The Fairley La Trobe Lecture: Alan Finkel

The impacts of climate change on regional Australia

I begin by acknowledging the Yorta Yorta and Bangerang people, the traditional custodians of the land on which we meet, and I pay my respects to their Elders past and present.

I would also like to thank and acknowledge Andrew Fairley, great nephew of Sir Andrew Fairley and Chair of the Fairley Foundation, and Professor John Dewar, Vice-Chancellor of La Trobe University, for the invitation to speak this evening and for overseeing this distinguished forum that has hosted many of our nation's leading intellectuals and community leaders.

It is a great privilege to be with all of you this evening and to be part of a lecture series named in honour of a remarkable person with an outstanding record of achievement.

Sir Andrew Fairley thrived in peace and war, through the Depression and times of prosperity, in public and private life.

He was a visionary with an abiding love for the people of Shepparton, and a genuine desire to leave it stronger and better for future generations – epitomised by the continuing work of the Fairley Foundation.

The eight decades of Sir Andrew’s life bore witness to an age of unprecedented human achievement and advancement.

He had an uncanny gift for overseeing transformation, for solving the seemingly unsolvable, and for demonstrating what the power of innovation can do for the economy of a region.

We are gathered at this forum at the dawn of a new age, amidst a complex and changing world.

Like all key moments of challenge and decision, it poses some hard choices.

But I firmly believe the age of renewable energy offers us a chance, perhaps greater than any period that has gone before, to preserve our planet, transform our regional economy and build a better future.

It’s an ambitious goal.

But this moment demands ambition, and it is attainable if we act boldly and decisively.

In honouring a life marked by ingenuity and adaptation, it seems appropriate, therefore, to draw upon the lessons from three phases of Sir Andrew’s extraordinary life.

Taking inspiration from his brilliant legacy as we advance from the waning smoke of the Industrial Age towards the glowing light of the Electric Age.

Phase one.

Let’s go back to 1921.

Despite opening to great fanfare and high expectations, the new Shepparton Fruit Preserving Company is in serious trouble.

Growers have been told that “a very severe period of stress and depression” had marked the previous year, and there are fears that the whole enterprise could collapse – taking with it the dreams, the orchards and the investments of countless people in the Shepparton community.[1]

A special meeting is called to address this critical issue, and a well-respected business manager and shareholder, Mr A.W. Fairley, is asked to join the board of the cannery.

Fairley brings sound business practices and a fundamental maxim to the challenges facing the cannery: The first step in solving a problem is to understand the nature of the problem.

He quickly identifies 4 key areas for attention to take the company forward.

First – improve relations with growers and suppliers.

Second – insist that only high-quality products pass through the cannery.

Third – explore, and exploit, the potential of the vast overseas market.

And fourth – improve the processing methods and workforce efficiency.[2]

The results of Fairley’s method are there for all to see.

Within a few years, he would be chairman and managing director, positions he would hold for the next 40 years.

The once struggling factory in the weatherboard shed would become the biggest cannery in the Southern Hemisphere and an iconic Australian brand and business.

SPC’s products would be well-known, highly regarded, and sold right around the world.[3]

So, let’s adapt the Fairley method for our own needs.

First, the nature of the problem.

The debate is fundamentally over.

The linkage between anthropogenic emissions and global warming is clear.

The modelling to show that global warming leads to climate change is extensive.

And the results are devastatingly apparent.

In Australia, we have experienced successive seasons of unprecedented bushfires and floods.

Our annual fire season is now, on average, 27 days longer than it was in the late 1970s.[4]

And, as we witnessed last year in New South Wales and Queensland, so-called ‘one-in-a-hundred-year’ floods are fast becoming a regular occurrence.

Closer to home, the projected increase in average temperatures across the Shepparton region will place substantial pressure on stone fruit that require hundreds of hours of winter chill to fully flower and fruit.

To overcome these challenges we must, true to the Fairley method, identify key areas for attention.

As huge swathes of humanity emerge from poverty to enter the middle class, the demand for energy and goods continues to rise.

