Reducing farming system emissions via spatial application of payoff functions

CONTEXT: Government and industry policy in Australia requires Australian agriculture to lessen or offset its emissions over coming decades. OBJECTIVE: This study generates response or payoff functions to identify where cost-effective reduction of emissions via agricultural land use change is most feasible. METHODS: Time series bioeconomic modelling is used to examine the profitability and greenhouse gas emissions of land use sequences at a range of locations across the agricultural region of south-western Australia, a major agricultural region of Australia. RESULTS AND CONCLUSIONS: Modelling reveals crop dominant land use sequences are most profitable in the northern parts of the study region, whereas in southerly parts of the region, land sequences dominated by pasture-based sheep production are most profitable. However, at a handful of locations, many affected by frost, no strong profit preference for either crop or pasture dominant land use sequences is apparent. Most southerly locations generate high rates of scope 1 emissions for each additional percentage increase in land use allocated to pasture production. By contrast, in northerly or drier environments, rates of scope 1 emissions for additional land allocations to pasture are often under half those observed in higher rainfall southerly locations. Lessening emissions by reducing land use for sheep production is most feasible in the northern parts of the region where land use sequences favour cropping. Further emphasis on cropping in land use sequences, however, will increase farmers' variability of returns. In locations where no strong profit preference for either crop or pasture dominant land use sequences occurs, then small financial incentives or creation of media and social campaigns to support lower emission land use sequences may be sufficient to trigger environmentally beneficial land use change. Modelling results reveal priority actions for research and innovation. Manufacturing low emission fertilisers is a priority for cropping enterprises and will greatly assist emission reductions, especially in the crop dominant land use sequences in the northern and drier parts of the region. Varietal improvement and creation of anti-methanogenic feeds or technologies to capture in situ methane released by grazing or enclosed sheep flocks are investment priorities for locations in the higher rainfall, more southerly parts of the region. SIGNIFICANCE: This study highlights the important role that land use change and creation of emission-reducing technologies and innovations will need to play if agricultural emission reduction is to occur in dryland agriculture.