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Situation and outlook: Approximately 30 per cent of Australians live in rural and regional Australia, including the populations of regional centres outside the major state capital cities. Rural (farm-dependent) economies account for 17 per cent of national employment (ABARE, 2010b) and contribute 12 per cent of GDP. Rural Australia contains and supports almost all of the environmental assets upon which the entire nation depends for food, water and environmental amenity, so the contribution of rural Australia to national wellbeing far exceeds its contribution to GDP.

Australia has long been subject to climate variability, and projections of future climate change indicate rainfall decline in much of southern Australia in coming decades (Section 2; CSIRO and Bureau of Meteorology, 2007; CSIRO, 2008).

Energy-water-carbon intersections in rural Australia: Population growth throughout the nation will place increased demands for rural Australia to meet five goals simultaneously (Figure 4.6): to increase food and fibre production; to maintain water production in catchments; to contribute to the decarbonisation of the Australian economy through biosequestration, bioenergy production and emissions reductions; to preserve environmental assets and natural heritage; and to maintain thriving, diverse rural communities.

These five goals are linked. Energy-carbon-water intersections in rural Australia underpin all the landscape functions indicated in Figure 4.6 and thus involve interactions between industries, communities and environmental assets. This implies that most activities in landscapes involve energy-water-carbon intersections, leading to a proliferation of consequences in addition to the intended direct outcome of the activity. Some of these additional consequences are beneficial, while others may be adverse. Table 4.1 provides some examples of relational opportunities and risks that need to be considered.

It follows that the enhancement of resilient land systems in rural Australia requires that water, energy and carbon—together with food production, protection of environmental assets and socio-economic development—are not managed in isolation but as interacting parts of a coherent system. This theme is addressed in Recommendations 3 and 5.

Figure 4.6: Energy-water-carbon intersections in rural Australia (the underlying triangle) underpin five major landscape functions (the superimposed pentagon). All points of the triangle are linked directly or indirectly with all points of the pentagon.



Activity

Environmental effects

Socio-economic effects

Energy-water-carbon intersections

Risks/uncertainty

Expand biofuel production

(1) Less reliance on
fossil fuels

(2) Climate change mitigation

(1) Development of rural bioenergy industries

(2) Less reliance on
global energy markets

Potential to induce land clearing elsewhere (leakage); biomass production requires
water and possibly fertilisers

Conversion of fertile cropland to bioenergy harvests

Diversion of waste biomass to bioenergy and biochar production

(1) Fossil fuel substitution

(2) Biomass stabilisation

(3) Less pressure on landfill systems

(4) Lower GHG emissions from landfills

Local economic activity from bioenergy production systems (potentially mobile units)

Energy production instead of GHG production

Ensure sustainable management (e.g. retain some stubble)

Biochar application to agricultural soils for productivity increase

(1) Likely increased
water-holding
capacity

(2) Greater soil resilience

(3) Potential increase
in crop productivity

(4) Nutrient retention
(5) Carbon sequestration

(1) Local biochar production and consultation

(2) Knowledge required in carbon accounting and markets

(1) Potentially less
fertiliser use

(2) Lower energy and water requirements

(3) Production and distribution may require long distance transport

(1) Un-regulated production and application of biochar to farmland may disturb nutrient balances

(2) Need for certification

(3) Transport costs

(4) Uncertainty over permanence

Biochar application to agricultural soils for sequestration

Build up of soil carbon in agricultural soils with benefits as listed above

(1) Potential income
from C credits

(2) Connection with bioenergy production

(3) Need for expertise

Other forms of soil carbon may be lost during drought.

(1) Exposure to carbon markets

(2) Limited production
of biochar

(3) Inflated prices

Afforestation for carbon credits and bioenergy

(1) Increase in soil
carbon and biomass carbon

(2) Decreased runoff and stream flow

(1) Growth in carbon forest industry

(2) Development of new tree species and harvest management

(1) No net CO2 emissions

(2) Less dependence on fossil fuels.

(1) Transport costs

(2) Possible displacement of food production areas

(3) Decreased water
flow to catchments

Retirement of unproductive cropland and conversion to native pasture
or woodland

(1) Revegetation of degraded land

(2) Biodiverse and
resilient landscapes

(3) Retention of
natural heritage

Government incentives may be required to convert from conventional to new
land stewardship practices

Potential increases in carbon stores in soils
and vegetation

Loss of employment
in conventional rural sector jobs


Table 4.1: Examples of activities in landscapes, their energy-water-carbon intersections and their interactions with other landscape functions. Note that many of the listed effects are based on unpublished data and need to be further investigated as part of Recommendation 3. CO2 is carbon dioxide, GHG is greenhouse gas.


The carbon challenge in rural Australia: Bioenergy production and the managed biosequestration of GHGs are two emerging activities that can make significant contributions to the future decarbonisation of the Australian economy. Both have the potential to reduce Australia’s net GHG emissions. In addition, increased use of bioenergy can reduce Australia’s dependency on fossil oil and gas (IEA Bioenergy, 2009), and biosequestration can increase soil resilience and productivity (Krull et al, 2004; Chan et al, 2008). However, both activities also have major implications for water availability, food and fibre production, nutrient balances, biodiversity and socio-economic structures.

