Reducing livestock to help nations meet emissions targets is in fashion – but WAFarmers CEO Trevor Whittington says an economic principle could keep changes in check
It’s strange to see that Ireland has joined New Zealand, the Netherlands and Canada in announcing plans to enforce cuts in livestock numbers.
The Irish government wants to reduce emissions from farming by a quarter by 2030, with a potential 10 per cent reduction of the national dairy herd one option being considered.
This would mean a cull of up to 65,000 cows a year for three years, at a cost of €200 million (A$330 million) annually.
Last year, New Zealand — which has pledged to reach net-zero carbon dioxide emissions by 2050 — proposed a world-first tax on cow emissions.
The levy will depend on factors including the number of animals kept, the size of the farm, the type of fertiliser used and the steps farmers take to reduce their emissions.
It’s expected to reduce the amount of methane New Zealand’s livestock release into the atmosphere by as much as 47 per cent by 2050.
Some farmers will need to reduce their herds to meet those targets, which many worry could drive them out of business.
New Zealand’s modelling suggests that by 2030, sheep and beef revenue would drop by around 20 per cent — making many farms nonviable.
The Dutch aren’t waiting until 2050. They want to cut livestock numbers by a third, buying out farmers to close production as part of its plan to halve emissions by 2030.
The European Union has come in behind the Dutch with the world’s first carbon import tax – agreeing to tax imports based on the greenhouse gases emitted to make them, and enshrining climate regulation in the rules of global trade.
No doubt the champions of economic suicide here in Australia will be suggesting we follow the EU’s lead and impose our own price on carbon that matches the EU equivalent – four times higher at US$160 per tonne compared to our $38/t.
But they will be ignoring the fact that the vast majority of our primary produce gets exported to countries that are not the slightest bit interested in increasing the cost of food on their consumers, such as China, Indonesia, Egypt or Vietnam.
It’s timely to reflect on what exactly governments think they are saving as they scratch around, trying to find ways to bring their emissions down.
There’s an old economist’s rule called the Jevons Paradox which says that whenever a resource can be used more efficiently – thanks to an invention – higher demand for that resource inevitably follows.
Economist William Stanley Jevons coined that idea back in 1865, just before the start of the second Industrial Revolution but well after James Watt developed his steam engine.
Since Watt’s steam engine, through to the development of combustion engine and then the jet engine, the more efficient an engine is, the more humans make use of it.
Just have a look at our farm tractors. The more efficient the engine, the bigger the tractor becomes and the more uses we find for it.
Farmers are burning more diesel than ever before for each hectare we farm as we run up and back spraying, spading, ripping and spreading; when we once only used to go plowing and harrowing.
The same is true for air conditioning or travelling, the world set a record for coal production last year the more efficient the compressor the more we dial up or down the climate control or travel to new climates for holidays.
Today the Jevons Paradox is known as the Rebound Effect, likely dictating that energy efficiency improvements cannot be counted on to meaning- fully reduce global carbon emissions.
It seems as fast as we develop more efficient engines and build renewables, someone else is building another engine to make the most out of the new efficiency gains.
The consensus that improved energy efficiency will reduce energy use has not stood test of time. In 2022, the world set a new record for coal production, and nearly did so for natural gas, coming in just under the high-water mark set in 2021.
While the production of oil has not yet eclipsed the highs reached at the height of the COVID-19 pandemic, there is a decent chance it will in 2023 and beyond.
And this does not count for the eight billion people who live in the developing world who want what we have got.
Anyone who thinks electric cars will save the environment have not looked at the market potential of the hundred different manufacturers in China making cars that sell for less than $10,000 – which is opening up a vast new market of global buyers – and the emissions that come with them.
While we may think we are saving the environment by buying Teslas and going electric, the rest of the world will be queuing up to replace us as buyers of Middle Eastern oil to fuel all these new affordable vehicles.
The same will happen with our live exports. We congratulate ourselves for exiting the market and those new sheep markets will simply come out of north Africa and the Black Sea.
Maybe the Rebound Effect should be renamed the Delusion Effect as we seem hell bent on deluding ourselves that any changes we introduce will make a difference – either to energy sources or emissions reduction.