A year on from the launch of the carbon tax, farmers say the policy is significantly increasing their costs, despite evidence that other factors are having a bigger impact on electricity prices.
The tax increased yesterday by 5 per cent to $24.15 a tonne. Many farmers say it’s a cost they’re already feeling through increased electricity prices.
President of the Australian Dairy Farmers, Noel Campbell, believes the carbon tax is pushing up costs for dairy farms by an average of $5,500-$7,000 per year through increased power prices and processing costs.
Mr Campbell says this added cost is making Australian dairy farmers less competitive internationally.
«We’re exposed in exports for 40 per cent of our product,» he said.
«If we’ve got some sort of impact on our costs and they’re not impacted on South American or New Zealand or European costs, it certainly puts us at a disadvantage.»
Energy prices are on the rise, though at different rates across the country. Queensland recently announced increases of 20 per cent for the coming year while NSW will see an increase of less than 2 per cent.
All in all, electricity prices have risen around 80 per cent in the past decade and analysts say the drivers are far more complex than just the carbon tax.
«Most of that has been driven by upgrades in transmission and distribution, rather than the changes in the carbon prices,» said Associate Professor Andrew Macintosh from ANU’s Centre for Climate Law and Policy.
«I would struggle to believe that many farm operators would be able to point to the carbon price and say that it’s had a major impact.
«The negative impact to date has been negligible. The price is simply not large enough and the size of the compensation package was very large, meaning the impact was not really detectable by many businesses.»
Professor Macintosh estimates the overall impact of the carbon price on electricity prices to be no more than 5-10 per cent.
It’s a figure supported by research from the Energy Market Commission, which concludes that the tax has pushed retail prices up by 4 per cent and wholesale electricity prices by 16 per cent. Transmission and distribution costs by contrast make up 38 per cent of electricity price increases.
Emissions from electricity have dropped by 7 per cent since the carbon tax was introduced. Evidence, the government says, that it’s having the desired affect.
But Professor Macintosh says it’s not at all clear that the carbon tax is they key driver in lower electricity emissions.
«There’s been an almost step change in the profile of demand which has been driven by us improving our efficiency,» he said.
There has also been an increase in renewable energy production as Australia looks to generate 20 per cent of its electricity from renewable sources by 2020.
«If you’ve got flat demand and ascribed increases in supply of renewable energy, then by definition the carbon intensity of your emissions is going to decline,» Professor Macintosh said.
The Carbon Farming Initiative has seen some success in reducing agricultural emissions, though not nearly as quickly as most commentators had hoped.
The pork industry has been one of the most rapid adopters of approved CFI methodologies which allow the capture and flaring of methane in pig effluent.
Australian Pork Limited’s environmental manager, Janine Price, says a quarter of the industry is looking to adopt the technology.
«By just covering the ponds, we can reduce our greenhouse gases on farm by 62-80 per cent,» she said.
Ms Price says the ability of pig farmers to generate carbon credits through the scheme cuts the cost of capturing the methane by around a third.
«It’s providing added incentives to the industry to go down this path.»
Reducing refrigerant costs
All fresh produce; dairy, meat, fruit and vegetables naturally require cooling. But the refrigerant gases are often not natural.
These synthetic gases are heavy greenhouse polluters and they also attract a penalty price.
The alternatives are ammonia and simple carbon dioxide, natural gases that don’t attract a penalty, because they are not greenhouse polluting or are neutral.
The association which represents the alternative sector says Australian companies should transfer their cooling systems to natural refrigerant gases.
President of the Australian Refrigeration Association, Tim Edwards, says other countries like China, the US and Europe have moved towards cleaner technology within 15 years.
«The industry is responsible for more than 11 per cent of national greenhouse gas emissions.
«Energy consumption and greenhouse gas emissions can be reduced dramatically.
«If we switch to natural refrigerants, it’s cheaper, and on the way through we’ll also save greenhouse gas emissions.»
China and the US have just agreed to collaborate to phase down HFC refrigerants by 2030.
«Europe will phase down HFCs even earlier.
«The implication is really quite remarkable
«By 2030 you won’t be able to buy a fluoro-carbon refrigerant, so if you’re investing in refrigeration and air conditioning technology, it probably makes sense in investing in natural refrigerant-based technology.»
Vegetable growers still at a disadvantage
Twelve months ago the former climate change minister Greg Combet told vegetable growers they could pass on the cost of the carbon tax onto consumers.
It didn’t go down well, and Ausveg, the grower lobby group, is still angry.
Chairman John Brent says the carbon tax should be abolished.
«As we predicted, the cost is in excess of 10 per cent on electricity for irrigation and refrigeration.
«But the impacts have also flowed through onto costs.»
In another 12 months, if nothing changes, diesel fuel for trucks will attract a 6.8 cent a litre carbon tax too.
The Transport Workers Union says it will cost trucks $200 a week more in fuel. And Mr Brent says that’ll make it more expensive for vegetable growers to send produce to market.
«The first of July 2014, carbon price will apply to on road transport costs, and given the size of Australia, transport is a significant cost, another hit waiting for us down the track.»
Source: ABC.net