef feedlots have yet to be made.
  • Genetic improvement of cattle. Cattle selected for improved net (or residual) feed efficiency eat less feed than cohorts growing at the same rate, and so produce less methane (Nkrumah et al. 2006; Hegarty et al, 2007). Recent modelling suggests selection of bulls for this trait within the Australian beef industry will reduce enteric methane emission by over 550,000 t by 2026 (Alford et al. 2006).  Additionally, dairy cattle in NZ bred from European cattle produced more methane per unit feed intake in early lactation than did the locally bred lines, suggesting scope for genetic selection (Robertson & Waghorn 2002).
  • Targeted manipulations of the rumen ecology. There are two strategies being developed to induce low-methane fermentations in livestock.
  1. Dietary additives of short-term effect. There are a number of existing available agents for this purpose including dietary oils, especially coconut oil;  tannins extracted from a  range of sources; and monensin®.  The long term efficacy of these agents has not been established and in the case of coconut oil and propionate precursors, cost may be prohibitive.
  2. Agents achieving long-term rumen ecological change.  None is yet available but possible strategies being researched include: vaccines against rumen methanogens; agents to eliminate rumen ciliate protozoans; and microbial reductive acetogenesis activated in the rumen by probiotic or chemical means.


In summary, while livestock emissions constitute some 13% of Australia’s total greenhouse gas emissions, current practical options to reduce annual emissions without compromising livestock numbers and profitability are few and a commitment to ongoing development is required. The livestock sector will have most flexibility to improve greenhouse efficiency if emissions are defined not as Gg/year, but in relation to animal productivity (gG/t product) describing emissions intensity.

Management of emissions from manure

Though emissions from  manure are a relatively small component of the overall greenhouse gas emissions profile, there are some opportunities for mitigation in manure mangement.  The opportunities are greatest in management of feedlot, piggery and poultry manure, through collection and beneficial use of methane emitted from fermentation. Collected methane may be flared or used beneficially as an energy source.

Soil carbon management

The importance of soil organic carbon as a significant carbon sink is being increasingly recognized in strategies to mitigate climate change. Soil contains huge quantities of carbon, generally around 50 to 300 tonnes per ha, equivalent to 180-1100 t CO2-e. In comparison, above-ground biomass of pastures and crops usually contains 2-20 tonnes C per ha, while plantation forests can accumulate 250 tonnes C per ha. Globally, the soil carbon pool is estimated to hold 2000 Gt of carbon, compared with 500Gt carbon in vegetation (Watson et al. 2000).

Soil organic carbon is derived from plant inputs, especially leaves and fine roots, and plays a fundamental role in the global carbon cycle. The stock of carbon in a soil reflects the balance between the inputs from plant residues and losses due to decomposition, erosion and leaching.

Intensively cropped soils have low organic carbon content, due to disturbance, erosion and regular periods of minimal organic matter input during fallow and in early stages of crop growth. A change in land use from forest or grassland to cropping will, therefore, generally lead to loss of soil carbon, by 50% or more (Guo & Gifford 2003). Cropping soils in Australia have lost a substantial amount of C (estimated at 1050 Mt) following the introduction of intensive cropping (Swift & Skjemstad 1998). Thus, there is significant potential to increase C stocks in these carbon-poor soils by adopting improved land management practices. Small increases in soil C over large areas can significantly mitigate the rising atmospheric concentration of carbon dioxide. Furthermore, in addition to mitigation of greenhouse gas emissions, increasing soil organic matter has a positive impact on soil health, productivity and resilience (Bhupinderpal-Singh et al. 2004; Bhupinderpal-Singh & Rengel 2006; Tisdall & Oades, 1982; Sherwood and Uphoff 2000

Organic matter in soil is made up of several discrete pools that decompose or accumulate at different rates (Buyanovsky et al. 1994; Conteh et al. 1998; Wang et al. 2004). The most labile pool has a rapid turnover rate of 1-5 years, while the most recalcitrant pool, comprised predominantly of charcoal, has a turnover time of tens of thousands of years (Parton et al. 1987). Soil C stock increases in the labile pool are vulnerable to future loss; it is desirable to fix atmospheric C into recalcitrant soil organic matter pools, because of their slower turnover rate

Management practices that can increase soil organic carbon stocks include:

