Saturday, August 15, 2009

Market expert claims Australian farmers have golden future, maybe

Australian farmers could make sales of soil carbon offsets equivalent to the income Australia makes from selling coal, according to carbon-market expert Dr Ken Newcombe, who set up the World Bank's first trading model. 'Australia could develop a trade in agricultural carbon offsets to the United States worth more than the nation’s current global coal exports,' The Land reports him as saying.
"Australia's vast landmass, the enormous opportunity to revegetate and to increase soil organic carbon in so many ways—improved land management, improved grazing, the exciting things that Australian companies are doing with micronutrient treatments and management of soils that moves away from the gross chemicalisation of agriculture—all these practices can provide a tremendous increase in root biomass and soil carbon. Australia is very well placed to produce soil carbon for the US trade. We have the opportunity, as Australians, to generate a trade in agricultural carbon offsets into the US which is the equivalent of our export of coal into the rest of the world. But it's not going to happen unless this idea of regulating agriculture is given up immediately and soil carbon offsets are seen as a potential export commodity, as well as a basis for helping regulated entities in Australia meet their obligations. As soon as that happens, you’ll see tremendous entrepreneurial vigour around creating soil carbon offsets, because the value to farmers of this trade will be very significant."
But Australia's Government has been bamboozled by 'experts' who have held back the market here. Dr Newcombe says Australia is years behind the rest of the world. The Government is mired in the quicksand of measurement, spending millions trying to trace each farmers' emissions to hit them with a bill. Led there by 'experts'."It doesn't make any sense to try and define the emissions of a huge diversity of agricultural activities and then try and regulate them," said Dr Newcombe. "At a certain point it becomes simply absurd to cover all of agriculture. In the best case, you could only cover the large agribusinesses, and not the myriad of small producers who would be shut out of carbon trading." The Government should have stuck with the principle that only businesses emitting 25,000 tonne CO2e/year would fall under the cap and trade system. He said: "Faced with that situation, in the US it was very obvious how to treat agriculture: that is to make it an offset generator and stimulate private sector investment in lowering emissions, with the beneficial result of substantial inward investment in agriculture."
Dr Newcombe pioneered the global carbon market with the World Bank-supported Prototype Carbon Fund. He has been vice chairman of Climate Change Capital in London, the largest private sector carbon fund in the world; led Goldman Sachs carbon trading division in New York, and last year founded C-Quest Capital, a company dedicated to "originating and developing high-quality emission reduction projects around the world", reports Matt Cawood in The Land.
C-Quest invested in RM Williams Agricultural Holdings on the expectation that there will be trading potential in soil carbon offsets in the voluntary carbon markets.

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