Digging Deeper into Carbon Trading

So one of the things that I was really keen to look at while I was over here in Australia was the whole issue of payments for sequestration. It was something that we are nowhere near in the UK, and Australia is leading the way in terms of having a methodology that is approved by government and accessible by farmers.
The person who is leading the way in this is Terry McCosker, and his company Carbon Link. Carbon Link has been set up to help farmers navigate their way through the (incredibly complicated) process of becoming a trader in carbon.
Here in the UK soil carbon is a fairly contentious issue, with scientists for the most part yet to prove a conclusive link between management practices and an increase in sequestration rate. The science is pretty conclusive if you convert an arable field into long term grassland (the soil carbon goes up) and the same happens if you convert a grass or arable field into growing trees. However where there hasn’t been agreement, is the impact within your production system (for example arable or grassland) of changing management; of whether there is a link between no till systems and building soil carbon, or whether if you practice rotational grazing or plant diverse pastures, you are sequestering carbon at a greater rate.
When I asked some of these questions to Terry, he was completely clear on his position. “There are two issues,” he explained, “firstly, farmers are way ahead of the scientists, in terms of what they are doing.” He has farmers who (like some of ours in the UK) are seeing a complete revitalisation of their soils by changing management practices. “The soils are completely alive, “ he explains, “the improvement comes not just in the increase in organic matter content, but also in helping the biology in the soil do what it was put there to do.” Secondly, the issue is that we aren’t measuring to the correct depth. “Most research, stops measuring at 30cm,” he explains, “and the changes happen much deeper than that, we need to be measuring down to 1m or 1.5 metres to see the impact.”
The deeper depth of the measuring comes at a much higher cost to the farmer, as to enter into the scheme, baseline monitoring needs to happen. This baseline monitoring involves taking a soil sample every 5cm down the soil profile to either 1 or 1.5 metres and assessing bulk density and soil organic carbon measurements. Each field has 9 sample sites within it which are GPS logged. Once the baseline of the farm has been measured, the farmers can start sequestering carbon. Every5 years the fields are measured again, and after each 5 year period, the farmer needs to change management again.
The basic process is:
Year 0 – complete baseline measurements, and contracts etc
Years 1 – 5 – farm as normal, including the management that you are doing to improve the level of sequestration (there is a list of practices that you can choose from in terms of what you want to adopt).
Year 5 – soils are retested, and you are paid on the amount of carbon that you have gained.
Year 6 – you adopt another management practice for the next 5 years.

And so the cycle goes on, at the moment the agreements lock the farmers into doing it for 25 years, and the payments is guaranteed for 10 years (and then renegotiated).
It’s a fairly complicated process and one that costs a lot to get involved in, with no payments being received by the farmer until year 5. I was also interested in how you take the risk out of a biological system, where the rate of carbon that’s sequestered can go up as well as down (especially in the varied weather conditions in Australia). I also wanted to know, how he was recruiting farmers to enter into this given the inherent level of mistrust of the government and its policies by most farmers.
Here is where it got interesting. Terry McCosker also runs a consultancy firm called RCS, which delivers the Grazing for Profit course (which Charlie Arnott, who I wrote about in an earlier blog, explained was what caused the paradigm shift in his management).
I asked Terry whether he thought that there was a link between RCS and its success at helping farmers make the most of their grass and understand business management and the uptake of farmers into carbon trading and the new schemes. “Absolutely,” he explained, “these farmers are my clients and they trust me, I’ve delivered results for them in the past. As such, although it is still a big leap of faith in terms of investment and a level of trust in the policy systems, they trust me.”
Some of the other farmers that I spoke to that weren’t in the trading scheme, were watching this space to see what happened with some of these early agreements. They were of the opinion that it was progressing, it would definitely be part of future policy and that they would be including land in the future.
It also may provide a favourable option for those who are looking to invest in farms, if they can buy farms that have fairly degraded soils, the use of management to improve them, could prove pretty lucrative. And this also works in reverse, those that have been involved in safeguarding and building their soils for a few years, those pioneers in this area, miss out on the payments, as they are further down the line so can’t see such a big improvement in the levels sequestered.
But, according to Terry, here’s the secret, there is no limit to the amount of carbon that you can sequester, its all about how you measure it. Traditionally here in the UK, we have always reported carbon in terms of a percentage soil organic carbon (which is subtracted from the soil organic matter percentage). However, apparently this is the wrong way to go about it, is all about tonnes of carbon sequestered. As such, you never reach an equilibrium, once you have filled the top 30cm, you start building more stable carbon deeper in the soil, and when that is full, you build it on top.
This is completely different to the way that I have conventionally thought about it, and it blew my mind slightly! Certainly the rest of the world’s focus is on Australia over the next 5 years, and these farmers who are pioneering the system. The scientists are also watching closely, with (from what it seems to me) a secret hope that it doesn’t work and they are proved right!
All of them also understand the wider benefits that building soil carbon has. One of the research organisations here worked out that the carbon price is $12 a tonne, but the value in terms of the wider ecosystem services of that carbon is more like $200 a tonne. As such, even if the scheme doesn’t work in terms of its current methodology and process, there is a benefit to these farmers, I just hope they see it, (and also I hope the methodology does work).

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