And so do emissions.

Between 1990 and 2021 global civilisation only reduced its fossil-fuel diet from 87% to 83% of total energy consumed worldwide.

Let me spell that out.

We shaved off 4% in the last 30 years.

In the next 30 we need to shave off 83%.

Our energy system is a massive organism nourished on fossil fuels. It is why I have spent so much of the last eight years focussed on decarbonising the energy sector.

And the great agricultural advances humanity has made are tied to greenhouse gas emitting livestock and energy sources.

Between them, energy and agriculture account for nearly 90% of all global greenhouse emissions.

And almost 87% of Australian greenhouse gas emissions.

This is an extraordinary challenge.

And it forces us to question long-held views.

But change has never been simple.

It depends on planning.

It requires determination.

And, crucially, it takes courage and aspiration.

All the immense progress we see around us every day is the sum total of many courageous decisions.

To seek out the evidence, reach for solutions, and set forth the vision and inspiration to forge the path forward.

Sir Andrew certainly understood this.

Phase two.

It’s 1946.

The war has just ended, and Sir Andrew’s horizons and responsibilities have significantly broadened.

Fairley the Chairman is now also Fairley the Local Government Councillor, overseeing the development of a town planning scheme to realise his vision for the future: Shepparton as the great commercial and industrial centre of the rich, fertile, Goulburn Valley.[5]

In presenting the full report to the people of Shepparton, Councillor Fairley notes:

“it is based, not upon speculation or wishful thinking but upon a long and careful analysis of relevant data obtained from both Australia and overseas sources to suit local needs”.[6]

Many of the structures and landmarks we see in Shepparton today, including this very Art Museum, can be traced back, in part, to Fairley’s vision.[7]

So, what does our own analysis tell us as we plan for our future?

There can indeed be no wishful thinking – this will be the most difficult economic transition since the dawn of agriculture.

Just think about all the enormous pressures facing the agriculture industry right across the globe.

As climate change is making itself felt in increasingly frequent and more severe weather events, the world has ever more mouths to feed, and farmers and growers face ever increasing demands to meet market expectations, work more efficiently, and provide lower and lower-emissions products – all at the same time.

In a recent paper, BloombergNEF, a famous company providing research on global commodity markets and the technologies driving the transition to net zero, referred to agriculture’s impact as being ‘the biggest problem you have never heard of’.^[8]

The criticisms directed against agriculture include being responsible for 80% of biodiversity loss, 70% of freshwater withdrawals, 86% of anthropogenic nitrogen oxide emissions and 90% of phosphorous pollution.

A damning assessment.

Yet, in our rush to respond to the very real and worsening threat of climate change, we must never forget that agriculture underpins our society.

Farmers are not the villains here.  To the contrary, they are the heroes who ensure that the average Australian goes about their day in the certainty that there’ll be enough to eat.  The abundance we so often take for granted is thanks to extraordinary hard work and hardship in the farming community.

But the pressure is on.

Australia is committed to net zero by 2050.

Victoria is committed to net zero by 2045.  In its agriculture sector emissions reduction pledge, the government committed funding to work with up to 250 farmers to pilot on-farm action plans to reduce emissions and build climate resilience.^[9]

All of this change impacts communities and workforces.  Aware of this, the government’s Primary Production Action Plan, produced with the assistance of La Trobe University, considers these impacts and covers the full value chain from key inputs and crop growth through to harvesting, production and processing.

Of course, Australian agriculture is primarily export oriented – with around 72% of our total agricultural production sent overseas.[10]

The Department of Agriculture recently forecast that the value of agricultural exports is expected to fall 17% to $65 billion in the current financial year – due in part to a decrease in domestic production, but mainly due to low crop-export values.^[11]

With the stabilisation of Australia’s relationship with China, and with pandemic restrictions being lifted, the value is expected to increase in the future, but it illustrates that our agricultural industry is highly dependent on international demand and prices.

