Simulating the effects of climate change on the profitability of Australian farms Neal Hughes, Michael Lu, Wei Ying Soh and Kenton Lawson Research by the Australian Bureau of Agricultural and Resource Economics and Sciences Working Paper July 2021 iii Simulating the effects of climate change on the profitability of Australian farms © Commonwealth of Australia 2020 Ownership of intellectual property rights Unless otherwise noted, copyright (and any other intellectual property rights, if any) in this publication is owned by the Commonwealth of Australia (referred to as the Commonwealth). Creative Commons licence All material in this publication is licensed under a Creative Commons Attribution 4.0 International Licence except content supplied by third parties, logos and the Commonwealth Coat of Arms. Inquiries about the licence and any use of this document should be emailed to [email protected] Cataloguing data This publication (and any material sourced from it) should be attributed as: Hughes, N, Lu, Michael, Soh, W, Lawson, K, Simulating the effects of climate change on the profitability of Australian farms, ABARES working paper, Canberra, June, DOI: 10.25814/5d9165cf4241d. CC BY 4.0. Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) GPO Box 858 Canberra ACT 2601 Telephone 1800 900 090 Web awe.gov.au Disclaimer The Australian Government acting through the Department of Agriculture, Water and the Environment, represented by the Australian Bureau of Agricultural and Resource Economics and Sciences, has exercised due care and skill in preparing and compiling the information and data in this publication. Notwithstanding, the Department of Agriculture, Water and the Environment, ABARES, its employees and advisers disclaim all liability, including liability for negligence and for any loss, damage, injury, expense or cost incurred by any person as a result of accessing, using or relying on any of the information or data in this publication to the maximum extent permitted by law. Professional independence The views and analysis presented in ABARES publications, including this one, reflect ABARES professionally independent findings, based on scientific and economic concepts, principles, information and data. These views, analysis and findings may not reflect or be consistent with the views or positions of the Australian Government, or of organisations or groups who have commissioned ABARES reports or analysis. More information on professional independence is provided on the ABARES website. Acknowledgements Climate projection data for this project were supplied by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) as part of Climate Change in Australia (CCA). This project was supported by the NSW Department of Primary Industries. Comments on earlier versions of the paper were provided by NSW DPI staff including Rebecca Darbyshire, Jason Crean and Bin Wang. Helpful comments on a recent draft of the paper were also received from Professor Ross Kingwell (University of Western Australia). ABARES ii Contents Abstract....................................................................................................................................................................... 1 1 Introduction..................................................................................................................................................... 2 2 Method............................................................................................................................................................... 4 Study focus: Australian broadacre farms.............................................................................................. 4 Farm micro-simulation model: farmpredict........................................................................................ 6 Commodity prices.......................................................................................................................................... 8 Climate scenarios............................................................................................................................................ 8 3 Results............................................................................................................................................................. 11 4 Discussion.....................................................................................................

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