Carbon Farming: “Show Me The Money”

“By farmers, for farmers” is our motto. We are farmers. Everything we do and have done in the past 6 years ago to get a market started has been to see farm carbon offsets traded and farmers paid fairly for carbon captured and emissions avoided. Carbon farming is now law. The next task is to make sure farmers will want to get involved. Farmers are saying: “Show Me The Money”. This ‘quick-read report’ tells you about 5 ways we are doing this.

The Money Tree – The first CFI activity available to the average farmer is environmental plantings. To make it easier for landholders to come to grips with this opportunity we are working on a guidebook called The Money Tree which translates the ‘meth’* into simple ‘how to’ language. It looks at the CFI planting opportunity as well as other ways to make money from trees on farm. Out soon.

Opening the Market – Carbon Farmers of Australia has opened an account on an offsets register (Markit Environmental Registry, a robust global registry to provide transparency and credibility) which enables us to assist landholders to sell their offsets. We have also opened an account with the Carbon Trade Exchange so we can purchase offsets on behalf of organizations wanting to ‘go Carbon Neutral’. And we are applying to the Australian Securities and Investments Commission to be registered to provide financial services in emissions units.

Soil Carbon Methodology News – Our ‘meth’ has been before the expert panel** and we are working on responding to its requests.  We are almost ready to go back to them, once we have nailed the measurement of methane by fitting in with the National Inventory Report methodology (which is designed to report Australia’s National Greenhouse Accounts to the IPCC rather than to measure one farm’s emissions). We are in touch with others working on other soil carbon meths. And we have been told that ‘the Department’ is developing protocols for measurement of soil carbon. (There are at least 3 scientists working on seperate measurement solutions.) It’s the Holy Grail of soil science. There are some fascinating facts about how wool is measured. (See below.***) The most important feature of our meth is the way it uses the wool industry’s solution to a similar problem to ‘defang’ the 100 Year Rule, which we believe removes a major barrier to farmer involvement.

Positive List News – For a land management activity (such as bioferts or tillage innovations) to be part of a CFI methodology so farmers can use it to earn offset credits it must first be accepted onto the Positive List. This is a list of activities that the Government has accepted as “Additional” (or capable of producing genuine abatement). If the activity can prove that it is not “common practice” (adopted by less than 5% of farmers in a market or location), it could be accepted for the Positive List (so long as it is not on the Negative List). We are assisting several innovators to prepare their submissions because we believe the more options that farmers have, the more farmers will get involved.

Going Carbon Neutral – To help build the market for CFI farm offsets in the voluntary market, we are offering companies wishing to go Carbon Neutral guidance to achieve that goal. Our first client is a bulk haulage company in regional NSW. The process is complex and difficult, but so is everything else to do with the CFI. We have established the baseline, estimated the changes the company will make to reduce emissions, identified the offsets to be purchased to bridge the gap, had a site visit by the verifiers (GHD – one of the world’s leading environmental auditors) and we are responding to their recommendations next week.

Don’t Be Put Off – For every negative you might hear about the CFI there is a positive that is not being mentioned. (See an example below.****) The CFI is about innovation which means solutions to problem. The negative voices are not involved in the CFI processes.  The positive are inside the process, making it better.

Your Questions – There is a lot to be confused about in the CFI, especially in the “show me the money” issues.. Call 02 6374 0329 or email with your questions.

* A ‘meth’ is a methodology or set of rules a farmer must follow to make money from the CFI.

** The DOIC – Domestic Offsets Integrity Committee. In the period between the return of our meth and our response the Interim DOIC has been replaced by the Permanent DOIC, which has at least three new members who have soil/agricultural expertise, including the Chairman Professor Timothy Reeves an international consultant with expertise in the development and extension of sustainable agricultural productions systems and crop-livestock integration. He is a Professorial Fellow at the Melbourne School of Land and Environment, a director of The Future Farm Industries Cooperative Research Centre, was a Senior Expert for the Food and Agriculture Organisation of the United Nations (FAO) and was formerly the Director-General of the International Maize and Wheat Improvement Centre. Professor Lynette Abbott is the Vice Dean of the Faculty of Natural and Agricultural Science and Professor in the School of Earth and Environment at the University of Western Australia. Dr Tony Press was the Director of the Cooperative Research Centre for the Sustainable Development of Australia’s Tropical Savannas.

