Making environmental offsets appealing to winegrowers

Planet Earth is facing a climate emergency. Rising global temperatures fuelled by greenhouse gas emissions have already had devastating consequences, including bushfires, drought, heatwaves and loss of wildlife and livelihoods.

To tackle this emergency on a local scale, UQ School of Economics researchers Associate Professor Ian MacKenzie and Associate Professor Lana Friesen have partnered with the Queensland Government-funded Rural Economies Centre of Excellence (RECoE).

Their focus was Queensland’s Granite Belt region, where they studied the effectiveness of environmental offsetting practices and investigated ways to boost their uptake by local winegrowers.

Critically, they found that providing winegrowers with relevant case studies and information on the costs and benefits of these practices could encourage uptake.

To kickstart their research, the team surveyed Granite Belt winegrowers about their current practices and the barriers to their investment in offsetting.

Lead investigator Dr MacKenzie said offsetting practices and technologies in the region included mulching, cover cropping, reducing chemical spraying and installing solar panels.

“These practices have dual benefits — they improve biodiversity and curb emissions while giving farmers another source of revenue,” he said.

However, Dr Friesen said the winegrowers they spoke to were reluctant to invest in offsetting practices.

“They told us they aren’t participating — not because they don’t want to, but because the information they’re getting is complex and unclear,” Dr Friesen said.

“Agribusiness owners lack knowledge about what’s available to them, particularly around the costs and benefits of offsetting practices.

“They don’t have the time or resources to figure it out; they’re simply trying to survive.”

Based on the survey results, the team designed and conducted a field experiment with their research assistant, former economics honours student and University Medallist, Jo Auer.

Ms Auer held detailed interviews with 18 local winegrowers and used case studies to measure how information affected their offset investment decisions.

Their results showed that giving winegrowers clear information about the environmental and financial costs and benefits of offsetting practices — no matter whether that information came from the government or peers — increased their willingness to invest.

“Once we provided more information, we noticed a statistically large improvement in their adoption of hypothetical sustainable practices,” Dr MacKenzie said.

“We did find that their willingness to invest might be affected by business size — for instance, investment was higher among larger winegrowers.”

Director of RECoE Associate Professor Ben Lyons said Dr MacKenzie and Dr Friesen were leading a “central discussion” for regional and rural Australia.

Associate Professor Ian MacKenzie and Associate Professor Lana Friesen

“We value their innovative approach to making environmental offsets attractive to individual farmers, effectively demystifying a very new idea in Australian agriculture,” Dr Lyons said.

“No one has ever done large-scale experiments in this space, particularly not in Australia.

“This is seminal work that will be ongoing in its impact, and we will continue to build on it.”

The researchers said their experimental economics approach meant they could control variables and focus on specific aspects that partners wanted to investigate.

“By designing field or lab experiments and applying our state-of-the-art economic modelling tools to real-life scenarios, we can help with decision-making that has a positive impact,” Dr MacKenzie said.

They hope to start a conversation about sustainable practices in Queensland, showing it’s possible to improve the environment while generating profit.

“Innovation in agribusiness is starting to happen, but we must focus on designing environmental policy that clearly communicates the costs and benefits of offsetting practices,” Dr Friesen said.

“In doing so, we can reduce Australia’s climate footprint and improve the resilience of the agriculture industry.”

Their findings will reach policymakers and key agribusiness stakeholders across Queensland.

The research project received financial backing from RECoE, which is funded by the Queensland Department of Agriculture and Fisheries. RECoE is a research collaboration between four Queensland universities — University of Queensland, University of Southern Queensland, James Cook University and Central Queensland University.

Other current UQ and RECoE collaborations include projects on energy transitions for rural and regional Queensland and the tourism and wine industries’ contributions to the regional economy.

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