Wednesday, January 28, 2009

Will the Government abandon Agriculture?

Here is a quick summary of what the Government intends to do to Agriculture with its Carbon Pollution Reduction Scheme:

1. The Wong bases its system on covering the 1000 big emitters and the rest of the community contributes when they pay higher costs for products and services from these Big Emitters. A “Big Emitter” emits 25,000 tonnes CO2e per year.

COMMENT: Agriculture has few operations that emit this amount. It has between 100,000 and 130,000 operations. But because this Government wants to include Agriculture in the Scheme so it bends the rules and declares that Agriculture is a “Big Emitter” as a sector of the economy. This belief is based on the volumes of methane released by ruminant animals (cattle, sheep). The Government is confident that it can measure the methane emitted by the entire national herd or flock, but it cannot measure the methane emitted by ne herd or flock. This is the reason it gives for delaying the entry of Agriculture into the Scheme: “The agricultural sector is characterised by thousands of small emitters and the calculation of emissions is complex, so it would not be practical at this stage to cover those emissions directly.” And again: “Estimating agriculture emissions is complex. These emissions are highly variable in response to management practices and climatic conditions. How can the Government know the volume of methane emitted by all the herds and flocks together and not know what each group of animals released?

2. It will delay Agriculture’s entry into the Emissions Trading Scheme until 2015. It will decide on whether the sector is “In” or “Out” in 2013.

COMMENT: This impacts people in Agriculture in the following ways: Even though we’re not “In” for purposes of reducing our emissions (and presumably balancing them with our soil carbon), we are “In” because we are paying higher costs from those industries that are “In” and those involved in processing their produce (eg. dairy) will be responsible for the emissions from these operations. The deadly difference between those industries covered by the Scheme and Agriculture is this: they can simply pass the increase costs on. We can’t. (In Government circles there is a belief that we can simply “pass it on at the sale yards”.)

But an even more striking decision has been taken by the government. It has decided not to engage agricultural soils as a major sink in the "Decade For Serious Action", declared by Sir Nicholas Stern in 2006. By not bringing Agriculture into the scheme until 2015, the Rudd Govern.ment is electing to ignore the soil carbon solution altogether or to put off engaging it for seven more years.

3. If the Government can’t find a way to overcome the measurement and cost of compliance issues by 2013, it says it will find other ways for Agriculture to contribute. It will impose a tax or some regulation on farm activities. Despite the belief among national industry representatives that simply reciting a long list of difficulties and pleading for more time and more research, Agriculture will not escape attention.

COMMENT: If the Government decides in 2013 not to cover Agriculture emissions in the Scheme, it will consider alternative mitigation measures. “To ensure that the agriculture sector makes an equivalent contribution to other sectors, the Government is disposed to apply mitigation measures that result in costs similar to those under the Scheme. For example, if the carbon price was $25 per tonne of CO2-e, the Government would seek to mandate the use of mitigation technologies or practices in the agriculture sector with the intention of achieving a cost of around $25 per tonne CO2-e.”

4. Agriculture will not be involved in trading soil carbon, if the Government has its way. The White Paper sets it down clearly: Agriculture will not be able to produce and sell offsets when it is not covered and also when it is covered. No reason is given for this decision.

COMMENT: Even though it is not covered by the CPRS, and the White Paper says: “Offset credits could potentially be created by those sectors not covered by the Scheme”, it also says: “The Scheme will not include domestic offsets from agriculture emissions in the period prior to coverage of these emissions.”

5. If it is unable to include Agriculture to account for its emissions ‘on-farm’ because the cost of measurement is too high for individual farmers, the Government favours a system which sees them pay for their emissions by paying more for inputs like fertilizer (with the fertilizer retailer paying for the N2O that will be emitted when the fertilizer is applied) or getting less from buyers (the buyer paying for the amount of methae the animal produced during its lifetime). That is, the points of obligation are ‘off-farm’, at a point before or after the farm in the supply chain.

COMMENT: The amount of N2O the farmer actually released while applying the fertilizer would vary significantly depending on the application method, the time of year, and the weather conditions. Therefore the degree of uncertainty is extreme. The system is also unjust because the Farmer is the only one in the chain who cannot pass on increased costs.