*** Like carbon in soil, wool is an extremely variable commodity. A 21 micron wool may have a spread of fibres from 11 microns to 37 microns, according to the Australian Wool Testing Authority. “Wool is an extremely variable commodity and wool testing is used to provide an estimate of its properties based on a sample taken from the bulk. Because wool is variable, no two samples are the same.” To overcome the problem buyers would have wit uncertainty, the industry used a statistical device called the Coefficient of Variation of Diameter. It is a measure of the variation in micron measurements along and between individual fibres, relative to the average (or mean) fibre diameter.” The precision of an individual test result is usually expressed in Confidence Limits. Normally, the precision of a test result is defined in terms of 95% Confidence Limits, i.e., the limits on either side of the "true" result within which you can expect 95% of any repeat measurements to lie.

**** You might get the impression from some presentations about the CFI that the odds are you would be paying back offsets you earned because fire wiped out your trees. The facts are these: Between 2001 and 2005, only 2.5% of Australia’s forests were impacted by wildfire each year. The odds are 37 to 1 of a fire event. The majority of wildfires do not kill the trees. The CFI requires that dead trees be replanted. The odds of that happening are far longer than you’d get on a roughie in the first at Randwick next Saturday, not Black Caviar’s @ $1.10, which is the impression given by some presenters. (For more read Top 15 Questions about the Carbon Farming Initiative.)

Not enough time for action on the ground?

It may have been listed last in the priorities for the Government's Action On The Ground research program when it was launched last year, but soil carbon projects made up 40 of the 60 research trials announced this week. The balance of the projects sharing in $25m released for farmer-driven research focus on nitrogen emissions from soils, methane emissions from stock, a biochar and an algae project in round one of the program covering 2012 to 2015. Action on the Ground is designed to assist the on-farm trial and demonstration of practices and technologies to reduce greenhouse gas emissions and/or increase carbon stored in soil. It is an ongoing program that will invest $99 million until 2017. It's to be hoped that the soil carbon projects get round two funding because three years is too short a period to demonstrate soil carbon from scratch. This was pointed out to me by a very senior soil science academic. The same problem faces the Soil Carbon Research Program which was launched in 2009 and is due to report next month. Nevertheless, it is an exciting time for sustainable agriculture.

How to eat an elephant (or engage with the Carbon Farming Initiative)

You eat an elephant one bite at a time. And so it is with the Carbon Farming Initiative. Here is a safety-first path for farmers who want to take advantage for this one-in-a-generation opportunity. It is a toe-in-the-water approach for maximum risk management and learning by doing. Step 1. Trees on farm. Identify a small area that could benefit from planting native trees. It could be a recharge zone causing salt expression further down the slop. It could be a erosion zone that needs to be stablilised. You could chose to plant 10ha-20ha, but make it part of a larger plan for your farm, a plan you could execute as you become more comfortable with the process. Step 2. Reduction in nitrous oxide emissions from fertiliser application. (At least two methodologies should be available later this year.) This can be done in any number of ways: straight reduction in NPK fertiliser; shift to precision application; part-replacement of fertiliser by bioferts; full replacement of fertiliser with biofert. Step 3: Reduction in methane emissions from livestock. (Methodology coming.) Step 4: Soil carbon sequestration. By this time you have had a chance to get used to the culture of the CFI - measuring and reporting on the activities; the concept of 100 Years; the production benefits of soil carbon, etc. You earn instant offsets for the emissions avoidance activities (nitrous oxide and methane) and delayed offsets (eg. 5 years, etc.) for carbon captured and held in vegetation and soils. This is just one example of the way you can take a staged approach to building a carbon farming portfolio. It is entirely voluntary. Your commitment deepens slowly so you can retreat early in the process. As you get closer to it, your elephant will shrink.

Could you be on the Positive List?