  • Retention of forest slash and crop residues rather than burning to increase organic matter input and protect against erosion of the carbon-rich surface soil (Rasmussen & Parton, 1994; Ayanaba et al. 1976). The effective control of diseases that harbour on crop residues needs to be considered when this practice is adopted.
  • Application of fertiliser to overcome nutrient deficiencies and so enhance plant growth and therefore litter inputs (Johnson 1992; Schroeder 1991; Turner & Lambert 1986; Dalal & Chan 2001). Fertiliser rates and timing should be matched to the requirements of the crop/forest to maximise efficiency of fertiliser use and limit leaching and runoff. However, greenhouse gases are emitted in the manufacture of fertiliser, particularly nitrogen fertilisers (Wood & Cowie 2004), and application of nitrogen fertilisers can cause nitrous oxide emissions (Boeckx & Van Cleemput 2001), so these emissions should be balanced against the soil carbon gain. 
  • Application of organic amendments. Recycled organics such as manures, biosolids, composts and char are likely to be more effective than fresh plant residues in raising soil C because the carbon is present as relatively more recalcitrant forms (Zinati et al. 2001; Lehmann et al. 2006).
  • Selection of cropping, forest or pasture systems to maximise plant growth. Each species has a different carbon allocation strategy that results in a different pattern, rate, quality and quantity of organic carbon input to the soil. Mixed species planting can maximize biomass production where species have facilitative rather than competitive interaction: mixtures including nitrogen-fixing species (e.g. acacia with eucalypts (Bauhus et al. 2000), lupin with pine (Beets & Madgwick 1988), and clover with pasture grasses (Ledgard 1991) commonly produce higher total biomass yields than monocultures of either species. In cropping systems, minimising fallow, and implementation of opportunity cropping will maximise organic input.
  • Minimised cultivation disturbance to reduce mineralisation and erosion losses. Minimising soil disturbance will conserve soil carbon, particularly on erodible soils. Reduced or zero tillage planting techniques increase soil carbon in many cropping systems internationally (eg Lal 1997; Alvarez 2005; Puget & Lal 2005), though in Australia positive impact of minimum tillage on soil carbon has only been found in wetter temperate regions (Dalal & Chan 2001; Heenan et al. 1995; 2004). Site preparation for tree planting commonly involves ripping, often in conjunction with mounding. It may be possible to reduce disturbance without jeopardising growth rate in some soil types. Longer rotations, or coppicing, reduce the frequency of soil disturbance in forest systems and so promote soil carbon.
  • Modification of grazing management to maintain pasture cover. Maintaining pasture cover minimises erosion losses, and maximises organic input to soil.

Many studies in Europe and USA with predominantly cool climate have shown that soil organic C content tends toward a new equilibrium within 20–30 years after a change in management, such as from conventional tillage to no-till (West and Post 2002; Alvarez 2005). However, studies in Australia and Asia in climates ranging from sub-tropical/tropical to semi-arid/arid conditions indicate that longer periods are required (Heenan et al. 1995; 2004; Wang et al. 2004; Yadvinder-Singh et al. 2005). This inconsistency in the rate of soil C stabilisation probably results from the interacting effects of climate, local edaphic conditions and crop management on rate of plant growth and heterotrophic respiration (Franzluebbers & Steiner 2002; Chan et al 2003; Wang et al. 2004; Alvarez 2005). Long-term studies are critical for determining the impact of farming practices on dynamics of soil organic matter and associated soil properties (Chan et al. 2003).

Land use and management practices that sequester soil carbon can impact on emissions of the greenhouse gases N2O and CH4, and the interactions between these gases and carbon balance can be complex (Tang et al. 2006). For example, if nitrogen-based inorganic fertilizers and/or organic amendments are applied to enhance plant growth, this may lead to carbon sequestration in vegetation and soil, but such benefits could be partially or completely offset by increased emissions of N2O (Dalal et al. 2003). In addition, higher rates of N application may suppress oxidation of CH4 by soil methanotrophs, especially in aerobic soils (Bodelier & Laanbroek 2004), further reducing the net mitigation benefit.
In general, CH4 oxidation rates are greater in forest soils than in tilled agricultural soils (Suwanwaree & Robertson 2005). However, disturbance during site preparation and harvesting/logging operations may accelerate mineralization of soil organic matter and release of inorganic N, and inhibit  methanotrophic activity (Hütsch 1998; Pu et al. 2001). This may temporarily convert plantation lands into a significant source of carbon dioxide and N2O and may reduce CH4 sink capacity of soil. These complex interactions must be considered in accounting for the net greenhouse impact of mitigation practices in agriculture and forestry.

Although soil carbon management in agricultural systems is not currently recognised as an eligible offset under the NSW Greenhouse Gas Abatement Scheme, it may be included in the proposed National Emissions Trading Scheme. Inclusion of soil carbon  management in any future emissions trading scheme will be dependent on development of cost-effective methods for estimating soil C change under changed land management practices.