Part of the demand is reputational.  Australia has one of the strongest nation brands in the world but, in recent years, criticism of our climate policies has tarnished some of the gloss.

For example, in 2021 we were ranked last of 59 countries in the international Climate Change Performance Index.[12] 

With our new ambitions we are starting to climb up the ladder, and I now routinely see positive commentary about Australia in the international press.

Our improving reputation will help all our export industries – especially agriculture, as the international push towards green farming grows.

In Europe, the Codified Climate Law sets a legally binding target of net zero by 2050 and at least 55% lower emissions by 2030.[13]

It does not just cover emissions.  The Codified Climate Law also requires a 50% reduction of pesticide use on 2020 levels by 2030 and a 20% reduction in fertiliser use for European farms.[14]

In response, the Dutch Government announced plans to halve the country’s nitrogen emissions by 2030 – leading to farm buyouts and an expected one-third reduction of the nation’s livestock. [15]^,[16]

Dutch farmers are furious and are using their tractors to block highways and toss burning bales of hay onto the sides of the roads.

Personally, I question the logic of the world’s second largest agricultural exporter by dollar value voluntarily reducing its output.

In all likelihood, the livestock production and associated emissions will simply shift to other countries that have lower standards.

The Netherlands should improve its practices rather than offshore its production, but the broader message here is that the Netherlands and the European Union are enforcing emissions reduction at home, and these targets are likely to be applied to all imported products.

Indeed, there is increasing pressure on Australian farmers from banks, investors, and importing countries seeking to improve their green credentials.

This has led to the rise of a complicated, makeshift system of accounting firms – each with its own policies, its own requirements and procedures, and a hefty bill.

I have been told that there are currently dozens of companies offering to charge farmers to undertake their carbon accounting.

For one Victorian cherry farmer, her audit costs to sell her produce have jumped to more than $40,000 per year.

In my view, the way forward is to replace the current collection of haphazard schemes with a single, orderly, federal government managed scheme.

It is what we are doing in the hydrogen industry, with great success.

After two years of consultation and planning, the federal Clean Energy Regulator is beginning to deploy a hydrogen ‘guarantee of origin’ scheme that tracks information such as the carbon dioxide emissions intensity during production, the manufacturing location, and the technology used.

And now the Clean Energy Regulator is working with other national governments to seek agreement on an internationally accepted tracking scheme.  The dream is one scheme for all countries that trade hydrogen, rather than dozens of voluntary schemes in each country.

If something similar could be implemented to track the use of chemicals and carbon emissions in agriculture, it would simplify a confusing set of overlapping approaches.

The Clean Energy Regulator would be an appropriate organisation for carbon emissions reporting because of its expertise in managing the methods for Australian Carbon Credit Units, known as ACCUs.

For monitoring and reporting chemicals, it could perhaps be assisted by the Australian Pesticides and Veterinary Medicines Authority, the Government regulator of agricultural and veterinary chemical products.

The rise of hydrogen is the perfect example of what can be accomplished when imagination is joined with perseverance. The conceptual framework was established 150 years ago, trials took place during last century, and now the pieces of the puzzle are falling into place and production and demand are both soaring.

Once dismissed as the stuff of science fiction, hydrogen is now seen as essential to helping address the challenge of climate change.

It highlights that breakthroughs of the kind we applaud today do not just happen overnight.

They represent years and years of investment and hard work.

And, as Sir Andrew Fairley recognised, we can drive our success as a nation by utilising new industries and harnessing the technology of change.

Finally phase three.

It’s March 1954, and we’re in the township of Yallourn, and the centre of the Victorian State Electricity Commission’s work in the Latrobe Valley.^[17]

Having just served as the City of Shepparton’s first mayor, and running the Cannery at record profits, Sir Andrew is now an SECV Commissioner and is waiting for the Queen and the Duke of Edinburgh to showcase the towering Yallourn power station which produces nearly half of Victoria’s electricity.[18]

The years of Sir Andrew’s involvement have seen astonishing growth in the profile and activities of the SECV.

