Friday, December 31, 2010
Tuesday, December 28, 2010
Michael Fraser, the managing director of AGL, has said his company will not start making investments in lower-carbon energy if the carbon price is below $30 per tonne… There is a minimum carbon price below which no real improvements in the carbon efficiency of the economy occurs, writes Michael Molitor, Visiting Professorial Fellow at the Climate Change Research Centre at UNSW, in the Climate Spectator.
"If our policy leads to a low carbon price, driven, in part, by high levels of compensation to big polluters, then the liable entities will make no real investments in de-carbonisation. They will pay the price of buying the few carbon instruments they will require to achieve compliance and make every attempt to pass on these costs to their customers. A low carbon price with high levels of compensation is, ironically, exactly what Tony Abbott called it, “a great big tax”. The result is our worst case scenario: Increased costs to consumers, and the economy in general, with no resulting carbon efficiency benefit.
"The other problem with a low carbon price is that the amount of capital required to de-carbonise our economy is tens of billions of dollars per year. The only way to move this much capital is to make it sufficiently attractive for the big financial players to enter the game. A low carbon price with a limited number of carbon instruments trading (due to the large allocation of free carbon permits as the principal form of compensation) fails to create the large liquid market conditions that attract the major financial players into the game…
"Finally, a higher carbon price will result in larger revenues to the federal Treasury. Instead of providing compensation to big polluters for the losses in the value of their high carbon-emitting assets, it would be economically preferable to use the carbon revenue to provide these companies with the capital to invest in lower-carbon emitting assets. In most cases these lower-carbon emitting assets are much more efficient and will actually save companies money."
Monday, December 27, 2010
Tuesday, December 14, 2010
1.The GIgatonne Gap: The pledges made are insufficient to cap global warming at 2 °C. Researchers say the pledges set the world on track for 3.2 °C warming.
2. IPCC getting desperate: The Chairman of the IPCC said that the world will have to take a serious look at geoengineering solutions, such as floating thousands of giant mirrors in space to deflect sunlight or dumping millions of tonnes of fertilizer or iron filings into the ocean to grow algae and sequester CO2.
3. Americans intransigent: President Bush said the American Way of Life is sacred. President Obama could not get cap and trade legislation through when he controlled both houses of Congress. It’s hard to see a day in the near future when the world will be prepared to set aggressive emissions targets.
4. World Bank gets it: The big end of town has noticed Agriculture and has discovered “Climate smart agriculture” or practical solutions for triple wins (co-benefits): adaptation, mitigation and food security. While its attention is on poor nations, the trading opportunities it is exploring would flow to farmers everywhere, based on equity.
5. Kyoto Protocols in danger: The US wants a new Kyoto based on the Copenhagen Accord, a much gentler regime.
Add to these developments the collapse of Britain’s largest Carbon Capture & Storage project into bankruptsy, and all indications point to good times ahead for Soil Carbon Credits.
Monday, December 13, 2010
In the world of Climate Change diplomacy, there are four types of ‘agreements’: a “Convention”, “Protocols”, an “Accord”, and an “Agreement”. It started in 1988 when the Intergovernmental Panel on Climate Change (IPCC) was first established to look into the problem. A large number of scientific reports sounded the alarm and in 1992 the United Nations Framework Convention on Climate Change (UNFCCC). This “Framework Convention” is an international environmental agreement aimed at stabilising Greenhouse Gas concentrations in the atmosphere at a level that will prevent dangerous man-made interference with the climate system. The convention is a legal framework, not an operational treaty. The legally binding document is the Kyoto Protocol, signed in 1997. To date 191 countries have signed and ratified it. Under the Protocols, 34 developed countries agree to bring down their emissions of gasses by certain amounts by certain times. The rest of the countries have no targets, based on the principle of "common but differentiated responsibilities." The parties agreed that:
1. the largest share of historical and current global emissions of greenhouse gases originated in developed countries;
2. per capita emissions in developing countries are still relatively low;
3. the share of global emissions originating in developing countries will grow to meet social and development needs.
