AGENDA PAPER: CARBON COALITION COMMENTS

EMISSIONS TRADING STAKEHOLDER CONSULTATION
AGENDA PAPER: OPTIONS FOR COVERAGE OF
AGRICULTURE

CARBON COALITION COMMENTS:

The Carbon Coalition welcomes the opportunity to contribute to the Department of Climate Change’s thinking on the shape of Australia’s Emissions Trading Scheme and acknowledges the Commonwealth Government’s proactive position on soil carbon.

1. OUR MISSION:

The Carbon Coalition’s Mission is “To see soil carbon credits traded and farmers paid for what they grow.” Whether inside or outside the Emissions Trading Scheme, the Mission remains the same.

2. DIRECT, INDIRECT OR HYBRID?

2a. Against Direct: The key factor in the debate about where primary producers should make their contribution to mitigating Climate Change is an attribute that seperates them from all other businesses in the economy: they cannot pass on the cost at the saleyards or the auction room. While energy or transport or manufacturing companies can manage their pricing (as price makers) primary producers are still largely price takers.

2b. For Direct: The complexities and costs associated with such a diverse collection of businesses is not a material barrier. These businesses are managed by the Tax Office in all their diversity. They submit BAS reports. The administrative costs are illusiory because existing templates can be extended to accommodate the new content.

2c. For Indirect: The price on carbon would have to be paid either by the input supplier or the processor. Either way the primary producer pays the price of the carbon in higher input costs or a lower price for produce (to account for the increase cost for the processor which would be passed on through to the consumer.) This equalising process is more equitable than the Direct model which penalises the producer who has no recourse.

2d. For Hybrid: This option provides the flexibility to separate the price-takers from the price-makers among producers. Growing numbers of producers are engaging in supply chain marketing, engaging directly with channel partners to build value-added brands.

3. REDUCING COSTS OF PARTICIPATION

3a. Direct participation in an Emissions Trading Scheme described in the Agenda Paper: Overarching Design Principles as a result of “coverage” involves exclusion from the abatement market as a supplier. Involvement in the offset mechanism can occur only while outside the scheme. However the Coalition’s understanding of the cap and trade mechanism includes the ability of the firm to trade the credits it can generate by reducing its emissions below the level required. The cost of participation in a Direct Obligation option can be reduced dramatically by giving producers access to the carbon offsets they can generate by growing soil carbon.

4. VERIFY MANAGEMENT PRACTICES: NITROGEN FERTILIZER

4a. The indiscriminant use of nitrogenous fertilisers is carbon retrograde. Text books acknowledge the problem. ‘The dominance of superphosphate and the ley farming of the times left a legacy of their own, in term of shallow-rooted pastures, increased soil acidity, new weed invasions and nutrient imbalanced in many soils.’ It burns up soil organic matter and takes calcium out of the soil. It can damage microbial communities and destroy their capacity to release natural sources of nitrogen. Contamination of aquifers, as in the USA, is a dangerous problem.

4b. Soil organic matter (SOM) can supply much of a farmer’s Nitrogen needs. “In cropping systems, as much as 50%-80% of the N can be supplied from SOM and nearly 100% of the N in native ecosystems,” writes Professor Charlie Rice in his book Soil Carbon Management. This percentage represents11-300kg N ha-1 for a crop . At $1500/tonne for nitrogen fertiliser, this transates into a value of $16.50-$450/ha/yr. Most N in soils comes from the air and is absorbed by micro-organisms associated with legume plants. N is fixed by legumes and stored in the soil in organic forms, to be broken down by other microbes – via two processes: mineralisation and nitrification, via which it is transformed into ammonium and nitrate.

4c. Former NSW Department of Agriculture agronomist Adam Wilson told The Land that the best way to build up a N bank is to add carbon to soils. Management that builds C also builds organic N because both processes rely upon interactions between rootmass and microbes. He recommends adding organic carbon via composts, green manures or planned grazing, avoiding highly alkaline fertilizers which burn up C and humus, minimum tillage, and a legume or pasture rotation.

4d. One way to limit use of artificial fertilisers and turn producers towards alternatives (composts, compost teas, strategic grazing, etc.) is to make it cost-prohibitive by factoring in an environmental levy so the full cost of the substance is paid by the user.

4c. The licensing of the use of artificial fertiliser due to its high greenhouse intensity would give the Government a means of regulating its use . (Ie. determining where and when and how much is used.) The Catchment Management Authorities can be used to audit application.

