Climate Change Economics Agricultural Implications

Question: Discuss about theClimate Change Economicsfor Agricultural Implications. Answer: Introduction The change in the statistical distribution of weather patterns on global or regional dimensions when that change lasts for a prolonged period. It is a long term alteration in the worlds climate, particularly changes that are mainly caused by increasing average temperatures of the atmosphere. Alterations in the average weather conditions or variations of weather for a long time. The main causes of climate change include biotic processes, solar radiation variations received by earth, volcanic eruptions, and plate tectonics. Furthermore, human activities are also another major cause of climate change (Piao, et al., 2010). The effects of the changing climatic conditions are significantly real and thus governments as well as private sector from across the world are working to come with means and ways of containing the effects of climate change. Impacts of climate change have virtually affected all sectors of human life, including food manufacturing, agriculture, mining, forestry, banking, agriculture, tourism, and governance (Tang, et al., 2010). Given this understanding, the Australian government introduced various measures to mitigate causes of climate change: the Carbon Tax Act 2012 was specifically introduced to minimize greenhouse gas emissions together with tackling serious climate change impacts on the environment (Tang, et al., 2010). Furthermore, The Coalition Government came up with a Direct Action Plan to substitute the Carbon Tax with a singular objective of achieving greenhouse gas emission mitigation. This paper is a report that compares Direct Action Plan and Carbon Tax policies while evaluating the likely impacts that both policies have on Australias Agricultural sector. In this regard, the report describes the predicted climate change impacts on the agricultural sector, the rational as well as the theoretical underpinnings of a Carbon Tax as compared to a Direct Action Plan. Similarly, the report will identify various opportunities and risks for the Australian agricultural sector, and outlines appropriate ada ptive strategies. Predicted Effects of the Changing Climate on Agriculture The agricultural sector from across the world is one of the worst hit sectors by the impacts of the changing climate and thus the Australian agricultural sector is not an exception. The predicted agricultural impacts related to climate change include: declining crop yields (Sumner, et al., 2011). This trend is projected to continue with the ever-increasing global atmospheric temperatures. Accordingly, the crops that are expected to be worst hit are mainly staples such as maize, rice, and wheat. In accordance with this, price volatility for agricultural commodities is highly anticipated coupled with reduced food quality due to the changing climate (Intergovernmental Panel on Climate Change, 2014). Another key projected impact is that farmers are expected to adapt to some weather changes, however they will be limited what can be managed. It is highly projected that farmers adaptive strategies will be surpassed in areas closer to the equator when there is a 30C or more rise in temperature. Consequently, the interests of the Australian agricultural industry own interests are significantly served by its determined strategies to adaptation as well as decreasing the greenhouse emissions (Intergovernmental Panel on Climate Change, 2014). Food quality will be affected by the changing climate; growing barley, wheat or potato in regions with high carbon concentration has the effect of reducing protein content for approximately 10-14% (Wheeler Von Braun, 2013). Furthermore, some food crops may exhibit significant decline in micronutrients as well as minerals concentrations. In the same line of deliberation, an increase in pests and diseases are anticipated due to the changing climate. For instance, rising land temperatures, precipitation pattern changes together with increased intensity and frequency of acute heat weakens the general pests and diseases regulation whereas the range of pests and diseases are increased. This will ultimately in turn contribute to significant ecosystem services losses while facilitating the dominance of invasive organisms that are damaging (Wheeler Von Braun, 2013). With regard to this, there is a high expectance of increased crop damage by pests and diseases that result into lower food pro duction whereas raising prices of critical food commodities. Livestock are not left out; it is thus expected that with the increasing heat stress together with weather events that are extreme will have impact livestock negatively. For instance, animal varieties bred for high yields are that main culprits given the fact that they are intolerant to heat and poor seasonal nutrition (Scherr, et al., 2012). Additionally, pathogens that are hazardous to reared animals are also predictable to increase their geographical range because of the changing climate. The agricultural labor sector is also expected to fall, specifically the manual labor in humid climates because of vector-borne diseases and heat stress (Scherr, et al., 2012). Carbon Tax and Direct Action Plan Carbon Tax Carbon tax is a levy induced on combustion of fossil fuels, particularly those by manufacturing firms and motor vehicle with a singular objective to reduce carbon dioxide emission into the atmosphere. Basically, it is a levy that a government places a set price on greenhouse gas emissions, and compels the emitting firm to pay (Pannell Roberts, 2010). It is a financial incentive created to make business firms cut on greenhouse gas emissions. The carbon pricing mechanism was mainly geared towards taxing the largest carbon-emitting companies for every tone of carbon emitted; this mechanism created an incentive for these companies to cut on carbon emission and thus culminating into a revenue gain for the environment (Pannell Roberts, 2010). Under Carbon Tax mechanism, when a company cuts its emissions it can trade excess permit to other firms for profit. Furthermore, the manner in which the permits are demanded by the market defines the costs that are put on pollution. Direct Action Plan Carbon Tax policy is majorly associated with raising revenues from around the world; however, the policy has done little in addressing climate change effects on the environment. It is often alluded that carbon tax policy failed to cut on carbon emissions. The coalition government has an ambitious plan for cutting Australias carbon emissions to 5% by 2020 using the Emissions Reduction Fund (ERF). Under the Direct Action Plan, the government has set aside $2.55 billion to pay businesses, local councils, community organisations, and any other member of the society to cut on their carbon emissions (Andrew, et al., 2010). In this regard, for any entity to obtain money the parties interested will have to come up with and register projects and business activities that will significantly reduce their carbon emissions. They will thus take part in a reverse auction, where they can contend against each other