Problem: Uptake of a Soil Carbon methodology will be stymied by the relinquishment provisions of the Permanence Integrity Standard. Farmers will not sign a 100 year contract. (See Appendix A below.) Practical solution: The 100 Years Permanence Standard can be ‘neutered’ as a problem by the extending the ‘5% risk of reversal’ buffer into a ‘100% conservativeness buffer’. This concept sees the Permanence of each tonne of carbon sold by a farmer underwritten by another tonne deposited in a Soil Carbon Bank. The tonne held in trust is returned to the farmer or their descendants in increments as the years pass and the risk reduces. This provides an ongoing income and an incentive to continue carbon farming practices. Its implementation would allow the Prime Minister to announce: “We have abolished the 100 Year Rule that has robbed farmers of the right to be rewarded for capturing carbon in the landscape. And we have done it without reducing the integrity of the permanence of the carbon credits.”
APPENDIX A: 100 Year Rule
The rejection among farmers of the idea of signing a contract binding at least 3 generations to a land management regime that they have yet to experience is almost absolute. Only one farmer organization – the Environmental Farmers’ Network – has expressed support for it. Even those interested in the CFI are against this provision. The following is a selection of opinion and evidence that supports this contention;
• In more than 150 meetings and workshops with Australian farmers on the subject of carbon farming and offsets trading, conducted by Carbon Farmers of Australia since 2006, not one farmer has been willing to commit to a 100 year contract.
• A survey of 100 rural landholders in the wet tropics natural resource management (NRM) region found that very few would consider 100 years, particularly when the crediting period is 15 years with no guarantee of returns after the initial return period. (Degree Celsius Submission on Carbon Credits (Carbon Farming Initiative) Bill 2011, Senate Standing Committees on Environment and Communications)
• A study for the Fitzroy Basin Association in 2009 focusing on landholders of central Queensland’s brigalow forest, found few likely to participate with long contract lengths. (Gowen, R., 2009. Productivity tradeoffs and synergies for grazing lands in central Queensland to generate carbon offsets; Project report Commissioned by the Fitzroy Basin Association. In. Department of Employment, Economic Development and Innovation, Brisbane, Queensland, Hamilton K., Unna Chokkalingam and Maria Bendana (2010). State of the Forest Carbon Markets 2009. Ecosystem Marketplace.)
• Less than 2% of American farmers are prepared to enter into conservation easements of 100 years to protect carbon sequestration forests (Charnley, S., Diaz, D., Gosnell, H., 2010. Mitigating Climate Change Through Small‐Scale Forestry in the USA: Opportunities and Challenges. Small‐scale Forestry 9, 445‐462).
• Modeling of contract length of carbon sequestration and environmental outcomes shows that while long contracts may increase the environmental benefits from one landowner, the overall result is poor because few landholders are prepared to participate (Ando, A.W., Chen, X. Optimal contract lengths for voluntary ecosystem service provision with varied dynamic benefit functions. Conservation Letters. 2011.)
• Executive Officer of the Conservation Agriculture and No-till Farming Association (CANFA) Neville Gould believes “most farmers would accept… a 15 year contract” at less payment per tonne “just so they can start to trade”. (“Another successful Carbon Farming Conference in Dubbo” CANFA Comment, Neville Gould - Friday, October 26, 2012 )
• Andre Leu, Chairman, Organics Federation of Australia: “The current CDM permanence requirement of 100 years is too long for most people to enter into a realistic contract. The idea of contracts to guarantee activities for longer than most people’s lives is unrealistic.” (Submissions on Carbon Credits (Carbon Farming Initiative) Bill 2011, Senate Standing Committees on Environment and Communications, Andre Leu, Chairman, OFA. P.O Box 800, Mossman, Qld 4873 Ph:07 40987610 Mob:0428 459870 Email: email@example.com)
• Professor David Pannell, School of Agricultural and Resource Economics, UWA: “The CFI’s requirement for participating farmers to maintain any credited sequestration for 100 years … creates considerable costs and uncertainties for farmers.” (Submissions on Carbon Credits (Carbon Farming Initiative) Bill 2011, Senate Standing Committees on Environment and Communications)
• Degree Celsius, Network NRM bodies: “Very few landowners or leaseholders will take up such a commitment when the returns are not guaranteed or reasonably expected, and 100 years is a very long time to expect such returns and if returns are not guaranteed, the value of the land will be decreased proportional to the area of land under the carbon maintenance obligation.” (Submissions on Carbon Credits (Carbon Farming Initiative) Bill 2011, Senate Standing Committees on Environment and Communications)
• Mick Keogh, Executive Director, Australian Farm Institute: “It is hard to imagine farmers signing up to a 100 year commitment in the face of such uncertainty.” (Ie., linking to EU market and abandonment of floor price.) “Carbon uncertainty confirmed ?”, Ag Forum, Thursday, August 30, 2012
• Australian Wool Innovation: “It is impossible in practice to guarantee permanence of land sector bio-sequestration offsets …. there would be little incentive for farmers to enter into offset project agreements.”, (Design of the Carbon Farming Initiative Consultation Paper, January 2011)
• “Even a generous interpretation of the treatment of permanence in this document [the CFI consultation paper] seems very likely to exclude all sequestration practices." Dr Richard Conant is currently a Smart Futures Fellow at Queensland University of Technology in Brisbane Australia and an ecosystem ecologist at the Natural Resource Ecology Laboratory at Colorado State University.