CEO comment

By Dan Galligan, CEO CANEGROWERS

ECONOMICS OF CLIMATE

It was way back in 1992 that global leaders gathered at the ‘Earth Summit’ in Rio de Janeiro and established an international treaty to combat ‘dangerous human interference with the climate system.’ Almost three decades later, world leaders are still grappling with the thorny issue of tackling climate change.

More than 200 leaders and an estimated 36,000 delegates are reported to have attended the 26th Climate Change Conference of the Parties (COP26) meeting in Glasgow this month. The gathering was hailed as the most important climate meeting since Paris 2015 – where signatories agreed to keep global warming below 2 degrees.

The goal of COP26 was more ambitious – an agreement to keep any temperature rise to just 1.5 degrees. For that intent to be realised, countries will need to focus not only on achieving net-zero by 2050, but on the steps they’ll take along that path to reach an interim target by 2030. I

n this regard, Australia has been tracking fairly well. We have a national target of a 26-28% reduction by 2030 (set by former Prime Minister Tony Abbott), but we’re actually on track to see a 35% reduction.

For all the politics and posturing associated with the science of climate change, and even more so the associated targets to mitigate its impacts, the economic impact of global commitments is really where most of us will notice the change first. Few occupations in the world could be more attuned to managing climate change than farmers. It is a bread and butter issue for all of us in agriculture.

The emissions reduction targets being hammered out by governments across the world will shift the economic goal posts and, over the short to medium term, will deliver more disruptions than the long-term trends in climate variability.

For 15 years, Australian governments have struggled with climate policy. With our industries entirely trade exposed and large portions of our economy reliant on traditional energy and the mining sector, it’s no wonder the road has been long and difficult.

But while the national debate has raged, the States and Territories have mostly gone their own way. Queensland set a net zero by 2050 emissions target back in 2017. This aligned us with the ACT, New South Wales, South Australia and Victoria, each of which have also committed to the same goal.

We cannot spend any more time debating what path we should be on – we are already on it. Industries such as ours need to be prepared, to understand our exposure, protect the existing rights of growers, and wherever possible deliver some advantages out of what will be a major shift in investment priorities for business and government.

For CANEGROWERS and the Australian sugar industry this is not a new topic. Back in 2007, SRA conducted the first industry Life Cycle Analysis. A body of research that looks to track and measure the carbon emissions from every step of our supply chain. Working with industry last year, SRA recommissioned this work and a new study is currently underway.

When completed in 2022, it will give us the critical data to show how emissions intensive our production systems are and, in so doing, shine a light on to the opportunities that a natural converter of energy like cane production can deliver in carbon capture.

As countries and companies scramble to meet their emissions targets, they will look for partners to build technology or offset their emissions through trading carbon credits.

In theory, farmers have an opportunity to play important role in this process. Being at the table is important. But making sure you have the knowledge and skills to negotiate a good outcome is the perhaps the only way to ensure you’re not on the menu.