CLIMATE SPECTATOR: The Coalition's carbon illusion

There is good reason the Coalition has been scant on details regarding its Direct Action plan: it is constructed on the premise of bogus soil carbon offsets.

Climate Spectator

Like Labor, the Coalition has committed to reduce carbon emissions 5 per cent by 2020. But the Liberals’ ‘Direct Action’ plan has been dubbed ‘soil magic’ because over 60 per cent of reductions – 85 million tonnes of CO2 per year – are to be taken up by soil.

A scant page in their 30-page policy tells us this will be achieved for the amazingly low price of $10/tonne but offers no more detail. Greg Hunt does mention, in a media release, that it will be acquired by ‘reverse auction’; farmers will tender carbon uptake for sale and the government will buy it at the lowest price.

There is a simple reason why the Liberals won’t tell us more. The cheap soil carbon ‘offsets’ they plan to create will be not be measured and neither will they be permanent. In short, the Direct Action plan is constructed on the premise of bogus soil carbon offsets.

The Libs make the questionable and misleading statement that "any new global emissions reduction agreement is expected to include soil carbons.” The fact is that if soil carbon abatement is ever included, there will be compliance rules. These requirements simply cannot be met for $10/ tonne CO2; any soil offsets created for this price will be non-compliant and will never be an acceptable means of reducing a nation’s carbon emissions.

First and foremost carbon abatement must be measured before it can be claimed and guaranteed permanent for 100 years, which requires a 100 year covenant on the land. It must also be additional (not already common practice) and verified (an accredited practice is proved to be happening). All of these rules are part of the existing Kyoto rules and the Liberals’ now defunct Greenhouse Friendly standards (which, paradoxically they say they will reinstate).

The grain of truth in the Liberals’ fiction is that ‘CCX Soil Offsets’ were once sold for several dollars per tonne in a now defunct private scheme run by the Chicago Climate Exchange. These offsets only required the improved management practice to continue for five years and there was no measurement of soil carbon but instead possible future carbon sequestration was estimated. Investors soon realised that since they were not measured, not permanent and not Kyoto compliant. They were in fact a sham.

The price dropped from several dollars to a few cents per tonne CO2 and they have not been traded since 2010. Another private scheme based on the CCX Soil Offsets – ‘Australian Soil Carbon Accreditation Scheme’ – has been initiated here. Could the Coalition have played a part in this? Not surprisingly, ASCAS is still conceptual and is not generating real carbon offsets.  

How much does it cost to create compliant soil carbon offsets?

To produce compliant soil carbon offsets, the carbon price would have to be of $25 - $200 per tonne CO2,depending on the soil management practice used.  The costs of accreditation, a 100 year covenant ($7,000-$10,000) and baseline carbon measurement must be met ‘up front’. Then verification, reporting ($5,000-$10,000) and carbon measurement are incurred each time carbon is sold (about 10 yearly).  Measurement is the biggest cost, averaging about $3.50/ ha / year. Statistically significant soil sampling entails at least one sample to at least 30cm depth per 2 ha. These must then be analysed in a laboratory (cost $60/sample).

Add to this the annual costs of implementing the carbon farming practice, which range from about $20/ha for pasture management to $600/ha for mulch crops or bio-char. Farmers must spend this money before they can claim any carbon; they must take the risk that the amount of carbon they will be able to sell will cover costs. 

For example, take a typical high rainfall beef farmer. He has estimated that rotational grazing of perennial pastures will cost him $20/ha/year and it will enable him to sell 1.6 t CO2/ ha/yr. The practice will not increase net beef income otherwise he would already be doing it. To make a reasonable margin and allow for risks, he needs to cover costs plus 50 per cent i.e. he will need to make 1.5*(20 4 3.50) = $41/ha per year. To make this, the carbon price has to exceed $26/tonne. 

McKenzie et al, 2010 estimate that for carbon trading to be economically attractive for Australian dairy farmers, the carbon price would have to be at least $200 per tonne CO2 due to the high feed value of pasture that would have to be left to decompose in the soil.

How many tonnes of CO2 could be sequestered with compliant soil carbon offsets? 

I have used an inventory approach to estimate the maximum CO2 sequestration that would be achievable in Australian soils without major changes to land use and at what cost. Land use figures were taken from Australian Resource Atlas and rate of carbon uptake under various soil management practices from CSIRO Land and Water.

My estimates for annual CO2 sequestration in Australian soils are:

– Up to 22 million tonnes of Kyoto compliant soil carbon offsets at prices of $25 - $200 per tonne may be generated from cleared agricultural land. In other words up to a quarter of the 85 million tonnes claimed by the Liberal Party, 95 per cent of which would cost 2.5-20 times more than they claim.

What about non-compliant offsets?

– Up to 100 million t CO2 /year might be sequestered by destocking 200 million ha (more than half) of the rangelands to less than 20 per cent of current levels, using non-compliant ‘stewardship agreements’. There is huge temporal and spatial variation in rangeland soil carbon; it is quickly lost in wildfire, drought and erosion events. A research and measurement program over at least two decades would be required to determine if any carbon has been sequestered or whether rangeland carbon levels are continuing to decline (6). For this reason, not enough is known to even estimate sequestration rates and create con-compliant offsets. In any case these could not be counted towards national carbon reduction targets.

– Stewardship agreements may be effective but only if government were to buy up pastoral leases to ensure permanence.  This would be a positive action in terms of conserving biodiversity, reducing methane emissions and perhaps increasing soil carbon.

Note that the Department of Climate Change and Energy Efficiency (DCCEE) estimate that less than one million tonnes of non-compliant CO2 offsets will be achievable from soil sequestration under the current Carbon Farming Initiative at a price of $33/tonne. These will not be counted towards Labor’s carbon reduction target.

The Coalition’s ‘Direct Action’ is a ‘do nothing’ carbon policy. It is impossible that bogus soil carbon offsets created for $10 per tonne CO2 will ever be an acceptable way of fulfilling legally binding reduction commitments. Furthermore their incredible claim that a few thousand farmers are ready to step forward and take on the responsibility of reducing 60 per cent of the nation’s CO2 burden for $10 per tonne is preposterous. 

Their policy indicates that only $150 million per year is to be spent on paying polluters to reduce their emissions. This is like trying to plug the leaks in the Titanic; it would only achieve minor emissions reductions from a few dirty old coal power stations, which should have been phased out years ago.

Continued touting of a soil carbon solution is at best irresponsible and at worst wantonly deceitful. It appears that the Coalition is taking the cynical view that when soil carbon sequestration is rejected or restricted in international negotiations, they will blame the UN or other countries. Meanwhile, they will have achieved their goal of deferring action for a few more years. They are gambling that enough voters will be convinced by ‘anti-global warming science’ campaigns in the conservative press, as has happened in the US.  

Deniers of global warming don’t care if climate policy is ineffectual. The Coalition is probably right in betting that most swinging voters would not know enough about soil carbon sequestration to challenge their claims. But there is time to raise awareness of this attempted swindle before the next election. The Coalition’s big gamble may not pay off.

Ben Rose (BSc (environmental); Grad. Dip Ed) has five years of professional rangeland management experience in the Pilbara region of WA and several years in carbon sequestration consulting, including soil sampling and testing.  He researched and wrote Chapter 20, "The Biochar Revolution, Transforming Agriculture and the Environment”.

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