Management of Forest and agricultural soil emissions

Soils can be a significant source of nitrous oxide both under anaerobic,  mainly through denitrification, and aerobic conditions mainly through denitrification (Ambus et al. 2006). Nitrogen fertilisers, biological nitrogen fixation by legumes species, and urine and dung of grazing animals are all sources of nitrous oxide emissions. Very few studies of nitrous oxide emissions have been undertaken in Australia (Dalal et al. 2003). However, recent studies by the CRC Greenhouse Accounting have measured N2O emissions from wheat in Victoria and WA, irrigated pasture in Victoria, and irrigated cotton and maize in NSW (eg Barker-Reid et al. 2005; Phillips et al. 2006; Wang et al. 2006), to investigate drivers of N2O emissions in agro-ecosystems (Galbally et al. 2006).

Available estimates of nitrous oxide emissions are highly variable. Until recently, the estimates of nitrous oxide and methane emissions included in Australia’s inventory were calculated using general default emissions factors. The CRC Greenhouse Accounting research mentioned above, on which Australia’s inventory is now based, determined that the nitrous oxide emissions from applied fertiliser were an order of magnitude lower than the IPCC default value for dryland cropping, though emissions from irrigated crops and pastures were several times greater than the default. Accurate data on nitrous oxide emissions from soil are required to devise appropriate global mitigation and adaptation policies.

Similarly, very few studies have measured rates of methane exchange from soils in Australia (Simpson 2005). Globally, soils are an important sink for methane and can consume about 50% of the annual load of methane to the atmosphere (IPCC 2001). Aerobic/well-drained soils are usually a sink for methane due to the high rate of diffusion of methane into such soils and its subsequent oxidation by methanotrophic microorganisms (Simpson 2005). In contrast, large emissions of methane are common where anaerobic conditions are favoured, e.g., wetlands, rice paddies and landfills, due to high activity of methanogenic microorganisms in these environments (Conrad 1989). Reforestation of pasture lands and associated silvicultural practices, such as site preparation, N-fertilisation, burning of slash have the potential to significantly alter rates of soil organic matter mineralisation, nitrification, and carbon dioxide, nitrous oxide and methane fluxes from soil (Dalal et al. 2003; Tang et al. 2006).


Reforestation can contribute to mitigation of greenhouse gas emissions through sequestration of carbon from the atmosphere. A forest sequesters carbon as it grows, until it reaches maturity, after which carbon stock remains essentially constant unless the forest is disturbed, such as by harvest or fire. The sequestration rate of planted forests is dependent on climate, soil factors and forest management (planting configuration, species, stocking rate, establishment methods, fertiliser, weed control). 

Forestry Corporation has developed accurate models of sequestration for its major plantation species, that are used in carbon accounting under the NSW Greenhouse Gas Abatement Scheme.  The Carbon Sequestration Predictor, a simple software tool produced by the former State Forests, NSW Agriculture and Department of Land and Water Conservation, with CRC Greenhouse Accounting, gives estimates of potential sequestration for a range of reforestation types for different rainfall regimes and soil types (Montagu et al. 2003). This tool is specifically developed for lower rainfall regions of NSW (<800mm) where few data are available.

The AGO’s greenhouse accounting model FullCAM (Richards 2001), distributed as NCAT, the National Carbon Accounting Toolbox,  is a sophisticated modelling tool that is used to quantify Australia’s emissions profile for the agriculture, forestry and land use change sector. NCAT can be used to estimate carbon sequestration potential at specific sites.

The annual sequestration rate over the growth phase generally ranges from 8 to 25 t CO2-e.ha-1. A commercial hardwood plantation on the NSW North Coast is likely to sequester 600-1000 t CO2-e.ha-1 by the time it reaches rotation age. The average carbon stock over several rotations, representing the long term net mitigation benefit of the plantation, is about 300-500 t CO2-e.ha-1.

Besides the carbon stock in forest biomass, dynamics of the soil carbon pool influences the mitigation impact of reforestation. Conversion of cropland to forest is likely to increase soil carbon: from their meta-analysis of published literature Guo and Gifford (2002) concluded that, on average, reforestation of cropland increases soil C stock by 18-20%. Conversion from pasture to forest is likely to decrease soil C stock initially, as a result of a decline in pasture litter inputs in the early phase of plantation establishment, especially in fertile pastures with high proportion of labile soil carbon. As the plantation grows, soil carbon is replenished from litter fall and root turnover. In broadleaf forest species, soil C is generally restored to the original stock within 30 years. In contrast, evidence suggests that reforestation with pine species generally leads to a decline in soil carbon stock of around 15%, however this conclusion is based on limited data so needs to be verified (Guo & Gifford 2002; Paul et al. 2002).

