3 December 2019 Committee Secretary Standing Committee on Agriculture and Water Resources PO Box 6021 Parliament House CANBERRA Canberra ACT 2600 Submitted via email Dear Committee members, ClimateWorks Australia submission on inquiry into growing Australian agriculture to $100 billion by 2030 ClimateWorks Australia welcomes the opportunity to respond to the inquiry on growing Australian agriculture to $100 billion by 2030. ClimateWorks Australia develops expert, independent solutions to assist the transition to net zero emissions for Australia, South-east Asia and the Pacific. A non-profit organisation, it was co-founded in 2009 by The Myer Foundation and Monash University and works within Monash Sustainable Development Institute. Climate change is one of the many challenges facing Australia’s agricultural sector. The CSIRO considered climate change and other large challenges in its 2019 Australian National Outlook report. This found that without undertaking large-scale shifts, including in the sustainable use of land, Australia risks a future of ‘slow decline’. With action, however, there could be multiple rewards of increased productivity, economic opportunities and for the environment. ClimateWorks is currently working in its Land Use Futures project to quantify the size of these opportunities for Australia. There are significant business opportunities for the Australian agriculture sector in sustainable food and land use There are growing global shifts in investment that rewards sustainable land use. One independent US non-government organisation estimated that the international investment in conservation sustainable agriculture grew eightfold globally in the decade to 2015 - with more than US$8 billion committed from private finance. 1 A landmark global report published in September identified a total of US $4.5 trillion dollar annual global business opportunities by 2030 from making ten global transitions to more sustainable food and land use.2 These business opportunities aim to show the size of the potential benefits to private businesses that support sustainable food and land use, above and beyond the benefits to the overall economy. They include a $440 billion business opportunity in improving rural livelihoods, and $200 billion in opportunity for protecting and restoring nature. It also includes a $530 billion opportunity in productive and regenerative agriculture, which the report defines as systems that ‘combine traditional techniques, such as crop rotation, controlled livestock grazing systems and agroforestry, with advanced precision farming technologies which support more judicious use of inputs including land, water and synthetic and bio-based fertilisers and pesticides.’ ClimateWorks Australia is working with CSIRO, Deakin University and global partners to identify the Australian business opportunities that will come from moving to more sustainable food and land use pathways.3 Based on the global evidence available, it is likely that these will be substantial. Opportunities could include the potential for Australia to take the lead on new technologies that promote sustainability, for instance CSIRO-supported Future Feed is a supplement for cattle that reduces their methane emissions while increasing their production4 These opportunities can contribute to the $100 billion by 2030 ambition. The scope of the $100 billion should include these opportunities, and supporting policies and actions should be implemented to support the sector to capture these opportunities. The Australian agricultural sector can build the resilience of Australia’s natural systems, and include this value in the $100 billion dollar ambition Producers of food, fibre and timber manage more than half of Australia’s landmass,5 and their land management decisions can reduce emissions, sequester carbon in soils, trees and other 1 Hamrick, K., State of Private Investment in Conservation, 2016, https://www.foresttrends.org/publications/state-of-privateinvestment-in-conservation-2016/ 2 Food and Land Use Coalition, Growing Better, September 2019, available at https://www.foodandlandusecoalition.org/global-report/ 3 https://www.climateworksaustralia.org/land-use-futures 4 https://research.csiro.au/futurefeed/ 5 Australian Bureau of Agricultural and Resource Economics and Sciences, ABARES Insights, Issue 1, 2018, http://www.agriculture.gov.au/abares/publications/insights/snapshot-ofaustralian-agriculture 2 vegetation, and protect, restore and build the resilience of natural systems in Australia. The stewardship of these natural systems on private land is valuable and helps to contribute to the health of Australia’s overall economy. It could be recognised by its inclusion, as an explicit estimate, in the $100 billion dollar total. This would more fully recognise the value of farms’ natural capital - that is, the stock of renewable and non-renewable resources on farms, including soil, vegetation, and the carbon stored. Natural capital accounting is an important enabler to help the agricultural sector capture opportunities while maintaining social licence Mainstream economic management has developed mature systems for measuring and valuing human forms of capital. These include rigorous systems and accompanying standards for business-level financial reporting all the way through to national and global economic accounts. These systems enable businesses, investors and policy makers to make informed decisions about financial and economic management. Equivalent systems can be put in place to enable more informed decisions about the environment. Ultimately, this might mean adapting mainstream business accounts to incorporate ‘natural capital accounts’. This could become routine for farming enterprises and other land-based businesses. A range of approaches to measuring and valuing natural capital already exist or are emerging, and land managers could be supported to understand and apply them. Measuring and valuing natural capital can support more informed and adaptive decisions about sustainable land management, policy and investment. Accounting for natural capital on farms can also help build new opportunities, for instance it could unlock premium markets as consumers are able to see how the products they purchase contribute to tangible environmental outcomes. Similarly, better natural capital accounting can help preserve social licence to operate, against risks such as competition for water between irrigators and the environment, and the impact of current farming practices on soil and water resources during droughts. Natural capital accounting can contribute by measuring and reporting on land condition and transparently show the value of farmers’ efforts to improve the environment on the lands they manage. In this way, it could be a valuable opportunity to realise the $100 billion ambition. ClimateWorks has recently published a Natural Capital Roadmap to help illustrate the opportunities and benefits for the Australian land sector of natural capital accounting. 6 6 https://www.climateworksaustralia.org/publication/report/natural-capital-roadmap 3 On behalf of ClimateWorks, I thank you for the opportunity to provide input in response to the inquiry. Please do not hesitate to contact me if you have any further questions. Yours sincerely, Eli Court Program Manager ClimateWorks Australia 4 .