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managing soil organic matter - Grains Research & Development ...

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number of European Union (EU) countries this hasoperated as a mandatory cap and trade scheme,which despite initially high permit prices and becauseof the recession, in May 2013 is currently tradingat around 3.5 Euros ($4.67 based on an exchangerate of 0.75 Euros per Australian dollar) per metricton on London’s ICE Futures Europe exchange.Each carbon credit represents one tonne of carbondioxide equivalents (CO 2 -e).The Australian situationThe Carbon Farming Initiative (CFI) aims to helpAustralia meet its international greenhouse gasobligations by undertaking land sector abatementprojects that generate saleable carbon credits(Australian carbon credit units, ACCUs) or offsets.These offsets are either Kyoto compliant and cancontribute towards Australia’s national inventor,or be exchanged for Kyoto consistent credits andexported overseas, or are non-Kyoto compliant andcommonly termed ‘voluntary’ carbon credits.The Australian government introduced a fixedprice of $23 per tonne of carbon dioxide for permitsin July 2012 and is set to increase by five per cent ayear through 2015 before shifting to a cap and tradesystem linked to the EU market. In Australia, around500 companies have a mandatory obligation to payfor, or offset their direct emissions using carboncredits.Currently, <strong>soil</strong> <strong>organic</strong> carbon can also be tradedvia voluntary carbon trading schemes both inAustralia and internationally to offset greenhousegas emissions. In an emissions trading framework,the term ‘offset’ describes the reduction or removalof greenhouse gas emissions in a ‘non-covered’sector (i.e. not mandatory). Until very recently,the agricultural sector remained uncovered andconstituted the primary opportunity for landholdersto engage in the creation of carbon offsets.Trading in voluntary carbon offsets may provideadditional benefits to companies, includingpromotion and strengthening of environmentalcredentials, and promoting a perception within thecommunity that they are taking responsibility fortheir emissions. Landholders wanting to participatein voluntary offset schemes are encouraged to seeklegal and financial advice.Afforestation and reforestation activities, which areincluded under Article 3.3 of the Kyoto Protocol, canbe traded internationally and attract a premium overvoluntary trading markets. These activities includeas an example the establishment of planted treesof at least 2m in height in an area greater than 0.2hectare that has been previously cleared of naturalvegetation post December 31, 1989.Should agriculture become a covered sector,landholders taking part would need to consider thewhole farm implications of participating in carbonmarkets as they may then be required to reportnot only sequestration and mitigation gains, butalso ‘leakages’ and losses from the system (i.e.increasing use of nitrogen fertilisers associatedwith nitrous oxide emissions and livestock methaneemissions), which may result in a negative carbonbalance overall.In May 2013, the Australian government electedto include reporting of activities which includecropland management, grazing land managementand revegetation towards their national greenhousegas reduction target during the second commitmentphase of the Kyoto protocol. This means that foran approved methodology developed under theCarbon Farming Initiative (CFI), these activities willbe able to generate and sell Kyoto-compliant CFIcredits. They also remain eligible for use in voluntarymarkets.Offsets are assessed againstinternationally recognised standards toensure real and verifiable abatement,including:• Additionality (projects only happenedbecause the offsets market was available)• Permanence (carbon store must bemaintained for 100 years)• Accounting for leakage (emissions fromelsewhere that nullify abatement must beaccounted for)• Measureable and auditable• Conservative• Internationally consistent• Supported by peer reviewed science(where estimation methods are differentto those used in Australia’s NationalGreenhouse Accounts, peer reviewedscience must support the estimationmethods)53MANAGING SOIL ORGANIC MATTER: A PRACTICAL GUIDE

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