There is considerable uncertainty associated with modelled predictions of carbon sequestration, particularly with respect to the soil carbon pool. This uncertainty will be reduced by research that measures the actual rates of sequestration and produces data that can be used to improve prediction models. Due to impacts of temporal and spatial climate variability, spatial heterogeneity in edaphic factors, and variable incidence of pests, disease and fire, there will always be uncertainty in estimating the sequestration potential of forests.

Besides mitigation of climate change, further environmental benefits of reforestation can include enhancement of biodiversity, improvement in stream water quality through reduction in nutrient runoff and soil erosion, and mitigation of dryland salinity. Strategically siting reforestation in areas of high salt export can reduce stream salinity (eg Ellis et al. 2006).

Role of forest products

It has been increasingly acknowledged that wood products can significantly extend the carbon sequestration benefits provided by forests (Skog & Nicholson 1998; UNFCCC 2003).  In addition to the physical storage of carbon in wood products (both in service and in landfills), further greenhouse benefits can be obtained through the use of processing residues to generate energy in lieu of fossil fuels, and through the use of wood products instead of more energy-intensive materials (Ximenes 2006). Wood products play an important role in Australia’s carbon balance. The accumulated carbon stock in wood products in Australia (in service and in landfills) is approximately 230 million tonnes of carbon (AGO 2006d), which is equivalent to approximately 1.5 times Australia’s annual greenhouse gas emissions. 

New South Wales is the main producer of both sawn softwood (790,000 m3) and sawn hardwood (316,000 m3) in Australia (ABARE 2005). Approximately 75% of the sawn timber is used for residential purposes (BIS-Shrapnel 2000), with about 80% of the sawn pine used for framing applications in houses and approximately 50% of the sawn hardwood used as sub-flooring and fencing (Ximenes 2005). Depending on the type of product manufactured and of the disposal method used at the end of its service life, the carbon will remain “locked up” in the product for many decades (eg Gardner et al 2002.).

Figure 19. Life cycle of carbon in wood products

Research by the CRC Greenhouse Accounting suggested that up to 70% of the carbon in harvested logs can be considered to be permanently stored – either directly in the wood products, including storage in landfill after disposal of redundant wood products, or through use for bioenergy, displacing emissions from fossil fuels. Thus, for a plantation with carbon stock at harvest of 375 t CO2-e.ha-1, 300 t CO2-e.ha 1would be in the above ground components, including 250 t CO2-e.ha-1 in the stem. Of this latter amount 175 t CO2-e.ha-1 would be permanently stored at each harvest. After three rotations, the value of carbon stored in wood products or through avoided fossil fuel use will be 525 t CO2-e.ha-1, compared with the carbon storage in the forest of 375 CO2-e.ha-1.

Plant breeding

Perennial grasses

NSW lacks persistent improved grasses in low rainfall areas. A more comprehensive suite of grasses are needed to cope with increasing climate variability and predictions that rainfall will decline in many of our agricultural regions with climate change. Native grasses have promise but have problems with seed harvesting and establishment that is not an issue for species such as phalaris, cocksfoot and fescue. There is significant potential to extend the drought tolerant fescue, cocksfoot and phalaris breeding programs through accessing and improving Hispanic and Moroccan summer dormant germplasm. A renewed commitment for continuation of tall fescue and cocksfoot breeding for medium to low rainfall areas is required. Despite a substantial evaluation effort over the past 15 years, there still remain a range of accessions from the Mediterranean to be screened. There are also a number of molecular breeding opportunities particularly with tall fescue. 

For temperate grasses, periodic drought and encroaching climate warming will increasingly threaten plant persistence.  It is therefore necessary to investigate the mechanisms and strategies of drought response of prominent improved grasses like tall fescue and to identify adaptive metabolic processes which might be exploited in plant breeding for persistence.  The focus should be on water soluble carbohydrates, in particular, fructans.  Fructan is the major form of stored carbohydrate in many C3 grasses including tall fescue. An important role of fructan synthesis in C3 grasses maybe to regulate osmotic potential during moisture stress. In addition water soluble carbohydrate reserves are considered to be a primary source of carbon for regrowth after defoliation or when a stress is relieved.  The accumulation of high molecular weight fructans in tiller bases has been positively correlated with drought survival and regrowth after drought in perennial ryegrass in Mediterranean environments. Water soluble carbohydrates and fructans in tall fescue have not been fully researched in Australia.  A better understanding of their influence on drought tolerance will have the potential to select tall fescue material with superior persistence and production to existing cultivars for lower rainfall areas.  If the traits associated with increased drought tolerance are under the control of major genes this would provide the potential for marker assisted selection for persistence.  The objective of this work will be to examine the role of water soluble carbohydrates and fructans in drought survival of tall fescue by comparing a diverse germplasm collection that is likely to exhibit different strategies of response to droughts. 
For tropical grasses, there is a lot of potential for improvement of the cool season performance of a number of species not only for the NSW slopes and plains but also for marginal tablelands country.  The tropicals will have a number of advantages if the trend to hotter & drier weather continues as they can grow at higher temps and are very deep rooted to access water.  There are however some management issues such as establishment, companion legumes and quality.  On the molecular breeding front there may be potential to identify markers which will eventually be used to improve the frost tolerance and adaptive potential of  tropical grasses for NSW.