6. The Government is reluctant to include Article 3.4 that allows countries to include the soil carbon they can sequester in their national accounts because the Kyoto rules say that a country has to be responsible for all emissions – man-made and natural causes – if it wants to count its sinks. This would make Australia would have to pay credits for emissions from drought and bushfire.

COMMENT: The Government agrees that the Kyoto rules do not reflect reality in Australia and took a paper to the Posnan Meeting of the Kyoto participants in late 2008. However it has not taken a hard line, as Australia did in the first round negotiations and as other nations have, threatening to withdraw if discriminatory and illogical rules designed to suit European countries are not changed. The Federal Government rushed in to ratify Kyoto, losing the opportunity to win concessions.

7. The Government relies upon its out-of-date data in the National Carbon Accounting Scheme to support its decision to leave soil carbon our by choosing to exclude Article 3.4. The mythical difference between Australia’s soils and those of the Northern Hemisphere is used to support the erroneous statement that our soils have lower potential for sequestration.

COMMENT: “Scientific research conducted in Australia suggests that, while there are opportunities for increasing and retaining agricultural soil carbon, Australia does not have the same sequestration potential as other countries, and there is significant risk of loss of soil carbon in times of drought or changed management practice.” The weakness of this statement can be revealed by three facts: 1. The carbon rich soils of Europe and North America have less ‘potential’ to sequester than Australia's because they have more already. Ie. their bucket is almost full while ours is nearly empty. Dr YN Chan says Australia has lost 50% of its soil carbon, but we can put it all back. 2. The best soils in the Northern Hemisphere have their equivalent in Australia and vice versa. You will find arid soils in Spain and Montana. 3. The “Potential” of Australian soil has not been measured by scientists, only “actual performance”. And the performance of the soils under all known land management techniques has not been measured. So we are ignorant of the soil’s potential. Therefore the rationale for not opting for Article 3.4 is not robust.

8. Farm forestry is “In” and enjoys a tax break because the Government favours a shift in land use from agriculture to forestry because it is a shift towards less emissions-intensive activities that ‘would reflect an efficient allocation of resources taking into account the carbon price.’ The Government believes new forests would be established ‘on more marginal or less productive agricultural land’. Water interception will be avoided by new management practices that the Government will put in place.

COMMENT: This issue reveals the Government’s blind belief in the primacy of emissions reduction over agricultural activities and ignorance of the way rural societies amd economies fit together. The Department of Climate Change either ignores or cannot understand the impact on the market value of land when there is no carbon price for soil but a carbon price for trees. The distorted market will not allocate of resources efficiently. Further, forestry promoters do not settle for marginal land. Finally, the DCC’s policies are depopulating the bush and deepening the depression suffered by many in rural communities.

9. The Government in the White paper is determined to give no ground to Offsets, thereby threatening the “market” mechanism as it operates in other countries and putting the entire Voluntary Market at risk. It appears to have adopted a “Dark Green” position on Offsets. Dark Greens do not like them. The White Paper’s authors make every argument against them while conceding nothing in their favour. This is an ideological position. It adopts the language of the WWF* as well as its arguments: “Offset Schemes are administratively complex and require considerable judgement to determine baselines—‘what would have happened in the absence of the offset project’. Determining these baselines is inherently subjective, increasing the risk that the Scheme does not promote genuine abatement.”

