Soil Carbon Credits: A methodology soon?

Monday, August 29, 2011
A practical methodology for allowing farmers to be rewarded for storing more carbon in their soils will soon be submitted to the Government’s expert panel for assessment under the Carbon Farming Initiative. The key feature of the methodology is the way it overcomes the oft-quoted barriers to trade in soil carbon credits: additionality, permanence, and measurement.The methodology adopts the principle of a buffer pool to manage risk to 90% certainty to address the twin issues of measurement and permanence. A buffer pool is formed by banking a percentage of the tonnes submitted for sale and using them as ‘insurance’ so buyers can be confident they are getting what they are paying for. Individual farmers will be protected against losses by the pool which will be aggregated across climate zones, spreading the risk. The Government’s use of a 5% buffer to address ‘risk of reversal’ in its regulations is an endorsement of this principle.

Under this methodology, the Landholder must choose two or more practices and/or products from a menu to be applied to the project area throughout the period specified. This multiple methods approach not only reflects the normal behaviour of carbon farmers, but also addresses the Additionality Requirement because the likelihood that more than 5% of the farmers in a district, climate zone or other segment would choose the same combination of options is low
Permanent behaviour change in the land care sector is rooted in economic self-interest. The CFI provides for carbon credits, but a more powerful incentive for permanent change lies in the economic value delivered to the landholder by the accumulation of a soil carbon reserve.

Each project is defined with an initial 5 year reporting period, at the conclusion of which an initial parcel of Australian carbon credit units will be issued, based on the Net Abatement Number for the reporting period, and an initial Project Buffer Reserve allocated. A project participant may elect to continue the project with further reporting periods. The maximum total duration of a project is capped at 25 years. While economic self-interest in carbon credits would work continuously through an entry-level 5 year reporting period up to a 25 year cap, at the same time the increasing availability of Phosphorus and water would provide a continuing incentive to maintain the relevant behaviour. Simultaneously the process of culture change is expected to cement in place the land management practices as the new convention.
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