Bioenergy options

Energy production and consumption releases large quantities of carbon dioxide. Australia’s consumption of energy has more than doubled between 1974 and 2004 (from 2 695 PJ to 5 525 PJ).  Per capita, Australia is one of the largest consumers of primary energy, ranked 9th in the world (ABARE 2005) with current growth in energy consumption around 1.9% per annum (ABARE 2006). Australia is a net energy exporter with the total energy produced in Australia during 2004-05 estimated at 17 524 PJ (ABS 2006). Coal accounted for just over half of Australia’s energy production (8 765 PJ).

Renewable energy accounted for around 5% of Australia’s total stationary energy production in 2004-05 (265 PJ) (ABARE 2006). Biomass is the major source of renewable stationary energy, most of which is utilised in sugar mills and saw mills to provide heat. 

Hydro is the largest source of renewable electrical energy in Australia, but growth of renewable capacity is currently focussed on wind and biomass sources in particular (ABARE 2006). Within NSW approximately 90% of electricity is currently generated from coal, but a mandatory target of 15% renewable electricity by 2020 has recently been adopted (DEUS 2006). Electricity generation from biomass could contribute to this target, but significant market and technological development is required to meet this  opportunity. NSW experience in biomass energy applications includes installation of high-efficiency boilers in sugar mills to generate electricity from bagasse, and demonstration of co-firing wood waste with coal at several large coal-fired power stations.

Biomass for combustion applications can be supplied from harvest and processing residues from forest and agricultural industries, and from purpose-grown crops. A similar range of potential biomass feedstocks could be utilised to produce liquid biofuels.

The most common biofuels are ethanol, produced by fermentation from sugar and starch crops, and biodiesel produced from waste cooking oil, tallow and oilseed crops. Production of ethanol from ligno-cellulosic feedstocks has not been economically viable to date, but recent developments have greatly improved prospects for this technology.  The increased cost of fossil fuels for transport as well as environmental concerns, including health and climate change  and concerns for security of energy supply, have increased interest in biofuels. In 2004-5 NSW consumed 6 250 ML of petrol and 3 450 ML of diesel . A Taskforce has been established by the NSW Government to investigate the opportunities and issues associated with mandating a 10% ethanol blend. The Premier recently announced that a 2% volumetric mandate will come into force in September 2007 with the Taskforce to further consider implications in increasing the mandate to 10% by 2011. Some basic considerations for agriculture in meeting the demand generated by this mandate include:

  1. capacity to produce feedstock;
  2. sustainability and resilience of production systems;
  3. energy balance of production systems;
  4. impact of new markets on existing industries (e.g., grain use by intensive industries);
  5. development of technology for “second generation” biofuel systems that will deliver greater energy efficiency and greenhouse gas mitigation, and will not compete directly with food supplies.

Significant research and policy work is required to ensure that bioenergy systems deliver substantial greenhouse gas mitigation impacts. Confirmation of beneficial greenhouse outcomes will increase consumer acceptance, increasing market potential.