The US has never ratified Kyoto. (Up until recently it was the world’s biggest emitter. China now has that honour.) The large emerging economies, China, India, and Brazil, have no obligations under the protocol. The nations gathered at Copenhagen in 2009 hoping they could get the big emitters to agree to set emissions reductions targets and be bound by them under the Protocols. The talks collapsed and from out of the wreckage a small group of nations – including America, China, and India – produced what they called an “Accord”, which is not legally binding. Nations signing the Accord pledge to meet targets and report on their progress voluntarily. But there was to be no legal obligation and no external auditing. We now know, thanks to Wikileaks, that America and China colluded together to ensure the talks failed because neither wants to be committed to targets under the Protocols. The delegates at Copenhagen did not ratify the Accord; they merely ‘noted’ it. Many were angry that the big emitters made their own arrangement and called it an “Accord”. However, to date, more than 100 nations have signed on, representing 80% of global emissions.
Which leads us to the Cancun “Agreement”. It contains much that was in the Accord, but this time the delegates have voted for it. The Cancun Agreement is important because for the first time the world’s 2 biggest emitters – China and USA - have committed to emissions targets. And for the first time the Agreement includes pledges from developing nations, who had no obligations under the Kyoto protocol. The Agreement formalises the pledges made in the aftermath of last year's failed Copenhagen talks. Crucially it did not tie developed nations to legally binding emissions cuts after the Kyoto protocol expires in 2012. Russia and Japan would not accept new targets under the protocol. They claimed it was unfair if other major polluters such as China and the US did not accept such targets.
Which means what? It means realpolitik will always decide international affairs. The big emitters are also the big economies and the big military powers. As they say, when the elephants dance the ants get off the dance floor. No amount of moral rectitude and finger wagging by Tuvalu or Friends of The Trees was ever going to bring the US to heel. Kyoto was impossible when Obama controlled numbers in Congress. Now it is even less likely. To get the Cacun Agreement signed, a decision on extending Kyoto after the 2nd compliance period runs out in 2012 was put off until 2011. Given America’s attitude, it doesn’t look good for the Protocols.
America’s chief climate envoy Todd Stern said several time before Cancun that his country will not ratify the Kyoto Protocol. The Obama Administration wanted the Copenhagen Accord to guide talks on a new treaty and urged further formalization of the Accord at Cancun – which is exactly what happened. Next year’s meeting in South Africa could see a new Protocol to substitute Kyoto, having the Copenhagen Accord as a starting point, according to Sergio Abranches, ecoblogger.
Saturday, December 11, 2010
Far from an enabling attitude, the article puts the emphasis not on the opportunity for the farmer but on ‘ensuring the highest standards of environmental integrity for any carbon offset on offer.’ Hard to argue with that Motherhood statement, but it is code for setting the bar so high that soils won’t get over.
For example, “The science needs to address soil carbon variations across paddocks, soils, and regions, as well as with seasons and climate.” To develop a system that can accommodate such complexity will take more than 5 years and be cost prohibitive when it arrives.
Finally, some good old fashioned CSIRO scare tactics: “So, for soil carbon, we need the best available tested science to avoid the situation where our children have to pay off a debt in the future, because we overstated the carbon benefit today,” says Dr Michael Battaglia. This is to make sure that if the soil carbon offsets make it through the maze, no farmer will take them up for fear of the ogres created by CSIR scientists. The CSIRO allows its scientists to comment widely outside their field of expertise, straying freely into economics and market dynamics with no expertise to support their statements. No one is suggesting that any market mechanism penalise a farmer’s children.
Why is the CSIRO so fixated on stopping soil carbon? A couple of papers from 2009 could hold a clue. Could it be that CSIRO has an ideological attitude to environmental markets?
Dr Clive Splash, an environmental economist, wrote this about offsets markets: ”The potential for manipulation to achieve financial gain, while showing little regard for environmental or social consequences, is evident as markets have extended internationally and via trading offsets. At the individual level, there is the potential for emissions trading to have undesirable ethical and psychological impacts and to crowd out voluntary action.” Dr Roger Gifford, a rangeland scientist, wrote: “…market-based C-trading schemes involving pastures [will] expose [farmers] to the risks of complicated, ill-conceived, ill-understood, poorly regulated financial instruments and arrangements that are replete with opportunity for fraudulent scams and inappropriate diversion of community wealth to the personal fortunes of scheme managers and traders, while not delivering the scheme objectives, reminiscent of those involved in the Global Financial Crisis of 2007-2009.”