Biomass production for bioenergy, biofuel or biochar production has collateral effects through competition with food production for land and ancillary GHG emissions which have to be managed effectively to ensure that the whole system has a significant overall benefit for GHG mitigation. Likewise, factors that favour increased food and fibre production, for example nutritional requirements, consumer preferences, environmental constraints, global price signals and trading systems, are not always also favourable for water production, energy efficiency and low GHG emissions.

Managed biosequestration can be achieved in several ways: through afforestation and reforestation, through increasing soil carbon by farming practice and through the use of biochar. Among the important additional consequences to be considered are reductions in stream flows in afforested catchments (Zhang et al, 2004), alterations in nutrient balances and the need for ongoing management of landscapes to preserve high carbon levels in soil and/or biomass, so that the sequestered carbon is not returned to the atmosphere.

Management of soil carbon levels as a biosequestration strategy has been promoted as offering significant technical GHG mitigation potential in Australia (e.g. Garnaut, 2008; ClimateWorks Australia, 2010). Australia has vast areas of land under agricultural management, and small increases in soil carbon levels across Australia would indeed result in substantial mitigation of GHGs (CSIRO, 2009; Walcott et al, 2009). However, there is much uncertainty about the response of many Australian soils to a change in management practice (Sanderman et al, 2010) and evidence suggests that observed increases in soil carbon are volatile and can be easily lost during drought or after a change in management practice (Sanderman and Baldock, 2010). Use of irrigation or nitrogen fertilisers to increase productivity and thus soil carbon accumulation (Sanderman et al, 2010) has obvious water, energy and GHG implications.

Achieving effective integration of rural Australia into a future low-carbon economy will require changing priorities in land management, adopting new farming practices (soil carbon management, water conservation) and maximisation of research, development and learning opportunities—particularly, but not only, in bioenergy and biosequestration.

Emerging challenges: With a growing population, agricultural food productivity must be increased. This suggests that high-productivity agriculture should increasingly occur in more productive climates and soils, and that marginal lands, especially those under the threat of increased drying, should increasingly be managed for alternative uses such as bioenergy production. The corollary of this constraint is the need to achieve domestic food security, together with an ongoing food export contribution to the Australian economy and global food security, within similar land availability limits to those effective now and with lower resource inputs (PMSEIC, in press).

The main constraints for increase in bioenergy and biochar production are biomass availability and limits on the availability of productive land (O’Connell et al, 2009), while the dominant constraint for both biosequestration (in soils and trees) and also for increased food production is water (Sanderman et al, 2010). Future constraints in all these areas have the potential to be exacerbated by population pressures: global modelling indicates that these tensions are directly related to population growth (World Bank, 2009). As awareness of these limitations increases it will be important for the population-food-fuel tension to be replaced by sensible, long-term land planning and resource strategies (Glover et al, 2008) which exploit emerging technologies.

Emerging opportunities: Future bioenergy production and biosequestration are likely to be less energy- and water-intensive than current technologies (Table 4.1). Significant advances are occurring in large-scale biorefinery technology and biofuel production, such as energy production from algae (Pienkos and Darzins, 2009). Global projections suggest that by 2050, sustainable sourcing of biomass for bioenergy production could contribute between a quarter and a third of the future global energy mix (IEA Bioenergy, 2009). Australia has the opportunity to plan and prepare for these global trends. Emerging opportunities for bioenergy production and biosequestration can be linked to new bioenergy production systems—particularly in the area of biorefineries—that are based on smaller-scale production, mobile production units, technology advancement and bioenergy-specific carbon accounting services.

There is an immediate opportunity to establish joint development goals for food/fibre and fuel production, focusing on linked biomass, energy and water planning to increase output per hectare while supporting Australia’s move to a low-emissions future. A forward-looking approach needs to be adopted to cope with climate-related changes to Australia’s rural sector. Opportunities exist to combine better soil carbon management with carbon sequestration, both through natural and engineered solutions, and for a shift to non-land-based sectors (Walcott et al, 2009). Examples include:

  • development of water-tolerant forage for ruminants (Cullen et al, 2010)

  • genetic modification of productive biomass to achieve greater energy-water-carbon efficiency

  • increased focus on regional integration of biophysical and productivity drivers (Section 3.3)

  • better use of waste (DEWHA, 2009)

  • greater diversification in rural industries, for food and fibre production and in response to the globally recognised need for bio-based replacements for petrochemicals (Gregory, 2010)

  • development of non-land-based biomass sources for biofuels (such as algae) and biorefinery products (aquaculture, fisheries, kelp) to decrease pressure on land use (IEA Bioenergy, 2009).


4.5 Urban systems

Key points

  • Australia’s high and increasing level of urbanisation means that energy-water-carbon intersections in cities and towns are critical, presenting both opportunities and challenges.

  • In Australia as well as overseas, many local and state governments are endeavouring to take a holistic and practical approach to urban sustainability, including adaptation to climate change, mitigation of urban greenhouse gas emissions and reduction of urban ecological footprints.

  • There are major opportunities to meet urban energy-water-carbon challenges, for example through: increased energy and water efficiency, water recycling with associated energy cogeneration, local climate improvements through urban design and changing lifestyles to facilitate transport and increase amenity (see Section 5, Recommendation 4).

  • These efforts, which are mainly locally based at present, need strong augmentation and national support (see Section 5, Recommendation 4).
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