COMMENT: The following list of reasons why offsets are not to be allowed reveals a Government desperately scraping thebottom of the barrel for arguments: Argument 1.: “Scheme offsets could be used interchangeably with pollution permits and would, therefore, need to meet internationally recognised standards. These require that offsets are only issued for abatement that is measurable, has actually occurred, is additional to business-as-usual and is permanent (that is, is not subsequently reversed). Offsets therefore involve relatively high compliance costs both to project proponents and to the Scheme regulator, for approving, monitoring and verifying each offset project to ensure that abatement meets the required standards.” (Comment: All schemes operate in this way.) 2.: “Domestic offsets could only come from emissions sources that are outside the Scheme. The very broad sectoral coverage proposed for the Scheme means that there is inherently less scope to pursue offset activities.” (Why not let the market decide these things?) 3.: “Further, the Government has indicated that, where practical, it will apply alternative mitigation measures to sources of emissions that can not be covered or are likely to remain outside the Scheme for an extended period of time.” (The cap and trade system does not mean all emissions are covered from day 1. Some emitters may ant to buy offsets to cover their balance and become ‘neutral’.) 4.: “Offsets could only be issued for abatement that is additional to such measures. The scope for domestic offsets from uncovered sources is, therefore, likely to be very limited.” (Additionality has many dimensions, and it has not stopped a vigorous market growing in many countries.) 5.: “Domestic offset projects would not add to total national abatement because offsets would be issued in addition to the Scheme cap and would therefore allow an increase in emissions within the Scheme.” (This is not true. Many companies buy offsets to volunariliy reduce their footprint.) “In other words, offset projects outside the Scheme would allow less abatement to be done within the Scheme and, other things being equal, would reduce the price of permits. However, the cost of reducing emissions would still be borne by firms whose emissions were covered by the Scheme.” (The cap does not eliminate all liability. And offsets are not used to escape responsibility anywhere except in the imagination of an extreme green ideologue. In fact, this statement comes from a WWF publication.)**

10. “There are likely to be important opportunities to increase the carbon stored in agricultural soils.” BUT the White Paper takes the most pessimistic view of the possibility that the world’s most highly respected soil carbon scientist is right: Soil carbon sequestration is the only hope we have to blunt the most extreme impact of Climate Change: “C Sequestration in soil and vegetation is a bridge to the future. It buys us time while alternatives to fossil fuel take effect.” - Dr Rattan Lal, Director, Carbon Management and Sequestration Center, Ohio State University, Columbus, Ohio, IPCC Lead Author

The White Paper makes no attempt to address one dominant reality: That soil carbon is the only realistic option the world has to manage the transition to the new cllmate regime. The climate chaos the world is experiencing is caused by CO2 already in the atmosphere, released over the last 100 years. The Legacy Load is big enough to drive the globe through the critical 2°C limit and into calamitous results. None of the following can extract The Legacy Load because they can only deal with avoiding future emissions, not absorbing past emissions: • Clean Coal technology • Solar energy • Wind energy • Thermal energy
• Tidal energy. Only photosynthesis can absorb CO2 from the atmosphere but only one of the following can extract the Legacy Load within the 10 year time frame that Nicholas Stern gave the world to do something serious about climate change (2 years ago): [ ] Biochar –technology and cost issues [ ] Forests – would take more than 10 years to plant [ ] Algae – technology problems not yet solved. [ √ ] Pasture grasses and crops – 5.5bilion hectares ready to start tomorrow.

Agricultural soils have critical mass and massive capacity already deployed. If each hectare was to capture only 0.5 tonne of carbon per hectare per year, we would extract more than the 8.7 gigatonnes the world emits each year. There would be extra capacity to absorb the Legacy Load. The Earth can absorb carbon for 25-30 years. But this gives the other solutions listed above time to reach critical mass. Farmers must be given a strong reason to change the way they manage their soils. So that they capture carbon. It requires a 180° change from conventional farming. Carbon Credits for soil would be sufficient incentive. Agricultural offsets. Which the Government refuses to allow.


* “A major limitation of offset systems based on project-based mitigation is that emission reductions have to be measured against a counterfactual reality. The emissions that would have occurred if the market for offsets did not exist need to be estimated in order to calculate the quantity of emissions reductions that the project achieved. This hypothetical reality cannot be proven; instead, it must be inferred and its definition is always to some extent subjective.” - Anja Kollmuss, Helge Zink, Clifford Polycarp, Making Sense of the Voluntary Carbon Market: A Comparison of Carbon Offset Standards, WWF, March 2008

**”If they can buy offsets and these come from projects that are fully additional, then the offsets replace reductions that the cap-and-trade participant would have had to otherwise achieve himself. In other words, under a cap-and-trade system, offsets do not lead to emissions reductions beyond the target set by the cap but only cause a geographical shift in where the emissions reduction occurs. Therefore, non-additional offsets sold into a cap-and-trade system will actually lead to an increase in emissions since the buyer will not have reduced his emissions and the seller will not have offset this increase in emissions.” - ibid

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