Let's get serious about soil carbon
POLITICIANS of all persuasions have had a hard time being nice to farmers in ways that don’t upset larger, more vociferous and vindictive sections of the voting public.
In this campaign, they seem to have discovered the key: carbon!
The hype from both major parties is that they - and only they - are pulling the levers that will release rivers of black gold toward farmers’ bank accounts.
But between the hype and the reality of meaningful farm returns from carbon credits is a whole sea of “ifs”.
The most pregnant of these “ifs” is how much life there will be in an emissions trading market that isn’t backed by the big stick of regulation, eg. an emissions trading scheme.
That’s particularly true for soil carbon, the biggest opportunity the country has for carbon sequestration, but an opportunity full of knots.
The parties have gone out of their way to confuse the issue by floating plans that reverse their traditional ideologies.
The Coalition wants nothing to do with “the market”, and instead proposes a voluntary scheme built around government-managed carrots. The Coalition government will set emissions pricing and control carbon credits.
More than half of the greenhouse gas reduction the Coalition is aiming for by 2020 is to be driven by farmers sequestering carbon in soils - up to 85 million tonnes of it each year.
The Coalition has assumed it can drive this charge into soil carbon with offset prices of $8-$10 a tonne. Therein lies the biggest “if” of its plan.
Various economists and soil scientists have publicly doubted that these prices will drive enough activity; certainly to the volumes aspired to. (There is also a school of thought that thinks with higher returns, 85 million tonnes a year could be conservative.)
Meanwhile, Labor has amputated part of its market-driven CPRS and reinstated it as its Carbon Farming Initiative.
The initiative will be Kyoto-compliant, allowing carbon credits to be traded overseas, so carbon prices could be higher across the board under Labor’s plan. That’s promising for farmers who aim for carbon credits through Kyoto-compliant strategies like forestry or herd productivity.
Not for the soil carbon fans, though: the Kyoto rules we’re operating under push soil carbon out of Labor’s headline plan.
But soil carbon trading is still an option under Labor.
If (another “if”) a soil carbon measuring methodology gets through the Government’s Domestic Offset Integrity Committee, soil carbon will be tradeable on any domestic voluntary market.
Which leads back to the question; how much will soil carbon - any carbon - be worth in an unregulated market? (More “ifs”: will the market want soil carbon and some of its inherent uncertainties. Will farmers?)
The world’s oldest voluntary carbon market and soil carbon trader, the Chicago Climate Exchange (CCX), isn’t encouraging. CCX prices have fallen from highs of over US$7 per tonne in 2008 to just 10 cents on the failure of the US government to ratify an emissions reduction policy.
While soil carbon is only tradeable on the voluntary market, it seems unlikely that it will deliver any monetary riches, at least to the average family farmer on average land.
But the real prize from soil carbon isn’t in carbon credits.
The real prize is increased farm productivity, climatic resilience and reduced erosion, cumulatively worth far more to the nation than soil carbon credits could ever be.
If the next government really wants to get agriculture into the carbon business, it might therefore think about establishing a floor price for soil carbon (after working through a few trading and measurement wrinkles). The objective should be to keep farmers up at night working out how to get carbon into their soils, and getting the wonks serious about methodology.
There might be a cost, but the nation will be ultimately much richer for it.
And meanwhile, the next government might work on that other little problem: climate change.
On this issue, Australian politics has so far delivered what amounts to tying a pretty red bow on a homicidal bull mastiff. What’s needed is the policy version of a shotgun.