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This presentation reports the results of an investigation of the introduction of Renewable Gas Target (RGT) mechanisms in Australia. An RGT is a mechanism that seeks to increase the share or absolute amount of renewable gases such as green hydrogen in the gas supply. Green hydrogen and biomethane are the most prospective renewable gases although each has its limitations: uncertainties regarding solutions to technical constraints and the need for production cost reductions for green hydrogen and limited supply for biomethane. The first stream of the study investigates the experience of renewable targets in Australia and overseas, taking into account recent and prospective initiatives in Australia. It reports on stakeholder consultations with gas networks, industrial and small gas consumers, renewable gas producers, government policy makers and regulators. It reports a broad range of perspectives on a renewable gas target and the potential use of green hydrogen in the Australian economy. It then proceeds to a discussion of the economic issues arising in the design of an RGT and puts forward some alternatives that could be looked at by policy makers considering a sector-specific initiative and assesses their advantages and disadvantages. The second stream of work involves computable general equilibrium (CGE) modelling of the economic impacts of alternative configurations of an RGT. The CGE modelling proceeds from an emissions trajectory which is consistent with current government policy and in particular net zero by 2050. Net zero by 2050 cannot occur without substantial offset activity and the model allows for it. It takes a baseline scenario without an RGT and develops a number of scenarios with RGT and compares them against baseline. The outputs of the CGE modelling identify impacts on major economic variables of interest such as GDP, per capita consumption, and gross output and populations for the States and Territories.

Fruit flies are a biosecurity threat to international trade of horticultural produce around the world. Area-wide management (AWM) of fruit flies offers a promising solution to coordinate farmers’ activities to fight against the spread of this pest. The incorporation of the sterile insect technique (SIT) may increase the effectiveness of AWM and lead to greater suppression and possible eradication of the fruit fly pest. This article presents findings from a choice experiment survey to ascertain the willingness to pay (WTP) for the benefits of a suite of AWM features and SIT. These features include the benefits from (1) coordinated fruit fly monitoring, (2) coordinated on-farm male annihilation of fruit flies, (3) management of fruit fly in residential areas, and (4) coordinated release of sterile flies. This is the first study of its kind to assess the WTP for AWM and SIT in a developed country. Results suggest that growers are willing to pay for SIT and coordinated fruit fly management in residential areas but are not willing to pay for other coordinated services that they are already practicing on their farms.

This study evaluates the economic potential for Area Wide Management (AWM) of the Queensland fruit fly (Qfly) using the Sterile Insect Technique (SIT) through three case studies across endemic and Pest-Free Areas (PFA) in south-east Australia. The cost of Qfly needs to be identified before the potential benefit of AWM and SIT can be evaluated. We use results from grower workshops and expert elicitation to identify the financial cost of Qfly to growers (the baseline) and the potential impact of AWM as a precursor to SIT (scenarios). Results show a net benefit from maintaining PFA status. In endemic regions, the potential financial benefits to growers of are low. Avoided adjustment costs that contribute to a net benefit in PFA’s are sunk in endemic regions. The low threshold for Qfly in markets and on-farm, and availability of cost-effective management options, implies limited benefits from avoided management costs. Market access is uncertain and AWM and SIT alone are not sufficient to access these benefits. Although there may be exceptions, we find limited grower benefits from AWM and SIT in Qfly endemic growing regions.

Vulnerability assessments have often invoked sustainable livelihoods theory to support the quantification of adaptive capacity based on the availability of capital--social, human, physical, natural, and financial. However, the assumption that increased availability of these capitals confers greater adaptive capacity remains largely untested. We quantified the relationship between commonly used capital indicators and an empirical index of adaptive capacity (ACI) in the context of vulnerability of Australian wheat production to climate variability and change. We calculated ACI by comparing actual yields from farm survey data to climate-driven expected yields estimated by a crop model for 12 regions in Australia's wheat-sheep zone from 1991-2010. We then compiled data for 24 typical indicators used in vulnerability analyses, spanning the five capitals. We analyzed the ACI and used regression techniques to identify related capital indicators. Between regions, mean ACI was not significantly different but variance over time was. ACI was higher in dry years and lower in wet years suggesting that farm adaptive strategies are geared towards mitigating losses rather than capitalizing on opportunity. Only six of the 24 capital indicators were significantly related to adaptive capacity in a way predicted by theory. Another four indicators were significantly related to adaptive capacity but of the opposite sign, countering our theory-driven expectation. We conclude that the deductive, theory-based use of capitals to define adaptive capacity and vulnerability should be more circumspect. Assessments need to be more evidence-based, first testing the relevance and influence of capital metrics on adaptive capacity for the specific system of interest. This will more effectively direct policy and targeting of investment to mitigate agro-climatic vulnerability.