The benefit of a bioenergy system is sometimes expressed in terms of energy output relative to energy input, or greenhouse gas emissions per unit energy output. However, the most appropriate measure of greenhouse mitigation benefit is the emissions reduction of the bioenergy system with respect to the fossil fuel system that is displaced (Schlamadinger et al. 1997). The benefit is dependent on the feedstock (e.g., use of wood residues or wastes from processing yield more positive greenhouse and energy balance outcomes than use of purpose-grown crops ), and the energy conversion process (e.g., fermentation, pyrolysis, gasification).Various studies have calculated a wide range of values ranging from low, and even negative, mitigation benefit through to strong positive values. For example, Pimental (2001) argues that there is more energy consumed than produced in production of ethanol from maize in the USA. This is rebutted by Graboski & McClelland (2002) and Hill et al. (2006). Much of the variation is due to inconsistent application of Life Cycle Assessment (LCA) methodology; the analysis is strongly influenced by determination of the system boundaries. LCA should be conducted in accordance with the International Standards Organisation series 14040 (Life Cycle Analysis). Specific guidance on the application of the life cycle approach to calculation of greenhouse gas balance is available from Schlamadinger et al. (1997). To allow for comparison of the respective fossil and biofuel systems it is important that ‘upstream’ emissions are included.
Upstream (or pre-combustion) emissions are produced during the fuel's:
• extraction (e.g., removal from oil fields);
• production (e.g., cultivation and harvest of biomass);
• transport of crude oil/biomass to the respective conversion facility (e.g. by ship, rail, road or pipeline);
• processing and conversion of the oil/biomass to a finished fuel (e.g. with energy from coal, gas or co-generation);
• distribution to retail stations or bulk wholesale uses.
There are few detailed LCA reports available for Australian bioenergy systems.  The most comprehensive work on biofuels in Australia has been undertaken by CSIRO (Beer et al. 2002 and 2004). There is a clear need for Australian research to assess the performance of bioenergy systems under local conditions and agronomic systems.

Generally, the production of biofuels from annual crops (e.g., corn, wheat, sugarcane), with associated high-intensity of production, will have a marginal environmental benefit compared to biofuel production from woody and grass (lignocellulosic) production systems, which have higher efficiency and energy yields. Reported net energy balance for corn to ethanol usually shows that around 10 – 25 % more energy is produced than is invested (IEA 2007); for biodiesel from oilseeds this figure is 70 – 90 % (Hill et al., 2006) while for lignocellulosics, a range from 200 to 600+ %  has been suggested (UNFCCC 2006a).  Notable omissions include Australia and the United States of America. (Both countries have signed the protocol, but it is the ratification process that makes the protocol legally-binding.) Although Australia has not ratified the protocol, the Commonwealth Government has expressed the intention to meet the 108% target, and current projections indicate emissions of 109% compared with 1990 during the commitment period (2008-2012) (AGO, 2006b).The Protocol addresses emissions of six greenhouse gases: carbon dioxide, methane, nitrous oxide, sulphur hexafluoride, perfluorocarbons and hydrofluorocarbons. Aspects of the Kyoto Protocol that are relevant to primary industries include:

  • Article 3.3, which allows certain forestry activities—afforestation and reforestation since 1990 on land that was previously cleared—to be considered toward a Party’s emissions reduction commitments. The growth increment of eligible forests during the Commitment Period (2008-2012) creates ‘Removal Units’ that can offset an equivalent amount of fossil fuel emissions. Carbon stock change during the commitment period resulting from deforestation since 1990 is counted as an emission.
  • Article 3.4, which allows Parties the option to include in their accounting additional sequestration in plants and soil, through management of cropland, grazing land and existing forests, and revegetation. Australia has agreed to a zero cap on credits from forest management, and to exclude all “Article 3.4 activities” from accounting.
  • Article 3.7, which states that for Parties for which land-use change and forestry was a net source of greenhouse gas emissions in 1990, the emissions from land-use change can be included in calculating the 1990 baseline. Because this clause applies to Australia, the emissions from deforestation in 1990 are included in Australia’s baseline. 
  • Article 6, which allows an  Annex 1 party to implement emissions reduction projects in another Annex 1 country, and count the resulting ‘Emission Reduction Units’ against its own target. This is known as the ‘Joint Implementation’ mechanism. 
  • Article 12, which defines the Clean Development Mechanism, through which Parties to the protocol can obtain ‘Certified Emission Reductions’ from emissions reduction projects implemented in non-Annex 1 (developing) countries.
  • Article 17, which allows for emission trading between Parties that have ratified the Protocol.

The Parties to the Protocol have agreed that a second commitment period should commence after 2012. Details of targets and the accounting framework for the second commitment period will be negotiated over the next few years.

The features of the Kyoto Protocol, including the accounting framework and rules governing inclusion of sequestration activities and methods for estimation of emissions and removals, have had and will continue to have a strong influence over NSW policies and future emission trading schemes.  It is likely that some of these details will be revised for the new commitment period.  It is important that Australian policies are compatible with international initiatives developed under the UNFCCC and Kyoto Protocol so that Australia has the option to participate in future.

There is growing consensus that it is critical to stabilise atmospheric carbon dioxide at 550 ppm or less to avoid catastrophic impacts.  At 550 ppm, global average temperature is predicted to rise by 2 C. To achieve stabilisation at 550 ppm will require the developed countries to reduce their emissions by 60% below 1990 levels by 2050. This aspirational goal is beginning to be reflected in policy development in some jurisdictions in Australia, and internationally.