5. VERIFY MANAGEMENT PRACTICES: METHANE EMISSIONS

5a. The main area of uncertainty in the methane issue is not the production per animal or property. It is ascertaining accurately the stock numbers for the reporting period.

5b. There are 3 methods currently used to report stock numbers on a property: 1. Annual tax return 2. Rural Lands Protection Board Annual Report.. 3. NILS tagging for sale. They are likely to have different figures for each report, but an average might be useful.

5c. Numbers of “Killers” (beasts slaughtered for onfarm consumption) are negligible.

5d. Numbers of breeding stock are also not relevant because every animal eventually goes to the slaughterhouse. Saleyard records include age of animal.

5e. Remote sensing by satellite can verify stock numbers.

6. MAXIMISE ABATEMENT INCENTIVES

6a. Trials involving Carbon Farmers in all States are reporting levels of carbon sequestration higher than ever previously recorded. These trials are using combinations of carbon farming techniques never before studied by Government scientists because they were unaware of them. High carbon no till (pasture cropping) and ‘no kill’ cropping techniques combined with biological preparations and time controlled grazing management provide ideal growing conditions for deep-rooted native perennial pasture grasses which are prolific carbon manufacturers when aided by healthy soil microbial communities.

6b. Col Sies of “Winona’ Gulgong reported an increase in soil carbon intensity from 2% to 4% over 10 years (CSIRO scientists say this is impossible.) Dr Tim Wiley of WA Agriculture reports that perennial grasslands can sequester 5-to-10 tonne CO2e/ha/yr from trials around Geralton, WA. Dr Christine Jones of the Australian Soil Carbon Accreditation Scheme reports one of her trial properties – a broadacre wheat farmer near Clermont, QLD - “has more than three times the amount of carbon in the farmed soil than there is under the surrounding native vegetation (149 tonnes of carbon/ha under native vegetation versus 516 tonnes of carbon/ha under the crop). As a result, the soil is far more productive. The wheat crop yielded 4 tonnes per hectare of grain with 13.5 per cent protein this year – well above the district average,’ reports the CSIRO’s ECOS magazine.

6c. Dedicated “Carbon Farming” techniques are also recording faster growth in the more permanent humic carbon fractions than the labile and total carbon scores.

6d. For this reason the Carbon Coalition believes that the average farmer will be able to offset their liabilities from the soil carbon they can grow. Hence the most motivating abatement incentive would be the right to access the soil carbon we produce and to sell it.

6e. An hybrid system of inclusion/exclusion would offer carbon farmers the flexibility required to choose their own destiny. However the benefits accruing from major land management shifts across the entire continent would not be achieved if conventional farmers were given the opportunity to remain conventional.


ABOUT THE CARBON COALITION:

The Carbon Coalition Against Global Warming was formed in February 2006 to ensure Australian farmers and graziers gain maximum benefit from trading in soil carbon credits. The Convenors of the Coalition have been regular speakers at gatherings of farmers and graziers across Australia. They led a fact-finding delegation to the USA on behalf of Australian farmers in 2006. While there they negotiated the first order for soil carbon credits from the Chicago Climate Exchange. They attended workshops, briefing sessions and meetings with members of 3 of President George W. Bush’s 7 ‘regional partnerships’ of states. They carried the flame to New Zealand and saw the Government call a tender for the design of a voluntary market in soil carbon. They discovered the gaps in the data sets used for the National Carbon Accounting System, upon which the belief that Australian soils cannot sequester carbon was based. They initiated a series of ‘soil science summits’ between scientists and farmers, that culminated in the world’s first Carbon Farming Expo & Conference in 2007. They have appeared as expert witnesses before the NSW Premier’s Greenhouse Advisory Panel, the NSW Parliamentary Standing Committee on Natural Resources & Climate Change, and the NSW Dept of Primary Industries Climate Risk Management Project. They succeeded in getting soil carbon on the Election Platform of the ALP for the 2007 Federal Election. When PM Rudd declared an inquiry into soil carbon after the election, Matthew Cawood, Science & Environment Editor with The Land wrote: The soil carbon issue ‘would be still largely invisible if it wasn’t for your efforts. You and Louisa have barnstormed this issue into national politics. That's as good as it gets.”


Michael & Louisa Kiely, Convenors, Carbon Coalition Against Global Warming: RMB 384 Uamby Road, Goolma NSW 2852 (02) 6374 0329 www.carboncoalition.com.au


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