AS many as 25 percent of Australia's cattle producers could be forced out of business by 2030 if agriculture is included in the Federal Government's Carbon Pollution Reduction Scheme (CPRS) and subjected to an annual carbon permit system.
That's among the worst-case scenarios respected Central Queensland University resource economist Professor John Rolfe has concluded as part of his extensive research into the issue.
Prof Rolfe, who is also a beef producer, has undertaken some serious number-crunching using calculated emissions from grassfed cattle operations into how an annual carbon permit system in the CPRS would impact specifically on beef producers.
While the Federal Government won't make a decision until 2013 as to whether agriculture will be included in the CPRS from 2015, Prof Rolfe warns it's a deadline looming all too close.
And the agriculture sector will need strong leadership if it wants to negotiate affordable solutions to a high-cost carbon permit system, Prof Rolfe said.
Prof Rolfe said current science indicated methane from beef cattle accounted for about seven percent of Australia's greenhouse emissions, with adult cattle emitting about 74kg/year of methane, while dairy cows emit about 115kg/year and sheep 6.6kg/year.
As a case study, he said a Central Queensland cattle enterprise running 1000 breeders and 850 calves would emit about 134 tonnes of methane a year, which is the same as 2817 tonnes of carbon dioxide.
Based on an initial introductory annual carbon permit cost of $10/tonne, buying a permit in the first year would cost such an enterprise $30,000.
With estimates for the full commercial costs of permits rising from $80/t through to $200/t, it would render many beef operations unviable.
Prof Rolfe said agriculture needed to get on the front foot and start addressing the political and public relations challenges it could face as the 2013 deadline approached, if it wanted to have the power to negotiate on the issue. "I think there has to be an early and a long discussion with the government about agriculture's involvement in a CPRS," Prof Rolfe said.
"I think that's one of the key messages for the agricultural sector. If they don't do anything, political and public relations problems are going to ambush them.
"So I think the industry has to be quite proactive in trying to first of all get some accurate data and present that information, as well as improving feed efficiencies and reducing methane emissions per kg of beef.
"I'm an economist but the real work has to occur with the scientists, and there needs to be a push to ensure there's research and development in the longer-term.
"There's no doubt the way it is at the moment, agriculture is a very uncomfortable fit with the CPRS.
"I think we need people to be sophisticated enough to explain to government what's needed in terms of better measurement of methane and non-inclusion of agriculture until there are some viable options for people to reduce emissions.
"One of the other big problems with including methane in a CPRS is that the simple way to do it is include it on a per head or per kg of meat basis, and basically apply it at the meatworks, and that's not a good idea because you can't tell how much methane each animal has produced in its lifetime, so there is absolutely no incentive for graziers under that sort of system to reduce their methane emissions.
"Essentially the technology to estimate methane emissions accurately and to come up with any potential reductions just isn't there at the moment.
"The best options in the longer term to reduce methane emissions would be either some sort of chemical or feed additive which would be good for feedlots, but hard to apply in the paddock, or genetic modification to improve feed efficiency.
"When you produce methane in the rumen of an animal you've got all these different bacteria which break down the plant fibre and produce something the animal can then absorb.
"There are different types of bugs and some animals are more prone to having them than others.
"The beauty about the genetic modification is that you lose less energy from the beast and increase animal performance at the same time as reducing methane emissions."
Prof Rolfe said including agriculture in the CPRS and subjecting producers to a permit system would be devastating to the beef industry.
"The rough rule of thumb is 25pc of beef producers would go out of business - it would hurt and it would probably only be the larger, more efficient producers who would be able to stay in business.
"It would also hurt in particular northern Australian beef producers because they have higher methane emissions per kg of beef than that found in southern Australia.
"There's a different grass type in northern Australia, C4 grasses, compared to C3 grasses in southern Australia and C4 grasses are less digestable. There's about a 13pc difference in digestability.
"The second reason is that animals grow a lot slower because of heat and climate. They waste a lot of energy just carting themselves around, so they have to eat a lot more grass just to produce each kg of beef."
Prof Rolfe said he predicted agriculture faced two big political pressures in the next few years as the start of a CPRS approached.
"The first is from other industry. If you're an electricity generator in the CPRS and it's costing you a bucketload of money, you'd be thinking the best way to share this load would be to get as many groups involved and to get agriculture involved would reduce the average carbon price by 10pc to 15pc. That's a lot of money, so there will be huge pressure from other industries to get agriculture in.
"The second is from the environmental lobby.
"I can see the beginning of an environmental campaign saying that beef is really bad for the environment and it's starting to get out into more mainstream literature.
"The problem for the beef industry is that even if they have a successful argument, the public relations problem is quite a big one, so that's where I think agriculture needs to become a bit more involved and look for some of the better news stories out there."
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