In just two decades, capital expenditure has increased more than ten-fold, annual revenue has skyrocketed from 4 million pounds to nearly 40 million, and customers have increased by more than 150%.^[19]

But one statistic gives particular satisfaction to Sir Andrew.

When he joined the SECV, in 1937, there were about 2,600 farms connected to electricity in Victoria.

When he leaves, in 1957, there were 36,000.[20]

The key message: the scale of the job is vast, and it will take decades.

But we must embrace the future. Resistance is futile.

Case in point:  in March 2021, EnergyAustralia announced that it will close the Yallourn Power Station in mid-2028, four years ahead of schedule, and instead build a 350-megawatt battery in the Latrobe Valley by the end of 2026.[21]

While this is a big battery, it is small compared to the coal-fired power station that is closing down, so think of it as a downpayment.

More important is that the local council, unions, the company and the state government are investing in a just transition for the workforce that will be displaced.  This forward planning is crucially important, and much better than the shock and disruption when Hazelwood Power Station was closed down in 2017 with just five months notice.

Around the world, scientists and entrepreneurs are integrating abundant renewable energy, more powerful batteries, and breakthroughs in fields like synthetic and artificial produce to open new frontiers of possibility and invent a low-emissions future.

Zero emissions solar and wind electricity now supplies 5% of global energy consumption.  To be clear, that is 5% of total consumption which, in addition to electricity consumption, includes direct combustion of petrol and diesel in vehicles and burning natural gas for building heat and hot water.

Best of all, the combined contribution of solar and wind electricity has been growing fourfold for each of the last two decades.

At fourfold per decade, the contribution of solar and wind energy will increase from 5% to 20% of total global energy consumption by 2030, and then to 80% by 2040.

Maintaining that rate of growth will be difficult, but it is not inconceivable.

To achieve a fourfold increase in a decade, the average annual increase has to be 15%.

I am encouraged by the growth in solar and wind generation in the first three years of this decade that we will be able to maintain a fourfold increase for the current decade.

For example, globally, just last year, manufacturing capacity for solar panels grew by 39% and for batteries grew by 72%.

Globally, electric car sales leapt by 40% in 2020, 110% in 2021 and 55% in 2022, reaching 15% of new car sales last year.  These are staggering rates of growth.[22]

These technology transitions will provide the opportunity for farmers to economically replace onsite diesel generators with onsite solar panels combined with batteries, and to replace diesel tractors with battery electric tractors.  Not yet, but it is coming.

Many naysayers see the rise of renewable electricity as ushering the end of economic growth but, encouragingly, by the end of 2022, thirty-three different countries were enjoying economic growth accompanied by decreasing emissions.

So, we’re on our way. We can do this.

But as we pursue the growth in agricultural exports to $100 billion, we will have to continually be smarter and more sustainable.

Globally, there is a push to develop new fertilisers and pesticides that have fewer side effects, increase farm productivity through gene editing and precision agriculture, and shift to plant-based and lab-grown meat alternatives.[23]

All sensible ideas, but none are easy.

To its lasting credit, the agriculture industry has resolved to meet these challenges.

The National Farmers’ Federation has stated it supports net zero by 2050.^[24]

Meat and Livestock Australia has set the ambitious target to be carbon neutral by 2030.^[25]

And they affirm that they have already decreased annual emissions by 57%.^[26]

This is a wonderful achievement and testament to the collective efforts of the Australian community.

But the march to zero is difficult.

Each step brings its own challenges, and we will need to learn and adjust our approach as science advances and technology evolves.

Which is why I’m delighted to see that, under the leadership of Professor Lauren Rickards, La Trobe University has established Australia’s first Climate Change Adaptation Lab to use interdisciplinary research to determine how workforces in agriculture and government will need to adapt, especially in relation to regional Australia.[27]

The University also has the La Trobe Institute for Agriculture and Food, led by Professor Tony Bacic, for world-class research into seed production, food and health.[28]

And under the leadership of the Vice-Chancellor, John Dewar, the University is walking the talk, by transitioning to 100% renewable energy and becoming carbon neutral by 2029.  Indeed, the University’s Mildura and Shepparton campuses are already officially net zero, being the first Victorian university campuses to achieve this status.