to win government contracts as well as secure funding for their projects (Andrew, et al ., 2010). Winners are then paid by the government to implement their carbon emission cutting projects. The coalition government thus believes that the Direct Action Plan is the cheapest way for carbon emissions reduction. Critique of the Two Policies Labor governments carbon tax policy was regarded as the most effective and motivating policy that compelled big carbon emitters to act as opposed to the current direct action plan. Critiques have it that, the government lost its focus on carbon emitters, abandoned renewable energy projects, and does not have a viable urgency to come up with a long-term strategic action to reduce greenhouse gases emissions after scraping the carbon tax policy (Dissou Eyland, 2011). According to the Wsinburne research, the financial pressure that was exerted on companies to take action in managing carbon emissions under Carbon Tax policy was more effective in cutting down the amount of greenhouse gases emitted. The Direct Action Plan works primarily to fund companies to incentivize activities leading to carbon emission reduction does not effectively and efficiently pressure companies to reduce their emissions. In regard to this establishment, direct action plan is ineffective as compared to carbon tax in compelling firms to urgently act on carbon emission together with managing them. The Carbon Tax energized firms to act due to amplified utility prices that significantly increased monetary burden for some firms coupled with such firms being liable under the tax (Bristow, et al., 2010). In this regard, not only did the carbon tax policy create pressure financially, but also a reputable menace for high carbon emitting firms. Repealing of the carbon tax policy by the coalition government has on the other hand caused companies to shift their focus on carbon emission. For instance, some firms have shifted their staff hiring from technical or environmental specialists towards legal staff. This shift is largely attributed to the top managements lack of attention to carbon emission issues and due to financial justification for having individuals dedicated towards tackling emissions have decreased. Furthermore, the Direct Action Plan also caused some companies to postpone or abandon energy management projects after the carbon tax policy was repealed (Bristow, et al., 2010). Risks and Opportunities The changing climatic conditions pose enormous risks for the agricultural sector together with the entire global food security. The recurrence of climatic events that are extreme, including wildfires, heat waves, floods, and droughts are integrating with long term trends such as precipitation patterns changes and rising temperatures have deep and broad effects for the agricultural sector (Lin Li, 2011). The following are major agricultural risks associated with climate change: Risks Declined quality and security of resources for fresh water Decreased yields for especially staples like maize, rice and wheat Increased market volatility and fluctuating prices for agriculturally produced commodities Agricultural crops damages caused by pests and diseases Distortion and destruction to agricultural infrastructure Threat to livestock due to heat stress (Lin Li, 2011). The main opportunities that the agricultural sector is provided with by the changing climate are to be more resilience which requires both mitigation of and adaptation to the effects of the changing climatic conditions (Dudley, 2012). For this reason, players in the food production chain must come up with ways of adapting to some climate change impacts including: improving feeding and dietary additives for livestock, establish agro-forestry systems, replacing fossil fuels by bio-fuels, and improve agronomy, nutrients, and fertilizer management for cereals. Accordingly, the demand side also provides the following opportunities: overconsumption reduction especially in areas where it is rampant, decrease waste and loss of supply chains of food (Dudley, 2012). For livestock, the agricultural sector is provided with an opportunity for rates for match-stocking with production of pasture, adjusting and managing hard and water points, using appropriate breeds or species of livestock, and man aging diet quality for livestock. Accordingly, agricultural policy makers are given an opportunity for risk transfer and sharing mechanism, partnership between public and private finance, environmental services payment, and enhanced pricing of resources (Intergovernmental Panel on Climate Change, 2014). Adaptation Strategies As the climate continues to warm, the agricultural sector needs to come up with strategies that will help in minimizing climate change impacts. For instance, the following strategies are vital in ensuring continuity in agricultural operations: These are key adaptive strategies for resilient, effective and sustainable crop production, including improved knowledge regarding seasons for growing, and improving crop rotation systems (Intergovernmental Panel on Climate Change, 2014). Optimization of crop varieties together with enhanced planning schedules is also critical adaptive measures to increased yields. Accordingly, high temperatures decreases crop yield as well as yield quality; improving heat tolerance for crops will ultimately help in increasing yields in the long-run (Intergovernmental Panel on Climate Change, 2014). Using techniques for water management techniques that are adaptive such as improved storage and access to irrigation water, water systems that are efficient, enhanced irrigation technologies, using effective water harvesting techniques, and agronomy are essential in improving water retention. Accordingly, these strategies complement measures that help in integrating climate forecasts (Intergovernmental Panel on Climate Change, 2014) For livestock adaptation, the following strategies are essential in improving their adaptability to the changing climatic conditions: matching stock rates with pasture production, managing diet quality, and adjusting hard and water management points (Intergovernmental Panel on Climate Change, 2014). Conclusion Climate change is a menace to all sectors of the human living. In this regard, Australia has been on the forefront in coming up with various policies to try and manage climate change. The Labor government for instance, introduced the Carbon Tax policy that was repealed and replaced by the Coalition governments Direct Action Plan. This report using the Australian Agricultural sector has exhaustively described the predicted climate change impacts on agriculture, comparing a carbon tax policy with Direct Action Plan. Furthermore, the report has identified various risks and opportunities for the Australian agricultural sector as well as outlining appropriate adaptation strategies. Bibliography Andrew, J., Kaidonis, M.A. and Andrew, B., 2010. Carbon tax: Challenging neoliberal solutions to climate change. Critical Perspectives on Accounting, 21(7), pp.611-618. Bristow, A.L., Wardman, M., Zanni, A.M. and Chintakayala, P.K., 2010. 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