Clearly CSIRO could not be seen to promote ethically undesirable activities.
1. “Putting the science into carbon offsets”, CSIRO advertorial, The Land 2 December, 2010
2. Clive L. Splash, The Brave New World of Carbon Trading, Munich Personal RePEc Archive, December 2009
3. Roger M. Gifford, CSIRO Plant Industry, “Carbon sequestration in Australian Grasslands: Policy and Technical Issues”, Proceedings of FAO workshop on The role of grassland carbon sequestration in the mitigation of climate change, Rome, 15-17 April 2009
Thursday, December 09, 2010
• reforestation and revegetation – eg. plantations, integrated farm forestry and regrowth;
• reduced methane emissions from livestock – eg. diet management, rumen inoculants, etc.;
• reduced fertiliser emissions – eg. precision application, alternative fertilizers, etc.;
• manure management – eg. composting, anaerobic digesters and methane flaring;
• reduced emissions and/or increased sequestration in agricultural soils (soil carbon) – eg. no-till cultivation, grazing management, pasture cropping, nutrient management;
• savanna fire management –eg. avoiding large destructive fires while retaining environmentally-positive use of fire;
• avoided deforestation – eg. reduced land clearing;
• burning of stubble/crop residue - eg. stubble retention/incorporated, etc.;
• reduced emissions from rice cultivation – eg. reducing water levels in paddies to reduce methane emissions;
• reduced emissions from landfill waste – eg. composting, applying compost on soils.
Carbon Farmers of Australia recommend that Farmers decide which of the activities on this list are relevant to them and take a portfolio approach to them: Revenue from offsets will be maximized and opportunities won’t be missed. A typical ‘portfolio’ of activities could include fertilizer reduction/substitution + reduced methane from livestock + reduced landfill/farm composting + soil carbon sequestration.
While the scheme is scheduled to start on 1 July, 2011, not all the options will be ready. The forestry options were trading prior to the CFI and so will start early. Other ‘low hanging fruit’ includes reduced fertilizer usage and manure management/landfill waste. The others will come on stream as they have “Methodologies” approved.
Farmers and landholders have three options:
1. Running a project of their own, gaining the approvals and reporting on their progress.
2. Hiring a specialist to manage the reporting and administration.
3. Allow an offset aggregator to include their activity with others for trading.
Example: Farmer A chooses to undertake a project to reduce fertiliser use on the farm. Finds the relevant CFI methodology, applies to the CFI Scheme Administrator to become a recognised offsets provider and has their project approved. The farmer reduces fertiliser use (by precision application or biofertiliser substitution or other method). Each year the farmer completes a report, has it audited, then submits it to the Administrator. Credits are issued into the farmer’s account in the Offsets Registry. These are then able to be sold via a broker. The farmer can appoint an agent to handle all the adminstration. Or they can join other farmers as part of a ‘aggregation’ or pool.
No Get Rich Quick Scheme
The CFI is not a get-rich-quick scheme. Instead it is an incentive program that aims to help land managers make the shift to lower emissions practices.
The Carbon Farming Initiative first saw daylight as an election promise - which could make it a fragile prospect for ever being delivered. But when seen in context, it is a sure thing (as sure as anything can be in a 'balanced Parliament' environment)... When the CPRS was defeated, Australian consumers and corporates wanting to 'abate' their emissions were offered the voluntary market in the form of the National Carbon Offset Standard. It covers all offsets not covered in Australia's Kyoto commitment - which is mainly farm carbon offsets. Alas, forestry is covered by our Kyoto commitment and its promoters were looking forward to a bonanza under the CPRS. Instead they had the floor fall away from underneath them and the forests ceased marching across the countryside. The CFI plugs that gap for forests because it applies to both Kyoto and non-Kyoto offsets. So the CFI and the NCOS fit together.
CFI… NCOS… CPRS… ETS…?
