Benefit from carbon exemptions and credits
From the August 2011 edition of Agriculture Today.
Carbon-pricing policies announced recently by the Federal government can benefit farmers.
Agriculture is exempt from liabilities for greenhouse gas emissions produced on farms, and will have opportunities to earn carbon credits, paid for by big emitters.
From July 2012, major generators of greenhouse gases will be liable for their emissions.
They can meet their liabilities by purchasing government-issued permits, by changing their processes to reduce their emissions, and by purchasing offset credits.
This is where farmers can benefit: practices that reduce emissions and sequester carbon can earn credits through the Carbon Farming Initiative.
The Carbon Farming Initiative (CFI) was intended to have started last month, but passage of the CFI Bill was delayed.
The Bill is expected to pass through the Senate when parliament resumes in August, and the CFI should start later this year.
“Without mandatory emissions trading, the CFI would be reliant on goodwill - credits would only be purchased on the low-priced voluntary market,” said Annette Cowie, Director of the National Centre for Rural Greenhouse Gas Research at Armidale.
“Around the world, the voluntary carbon market usually trades at around five dollars per tonne of carbon dioxide equivalent or less,” Professor Cowie said.
“However, with emissions-intensive industries now becoming liable for emissions, and a price of $23/t, set to rise at 2.5% per year, farmers can expect much greater returns for offsets.”
Along with the carbon price, the Federal government announced $1.7 billion in funding to support the land sector, including for the implementation of carbon farming.
Professor Cowie says funding will go into research of carbon farming techniques, into development of accounting methods, into skills development, extension, and to support the adoption of minimum tillage.
Types of activities that could earn offset credits include reduction in emissions from ruminant livestock and from applied fertiliser, application of biochar, and increases in soil carbon.
Several draft methodologies describing specific project types, and the data and methods required for calculation of credits, have been released for public comment.
These include methodologies for projects that reduce emissions from manure in piggeries, and for tree planting.
A study recently publicised in the journal Nature, suggests the value attributed to sequestration activities, such as tree planting for credits, should be written down by 20%
The authors suggest that as atmospheric CO2 concentration rises, soils will release more of the potent greenhouse gases, methane and nitrous oxide, reducing the benefit of increased carbon storage by about one fifth.
Co-author of the study, Professor Craig Osenberg, from the University of Florida, confirms tree planting is nevertheless a beneficial greenhouse reduction activity.
Professor Cowie said the impact of nitrous oxide and methane emissions is likely to be less significant for Australia than in wetter climates.
“These emissions are favoured in moist, fertile soils, not commonly found in Australia’s major agricultural regions,” she said.
“We also know that these emissions are lower under trees than under pasture, so as the report suggests, tree planting will still be a valuable activity.”
Professor Cowie was the only Australian among a group of top scientists who recently met in the UK to kick start improvements in global methods for estimating soil carbon and monitoring carbon standards.
Another recent separate report honed in further on the emission reduction capacity of forests.
The study, published in the journal Science, found that between 1990 and 2007, forests around the world took up about 2.4 billion tonnes of carbon per year, equivalent to about one third of fossil fuel emissions in this period.
One of the study's authors, Werner Kurz from the Canadian Forest Service says the study shows the importance of protecting forests.
“We have gotten this 30% discount on our fossil fuel emission increases in the atmosphere – if that sink does not continue to operate, then the rate of increase of CO2 in the atmosphere will go up considerably,” Dr Kurz said.
You can read Australian methodologies for calculating carbon credits at www.climatechange.gov.au/government/initiatives/carbon-farming-initative.aspx). More methodologies are anticipated in coming months.
Also in this edition
- Rebecca Lines-Kelly says four degrees hotter looks crook – let’s get cracking
- Lachlan Valley farmers chance to get into the first soil carbon trading pilot