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Maximising nutrient use efficiency and minimising emissions of the powerful greenhouse gas nitrous oxide, could enable Australian producers of high yielding irrigated cotton to participate in the Emissions Reduction Fund. This paper reviews nitrogen (N) use in the cotton industry in Australia to date and the challenges of achieving optimal N use in commercial growing practices. The study quantifies both the social and economic parameters in a benefit-cost analysis using two scenarios: an optimal use of N fertiliser and an overuse of N fertiliser in irrigated cotton production. Results of sensitivity analysis for social and economic costs have implications for policy makers focusing on improved N management and an industry supplying an increasingly environmentally aware global market. The study also contains preliminary modelling using industry research of a cotton-N emissions abatement project under the Australian Government’s Emissions Reduction Fund.


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