A methodology for building a market mechanism for soil C

The following is from a paper we produced in 2008 called Soil Carbon and Measurement: Practical Solutions to Practical Difficulties.

The path to a soil carbon trading system does not appear to lie in the direction of more scientific knowledge alone. Other disciplines must be engaged, as Dr Rattan Lal declared**. Integrated teams of economists, scientists, traders and agronomists must contribute to a solution that meets the needs of the market.

The solution could lie in reframing the question. Instead of asking: “How can we measure soil carbon more accurately?”, we could ask: “How can we measure soil carbon to assure a buyer of offsets that they have achieved their objective?” The answer lies with the buyer’s objective. What are they buying? A tonne of CO2e removed from the atmosphere and stored. Does it matter to them that they are buying an ‘aggregated tonne’ from a large ‘aggregated pool’ of tonnes that have been ‘equalised’ ie., flux is statistically ‘compressed’ (peaks and troughs equalised)? The buyer buys from an aggregated pool of tonnes as part of an aggregated pool of buyers. The significant variations at individual tonne level are eliminated by statistical smoothing.

• This approach was first noted by Sandor and Skees who say that we need not worry about how much carbon is sequestered on an individual paddock, because, while estimates at an individual level may be flawed, the error has ‘typical statistical properties’ and that estimating many individual parcels and aggregating them into a single parcel will improve the estimate significantly. (Sandor, R. L. & Skees, J. 1999. Creating a market for carbon emissions. Choices 3rd Quarter, pp 13-17.)

• A similar note was sounded by the Australian Farm Institute: “if measurement or estimation systems are robust and unbiased… the aggregate result for the combined scheme will be relatively accurate due to the effect of combining many estimates together.” (The New Challenge for Australian Agriculture: How do you muster a paddock of carbon?)

• Wholesale aggregators are already commonly used in carbon markets and the system for aggregation exists. The Australian Greenhouse office already recognizes the benefits of aggregation in forest sinks, called ‘carbon pooling’. Dr Lal also sees the way forward in pooling: “[A protocol to trade C credits] will require development of routinely usable techniques to measure change in soil C pool at landscape level over a time span of 1 to 2 yr.”

• The concept is in tune with the call by Dr John Kimble for a ‘real world’ approach to soil carbon measurement, based on what is known about the behaviour of soil carbon.***

A market-driven solution: Therefore the preferred methodology is to engage buyers, traders and regulators in discussion of MMV issues and enlist their help to develop a workable system. References will be made to analogous uncertainties in other categories of abatement and GHG offset. The engagement strategy includes interviews and workshops with carbon traders, commodity market experts, statisticians, buyers, regulators, and growers. Scientists will be involved where they understand that the objective of the exercise is not precision but practical solutions. By revealing to the stakeholders the elements of systems for assessing soil C levels and their uncertainty levels, as well as the potential for using combinations of techniques, the stakeholders can gain an understanding and give considered opinions about degrees of confidence.

** “In cooperation with economists, soil scientists must develop a protocol to trade C credits.” Dr Rattan Lal, “Soil Science and the Carbon Civilisation”, Soil Science Society of America Journal, 71 (3), Sept-Oct 2007. Dr Lal is Director, Carbon Management and Sequestration Center, Ohio State University, Columbus, Ohio; Professor of Soil Science, College of Food, Agricultural, and Environmental Sciences, School of Natural Resources, Ohio State University; Liebig Applied Soil Science Award,
World Congress of Soil Science 2006; President, Soil Science Society of America.
*** Dr John Kimble: "It is often pointed out that soils have a large amount of variability, but with knowledge of soil sciences and landscapes, variability can be described and sampling protocols can be developed to deal with this," writes Dr John Kimble.47 "One reason I feel people say that soils vary and SOC cannot be measured is that we soil scientists focus on showing variability, not on showing what we know about the variability.” Dr Kimble recently retired from the US Department of Agriculture, National Resources Conservation Service, National Soil Survey Centre, Lincoln, Nebraska. "We too often focus on this [variability], worry about laboratory precision and field variation and do not look at the real world where most things are based on averages and estimated data. We tend to focus on finding variation and not on using our knowledge of soil science to describe what we know. All systems vary, but in soils we focus on a level of precision and accuracy that may not have any relevance to the real world because we can take so many samples and look at the variation." Kimble, J., "Advances In Models To Measure Soil Carbon: Can Soil Carbon Really Be Measured?", in Lal, R., Cerri, C., Bernoux, M., Etchevers, J., and Cerri, E., eds., Carbon Sequestration in Soils in Latin America, Food Products Press, Birmingham, NY, 2006