What is the difference between the CFI and NCOS and CPRS and ETS? It's simple: The CPRS (Carbon Pollution Reduction Scheme) was a proposal by the Rudd Government for a "Compliance"-based "Cap & Trade" market for emissions offsets. That is an ETS or Emissions Trading Scheme. "Compliance" means 'compulsory'. "Cap & Trade" means emitters must change their business practices to reduce their emissions to reach a target level or 'cap'.. If they cannot reach that target in the timeframe given (called a Compliance Period, eg. 2008-2012) they must purchase 'offsets' or 'permits' from emitters who exceeded their targets and earned credits by doing so, or from companies earning credits by generating renewable energy or from companies earning credits by sequestering or capturing and holding CO2 in forests. Under the Rudd CPRS scheme only 1000 companies were required to meet a target in each compliance period. They were the 1000 top emitters. They could purchase offsets from local or international companies. The NCOS (National Carbon Offset Standard) was designed to operate alongside the CPRS 'compliance' market by providing a "Voluntary" scheme. It makes available to Australian companies and consumers a source of Australian offsets that they can purchase to offset their emissions so that they can make an advertising claim that their products etc. are carbon neutral or simply to make contribution to the climate change effort by offsetting a family's emissions. The NCOS covers only domestic offsets offered to voluntary buyers. The Carbon Farming Initiative completes the set. It covers domestic and international markets, both compliance and voluntary. The only market not covered is the market that is yet to start: the CPRS or the national domestic compliance market.
Who are the buyers?
Demand for CFI credits is expected to come from foreign governments seeking to meet their Kyoto obligations, as well as companies overseas seeking to meet their obligations under national or regional schemes, such as the EU Emission Trading Scheme. CFI credits could also be attractive to companies operating in markets dominated by the voluntary market, such as Australia's traditional trade partner Japan. One important category of buyers not mentioned in the Consultation Paper are consumers overseas who are fans of the country and have a soft spot for Aussie farmers. Back at home, some companies need offsets to meet obligations where State Governments have introduced their own compliance schemes.
Methodologies: Make Your Own
A “Methodology” is a step-by-step plan for helping farmers earn offsets. There is no limit to the number of Methodologies, because the Carbon Market is a free enterprise system. Individuals are free to trade with each other, so long as they don’t break the law. The Government is developing methodologies, with the help of industry. Private project developers can also design their own.
A Methodology has the following parts:
1. A description of the activities that will either avoid emissions or capture greenhouse gasses. The carbon sinks and carbon sources touched Eg. soil, livestock.
2. How the baseline (starting point) and amounts of Greenhouse Gases removed or avoided.
3. How buyers can be reassured that the activities in one location don’t create more emissions somewhere else.
4. How the performance of the program will be measured.
5. How the project will be monitored.
The decision to approve a Methodology is taken by the Minister for Climate Change and Energy Efficiency on the advice of the members of the Domestic Offset Integrity Committee - an independent expert panel appointed by the Government.
Integrity Standards Under Review
The Carbon Farming Initiative Consultation is just that: a Consultation. Your input is requested. The paper includes “Integrity Standards”. They are a list of ‘rules’ that are proposed to give buyers confidence that the abatement offsets they are buying aren’t just smoke and mirrors – that they are real. These rules include:
Additional - the emissions saved or extracted would not have happened without the offset, but are genuinely additional to other efforts.
Permanence – the emissions saved or extracted are not released for the period of the active life of the particular Greenhouse Gasses, eg. CO2 – 100 years
Leakage – the project does not create increases in emissions somewhere else that cancels out the inititial saving.
Measurable and verifiable – all activity must be accurately measured or estimated; each offset credit must stand for one tonne of CO2-e; auditing must be independent.
Conservative – assumptions, figures, and measurement must be conservative to avoid over-claiming.
Internationally consistent – methodologies and reporting practices aligned with those adopted by the United Nations Framework Convention on Climate Change.
Supported by peer-review science – scientific evidence submitted must be ‘peer-reviewed’ which means it has been approved by other scientists in the same field as those doing the research and that it has been accepted for publication in a scientific journal.
Integrity Standards Vs The Urgency
The Integrity Standards focus on making the transaction possible by making sure the consumer is confident that they are getting what they paid for. No confidence, no market, no abatement, no sequestration of CO2. It’s as simple as that… when you look down on end of the telescope and all you can see is the transaction.