Asia-Pacific Partnership

The Australian government, along with the United States, initiated the Asia Pacific Partnership on Clean Development and Climate, known as AP6.

The six-country Partnership which also includes China, Japan, India and Korea, brings together major emitters amongst the developed and developing countries, in recognition of the long term commitments and significant investments required to tackle the sustainable generation and use of energy. The partnership focuses on the acceleration of technology, especially low emissions technology, and collaboration between governments, business and research organisations to foster innovation and to implement practical, achievable, economically sustainable solutions to climate change.  The partner countries believe these focus areas are essential to a sustainable solution to climate change.

The Asia-Pacific Partnership has established 8 public-private task forces to examine cleaner fossil energy, renewable energy, power generation and transmission, aluminium, building and appliances, cement, coal mining and steel.  Australia leads the task force on coal mining. Each task force has developed an Action Plan describing the project activities that will be undertaken.

National policy response

Government has available a range of policy responses to address climate change, and provide incentives for implementation of available mitigation measures. These include providing direct or indirect incentives/disincentives (eg subsidies, penalties, taxes, education programs, research funding, market-based mechanisms).  All levels of government are examining available options.
The Australian government has implemented a wide range of policies and programs aimed at reducing Australia’s greenhouse gas emissions. Measures ranging from scientific research, industry development support, pilot scale demonstrations and abatement projects, to education and strategic policy support have been implemented at a cost of over $2 billion. Major initiatives of relevance to the primary industries sector include:
• Establishment of the Australian Greenhouse Office;
• Investment of $40m  to develop the National Carbon Accounting System, used to estimate emissions from agriculture and forestry;
• $100 million Renewable Energy Development Initiative;
• Greenhouse Gas Abatement Program, to support activities that will give substantial abatement during the period 2008-2012;
• $500 million for the Low Emissions Technology Demonstration Fund to support industry-led projects to demonstrate low emissions technologies that have large potential to lower Australia’s future emissions;
• Greenhouse Challenge Plus, which encourages emissions reduction by industry and includes the Greenhouse Friendly program of product certification;
• Mandatory Renewable Energy Target, to achieve a 95000GWh increase in electricity from renewable sources by 2010;
• Biofuels Initiative, which has set a target of 350m litres of biofuels to be marketed by 2010.

National actions by the Commonwealth in conjunction with State governments, agencies and industry include:
• CRC for Greenhouse Accounting (finished 2006); CRC for Coal in Sustainable Development; CRC Greenhouse Gas Technologies; CRC for clean power from Lignite (Finished 2006)
• Council of Australian Governments (CoAG): The CoAG Climate Change Group (CCCG) was established following its 10 February 2006 meeting to implement the Plan of Collaborative Action on Climate Change.  This group interacts with the work of the Natural Resource Management Ministerial Council, which has directed working groups to draft a set of National Action pans for biodiversity, agriculture and marine ecosystems.  (See for more details)

The policies and measures implemented by the Commonwealth, State, Territory and Local governments are impacting on emissions. It is estimated that these programs will reduce national emissions in 2010 by 87 Mt CO2-e  (AGO, 2006b), and that, in the absence of these programs, “business as usual” emissions would be 125% of 1990 emissions by 2010.

NSW Policy response

The greenhouse policy measures implemented by the NSW Government are listed in Appendix 1 of the report Climate Change Research Priorities for NSW Primary Industries.

Major initiatives are:

  • Carbon rights legislation: The NSW Government introduced the world’s first carbon rights legislation in 1998 recognising carbon sequestration in forests, and allowing the separate ownership, sale, and management of these carbon rights.
  • The Greenhouse Gas Abatement Scheme: GGAS was the first mandatory emissions trading scheme in the world (see Emissions Trading, below)
  • The Greenhouse Plan, with $24m over 4 years for the Greenhouse Innovation Fund which provides funding for initiatives under the Climate Change Awareness Program, Climate Action Grants Program, Climate Change Impacts and Adaptation Research Program, Climate Change Adaptation Capacity Building Program, and Greenhouse Gas Emission Reduction Projects Program.
  • The NSW State Plan: The Environment for Living section of the State Plan, Priority E3 “Cleaner air and progress on greenhouse gas reductions” has a target to cut greenhouse gas emissions by 60% by 2050. Priority E2 “A reliable electricity supply with increased use of renewable energy” includes a target of 15% renewable electrical energy by 2020.