Could your product or practice be eligible to appear on the Carbon Farming Initiative Positive List? Companies and individuals who have innovative carbon farming practices or products that reduce emissions or sequester carbon can apply. The benefits for you are these: 1. Being on the Positive List certifies that your product or practice is not common practice and that emissions avoided or sequestered via them have been declared "Additional" by the Minister. 2. Being on the Positive list means your product or practice can be used as part of a 'methodology' for a offsets project under the Carbon Farming Initiative. (The Government recently announced grants to help innovators write up their brilliant products and practices into methodologies (or "meths"), with the help of scientists and other experts. 3. You could earn royalties every time your innovation is used, if you have genuine intellectual property in your "meth". Go to the Positive List page on the Department of Climate Change and Energy Efficiency website, download the Positive List Guidelines and the short Positive List Proposal Form and fill it out. It is easy to be confused. For instance, the Guidelines state that offsets "will not be available for projects that are required by law" in one place, and "activities that are required by law" will be listed "in some circumstances"in another. So, if your product or practice is mandated by regulation, don't let that stop you. Contact the Department of Climate Change and Energy Efficiency on (02) 6159 7000 to ask what those "circumstances" are. The other barrier to listing is "common practice" - ie. if the activity is already widely adopted. It is assumed that once between 10% and 30% of landholders in a location or industry or "environment" have taken up the practice - in order to earn offsets - the balance will adopt it without the incentive of the offsets and therefore the emissions avoided or sequestered resulting would have happened anyway and are therefore not additional. An activity can be uncommon for all sorts of reasons: it is unusual in certain regions; it is unusual on the scale proposed; it is unusual at a particular time; it is a genuine variant of an activity. "The activity must be carefully defined to allow for an accurate assessment of whether or not it is not already common," says the Guidelines. This means you should be very specific defining your activity. It is recommended that you identify a relevant comparison group of non-users to "capture the circumstances in which the activity is uncommon". The Government will be surveying farmers every couple of years to get a picture of penetration of activities. This is important to understand: your activity can be delisted as soon as it looks like being a success. But the benefits of being on the Positive List outweigh the difficulties.

Reds under the bed, on the tractor, and in the shed?

I like the MP for Parkes Mark Coulton. I stood against him when he was first elected in 2007.  He showed he has a fine sense of the hystorical in Parliament on Thursday when he warned farmers to stay away from the Carbon Farming Initiative because it could lead to the failure of Australian agriculture. He announced that farmers had to sign up for the CFI and submit themselves to being told what to do by the government. He's right, of course. Famous failed experiments of state-controlled agriculture led to famine and disaster in the Soviet Union and China and more recently North Korea and Zimbabwe. But Mark need not worry. The CFI is still voluntary. In fact, the CFI wants farmers to tell governments what to do by making their innovations available to other farmers by submitting them to the Positive List. (The Carbon Farming Initiative (CFI) includes an additionality test to ensure that carbon credits generated by CFI projects can genuinely offset the emissions produced. To pass the additionality test, a project must be on the Positive List.)

Soil carbon calling 42,000 farmers

The Government’s Caring for our Country program has made huge changes already and now it aims to recruit 42 000 farmers to improve soil practices across 70 million hectares by 2013. Trends in the adoption of practices that increase carbon in soils, reduce acidification and erosion are being tracked on 33,000 farms. The targets include 50% to 70% groundcover. The number of graziers monitoring ground cover levels has increased from 70% per cent in 2007–08 to 79% per cent in 2009–10. But those setting groundcover targets decreased from 40% to 31% in the same period. What is to stop a grazier from abandoning their groundcover target and graze their pastures harder when things get tough? It costs to maintain groundcover. That is where soil carbon offsets come in. We need as much land ‘under contract’ for soil carbon sequestration as possible. How? By getting as many graziers engaged in soil carbon sequestration by making the deal more farmer friendly. It’s hard to see a future government putting another $2 billion into research and extension for these issues. Look around you. Where can the money come from? Where it is now. The Big Emitters. King Coal. We stand at a unique time in history, where need and providence collide. What a tragedy if we don't reach out and take it.

The Money Tree

I am currently rushing to finish writing a book called "The Money Tree: How To Make Money Today From The Carbon Farming Initiative" which reveals to farmers how to make money by planting trees on their farms. They can earn Carbon Credits by planting native trees on degraded land to extract CO2 from the atmosphere. (New.) It's the first thing your average Joe farmer can do to get hold of some of this carbon money that will be soon sloshing around. We are changing the workshop program (An Introduction to Carbon Farming and Trading) to put more emphasis on the tree methodology because it is immediately available. The Money Tree includes chapters on a range of other money-making farm forestry activities such as growing sawlogs, fire wood, christmas trees, oil mallees, etc.. Properly integrated into a farm plan, trees can bring a long list of co-benefits - such as soil fertility, salt scarring, wind and rain erosion, shelter for stock, biodiversity and more. We hope to have it finished in a week or two. BTW: We are open to consider any contributions of useful text and photos.