Initiatives such as these will ensure we continue to develop the ideas and innovations on which our future depends.

So, what is needed for agriculture to push on and achieve net-zero emissions?

There is no single, simple key.

During my time chairing the development of Australia’s Low Emissions Technology Investment Roadmap, we identified enteric fermentation – that’s belching by cows and sheep – as accounting for around 70% of agriculture’s greenhouse gas emissions.

They belch because their stomachs are full of parasitic bacteria that steal some of the nutrients they eat.

These bacteria release methane as a by-product.

And each of those small puffs has a big effect on our climate because methane is a greenhouse gas twenty-eight times more potent than carbon dioxide.

But what if I told you we can reduce methane emissions by as much as 90% and help livestock grow faster and larger?

It isn’t genetic modification. It isn’t a chemical. It’s a red algae named Asparagopsis that grows in the temperate coastal waters of Australia.^[29]

In 2020, the CSIRO, alongside James Cook University and Meat and Livestock Australia, won the prestigious ‘Food Planet Prize’ for their work developing this bacteria-busting seaweed into a commercial product called FutureFeed.

And with only 100 grams of the red algae needed per cow per day the cost impact will be negligible.^[30]

Similarly, Meat and Livestock Australia reports that little more than one teaspoon per animal per day of the Dutch feed additive 3-NOP, marketed as Bovaer, also resulted in a 90% reduction in methane emissions, and cattle growth remained in line with industry expectations.^[31]

The biggest challenge is that most cattle feed consumption in Australia is through grazing.  A possible solution for grazing animals is to add Bovaer to lick blocks. Research on this approach is currently underway.^[32]

Of course, an alternative is behavioural change, where we shift from eating meat to plant-based or synthetic substitutes.

No one can predict the scale and speed of the shift to these alternatives.

But global momentum is growing.

I can attest to that.

I’ve enjoyed Impossible Burgers in the US and Melbourne.

I’ve enjoyed artificial sausages in London.

And I plan to try synthetic chicken in Singapore.

Plant-based alternatives are also making headway in the dairy industry.

Norco, a New South Wales north-coast farming cooperative, has created a milk alternative, made entirely from green peas, with the same protein, calcium and creaminess as dairy.[33]

Surprisingly, the CEO of Norco says that although at the start there were strenuous objections, nowadays more than 80% of the farmers in the cooperative are on board with the plant-based milk business.

Why? Because it simplifies their business and helps them with succession planning.^[34]

There is also Eden Brew, a CSIRO-backed start-up that has worked out how to insert synthetic cow DNA into yeast to emulate the natural fermentation process and expects to have its animal-free products on the market by 2024.^[35]

Of course, these synthesised products need input ingredients.  There is no way that the world will accept fossil fuels as the inputs, so they will be supplied by the agriculture industry.  That is, the future of agriculture is assured, but it will have to adapt to new markets.

Agriculture will also have to adapt to new technologies.

Robot fruit harvesters are not with us yet, but they are coming.^[36]

Some of them will be flying robots. Indeed, an Israeli company aims to have flotillas of flying drones all working at the same time in the same field, talking to each other so that they optimise picking without interference.  They will be able to harvest stone fruits, avocados, oranges and pomegranates, 24 hours per day. And they will be able to pick fruit up to 5 metres above the ground.

Other companies have developed robots that they claim can pick delicate fruits every two seconds with damage as little as 1% of the harvest.

These systems are not commercial yet, and still struggle with fruit hidden behind leaves, but they are getting better all the time and it is likely that they will be commercially available in two or three years from now.

Finally, let’s turn to fertilisers and fuels.

The widespread use of manufactured nitrogenous fertilisers was a key contributor to the agricultural green revolution in the 1960s.