Emissions trading

Emissions trading creates a market mechanism to shift the price burden of emissions reduction to those activities that can achieve mitigation at lowest cost. Thus emissions trading is a cost-effective mechanism for encouraging industry to reduce greenhouse gas emissions.

The success of emissions trading in reducing emissions is dependent on establishing a target for emissions at a level that achieves the mitigation required, sharing liability amongst the emitters, and enforcing compliance.

A greenhouse gas emissions trading scheme may include credits generated by mitigation activities in the forestry and agriculture sector, such as carbon sequestration in biomass and soil.  Appendix 2 describes emissions trading schemes operating internationally and in Australia.

The Kyoto Protocol created a market for greenhouse gas mitigation by allowing parties to trade credits in order to meet their targets. Credits can be generated by abatement activities, or by sequestration activities that offset emissions. The Protocol recognises sequestration activities in the agricultural and forestry sector as legitimate offsets that can contribute to meeting the urgent need to reduce GHG emissions.

New South Wales Greenhouse Gas Abatement Scheme

The NSW Greenhouse Gas Abatement Scheme (GGAS), which commenced on 1 January 2003, aims to reduce greenhouse gas emissions from electricity generation. The GGAS imposes mandatory emission limits on all NSW electricity retailers and some large electricity users known collectively as the “benchmark participants”. The scheme aims to reduce per capita emissions to 5% below 1990 levels by 2007. The scheme has recently been extended to 2020. 

To meet targets, benchmark participants offset excess emissions through surrender of NSW Greenhouse Abatement Certificates (NGACs), which may be created through low emissions intensity electricity generation, demand side abatement, and carbon sequestration in eligible forestry activities.

Eligible forestry activities are afforestation and reforestation of land in NSW that was cleared before 1990. Forest owners must meet strict requirements for documentation of inventory methods and forest management, and record keeping. Regular monitoring is required and projects are independently verified by registered auditors. 

Five entities are currently accredited to generate certificates from forest projects: Forestry Corporation, CO2 Australia, Australian Forest Corporation, Go-Gen Australia and Mallee Carbon. Forestry Corporation was the first entity to complete the audit process and commence trading: the first trade of forest NGACs took place between Forestry Corporation and Energy Australia in March 2005.

Proposed National Greenhouse Gas Emissions Trading Scheme

In January 2004, First Ministers of State and Territory Governments established a working group of senior officials (subsequently named the National Emissions Trading Taskforce, NETT) to develop a model for a national emissions trading scheme (NETT 2006).

The taskforce released a discussion paper on 16 August 2006 outlining a proposal for a National Emission Trading Scheme (NETS).  The discussion paper argues that emissions trading is a practical, flexible and cost-effective means of achieving an emissions target, particularly for the energy sector.  The comment period on the discussion paper closed in December 2006.

The essential elements of the proposed scheme are that:
• emissions are capped at a specified level in each period,
• permits to emit greenhouse gases are issued for each period,
• there is a penalty for non-compliance which underpins a value for emissions, and
• participants can trade these permits among themselves (NETT 2006).

The price of permits will not be not set by governments – rather, it will emerge from the market, subject to any upper limit set by governments to constrain economic impacts.  Firms are likely to be willing to pay for permits if their internal costs of abatement are higher than the price of permits.  Firms would be willing to sell permits if the revenue received from selling permits exceeds the profits from using the permits.

The proposed scheme aims to deliver environmental integrity, investor certainty, minimal impact upon the economy, minimal increase in electricity charges to consumers, flexibility and equity.

Initially, the proposed scheme will be limited to electricity generation, with other sectors to be considered in the first review period.  Permits are to be made available to liable parties through a combination of direct allocation and auctioning. To reduce the financial burden on energy intensive industries, and minimise the pressure to relocate off-shore, permits will also be allocated to trade-exposed energy intensive industries. The proposed scheme will allow offset projects to generate credits.  Offsets proposed for inclusion from the commencement of the scheme are reforestation, carbon capture and storage, management of emissions from industrial processes and management of methane from waste. Management of cropping and grazing lands, forest management, and revegetation are proposed as areas for inclusion in future.

It is argued that an emissions trading scheme will make renewable and clean coal technologies economically viable and price competitive. Inclusion of forest and agricultural management as eligible offsets will provide an incentive for reforestation and encourage agricultural practices that have mitigation benefits.

Prime Ministerial Task Group on Emissions Trading

In December 2006 the Prime Minister established a government-industry task group to “advise on the nature and design of a workable global emissions trading system in which Australia would be able to participate”. The report of the task group was delivered on 31 May 2007, recommending that Australia introduce a cap and trade system by 2012. It recommends that the agriculture and land use sector be excluded initially, until “practical issues are resolved”.