Turn the telescope around and you see the global impact of 6 million farmers changing their practices to begin drawing down billions of tonnes of CO2. Some of the world’s leading scientists say that we need as many farmers as possible sequestering as much carbon as possible in their soils and vegetation as quickly as possible because there is little chance that global warming can be held to a increase of less than 2°C without it. They are saying that the rate at which clean energy infrastructure can be built compared to the rate at which global demand for energy will grow make it now impossible to meet the 2°C target without a big soil carbon component.
Scientists, including the world’s most famous Climate Change scientist, NASA’s James Hansen, agree that renewables will not be ready to supply the world’s energy demands for up to 50 years, if then. In Smart Solutions to Climate Change, Chris Green of McGill University and Isabel Galiana look at current rates of progress and conclude that by 2050 alternative energy sources will produce less than half the power needed to stabilise carbon emissions. By 2100, the gap would be even wider.
Australian scientists point to soil carbon as the solution: “It will be next to impossible for Australia to achieve the scale of [emissions] reductions required in sufficient time to avoid dangerous climate change unless we also remove carbon from the atmosphere and store it in vegetation and soils,” the Wentworth Group of Concerned Scientists told the recent Victorian Inquiry into Soil Carbon. Even the CSIRO agrees Dr Michael Battaglia, Theme Leader, Sustainable Agriculture Flagship, CSIRO told the inquiry: “What [soil carbon sequestration] actually gives us is time to make those adjustments [transition from burning coal].”
Emissions reductions won’t slow down the process of climate change because they are your Grandfather’s emissions - the carbon released into the atmosphere 70 years ago - that are causing Global Warming. Luckily, we have the only process for Extracting billions of tonnes of CO2 every year for 50 years, fully deployed and scaled up, ready to start: Photosynthesis, in the form of 5.5bn hectares of farmland around the globe. Scientists such as soil carbon authority Professor Rattan Lal estimate the process can remove 3billion tonnes of CO2 annually for 50 years. He testified before the US Senate that soil carbon can be a “bridge to the future” that “buys us time”.
James Hansen and Rattan Lal agree that the world’s farmers can draw down the CO2 equivalent of 50ppm and hold it for 50 years. With the globe racing towards 400ppm, hoping to stop it at 450ppm (to hold the increase to 2°C), soil sequestration is attractive and available and relatively cheap. It would forestall the need for deeper, faster cuts in the future and it would protect the economy from damage. So why is it not activated immediately? Because people are looking down the wrong end of the telescope.
Remodelling the Integrity Standards
The Department of Climate Change & Energy Efficiency uses the current Kyoto definition of Standards such as Additionality as a starting point for innovation. The Consultation Paper makes this request: “Stakeholders are invited to comment on this approach to assessing additionality and whether alternative approaches should be considered.”
Carbon Farmers of Australia has set out its response to the Integrity Standards under the following headings:
Standard – current definition
Questions arising from current definition
Principles on which Standard should be redefined
Suggested Action Points
This is an important opportunity which should not be missed. Email email@example.com or a copy of our submission. Please feel free to comment on, add to, strike out, disagree with… what we have proposed.
Wednesday, December 08, 2010
Australia is world standard in having gaps in the data: among the “significant knowledge gaps” facing global agriculture is listed “the potential of carbon sequestration” and the need is for “interdisciplinary research that draws on the best of traditional knowledge and science to achieve more sustainable food and farming systems.”
We call it “Collaborative Science”.
Meanwhile, over at the main stadium where ssues such as emissions reductions targets and renewable energy occupy all the time of the big players, smaller issues like food and water are being noticed: “UNFCCC negotiations now recognise the
importance of food security, adaptation and productivity enhancements for agriculture…”
The Agday meeting – attended by 400 delegates from diverse organisatons - declared the following actions urgent if first order agricultural issues are to be integrated into the global action plan: 1. “Fast track financing” to support agriculture adaptation and mitigation activities.
2. Action on food security must be included in any post
2012 agreements. 3. Forestry programs (like REDD+) should recognise the links between agriculture and forestry, and promote sustainable agriculture intensification and reduce deforestation, while improving rural livelihoods. 4. Trading mechanisms such as the CDM need to include agriculture.
The Communique ended with a plea for partnerships between public and private sector, especially farmers, and civil society organizations. “Building bridges between scientific and traditional knowledge is the essential starting point for success.”