Today, we take the word green beyond its original meaning, to refer to the low-emissions credentials of farming and its inputs.  Under this modern definition of the green revolution, there is every reason to believe we can manufacture our nitrogenous fertilisers without emissions.

The key ingredient in this type of fertiliser is ammonia.

Ammonia is a simple chemical made from two elements: hydrogen and nitrogen.

Currently, the vast majority of ammonia is produced from hydrogen that is itself produced from natural gas, with enormous by-product emissions of carbon dioxide.

Fortunately, hydrogen is bound up in other substances. One we all know: water, the H in H-2-O.

We can therefore extract hydrogen, with zero emissions, by splitting water using renewable electricity in a process called electrolysis.

And, as a nation blessed with an abundance of all the ingredients needed to make clean energy, Australia has an unmatched advantage to be a world leader in its production.

We have the highest average solar radiation per square metre of any continent.

We also have some of the best wind resources.

If we get it right, Australia will be able to use its vast reserves of solar and wind energy to become a major exporter of green ammonia and go further to convert it into urea and thus green fertiliser.

By adopting green nitrogenous fertiliser, Australian farmers will lower their own attributable emissions – making their crops more attractive to demanding green purchasers at home and right around the world.

Similarly, there is growing international interest in bio-based methanol and jet fuel.

Finnish company Neste is the clear world leader in producing modern biofuels that can be used as replacements for existing liquid fossil fuels.  Big as they are, the global production of jet fuel by Neste and their competitors combined is only about 0.1% of international aviation fuel consumption.

Currently, predictions are that there will not be enough biomass to produce sustainable jet fuel to meet world requirements, a concern that is driving a lot of discussion about how supply can be scaled up.  That may or not represent new opportunities for farming, depending on the costs of production and collection.

Another opportunity for future farming, some would say a threat, is carbon markets. The pressure is on to convert grazing land to forests and to change agricultural practices so as to increase the amount of carbon stored.

There is merit in considering these options, but with eyes wide open.  Once land is committed to reforestation under an approved scheme, it is locked up for that purpose for at least 25 and up to 100 years.

In short, there is a new green revolution underway.

Perhaps Dorothy Mackellar saw it coming. In her poem My Country she declared “I love a sunburnt country, a land of sweeping plains,” but she also referred to “the filmy veil of greenness, that thickens as we gaze.”

As the land “of droughts and flooding rains” we can use the natural bounty of our own backyard to succeed in this new age.[37]

There’s no doubt that these are testing times.

But I am absolutely convinced that we will rise to meet them.

We began in 1921, at a time of great challenge and great change.

But this region was not built on timidity or uncertainty.

It was built with vision, with initiative, and with hard work.

And Sir Andrew Fairley would be the first to remind us that the transformation he oversaw depended on an entire generation of Sheppartonians who did not falter.

Who dedicated themselves to the fulfilment of a collective vision.

And who, together, turned a once struggling business into a thriving example of innovation and productivity.

By the mid 1950s, 70% of the canning fruits produced in Australia were grown in the Goulburn valley.[38]

It was said that all the cans of fruit produced at SPC, in just one session, would stretch from Melbourne to Perth if they were laid end to end.[39]

Everyone shared in that pride and success, leading the ‘Shepparton News’ to declare:

“what enabled them to succeed in the face of so many discouragements and reverses was the spirit of bulldog tenacity…if they had not possessed the nerve to dare and to dare and without end to dare the whole enterprise might easily have collapsed”.[40]

It is a story that speaks to the spirit that has sustained this region across the generations.

That even in the most difficult of circumstances, there is a resilience and resolve that defines it.

Your success is our nation’s success.

And I know that you will continue to carry this tradition forward as we embark on a new and exciting era.

May the Force be with you.

Thank you.

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Image: "Alan Finkel (01115856)" by IAEA Imagebank is licensed under CC BY-NC-ND 2.0.

[1] Tidey, J. (2015). The big Sheppartonian : a life of Sir Andrew Fairley . North Melbourne, Vic: Arcadia. p.63