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Carbon farming in a ricebased system
This article is based on the RGA Environmental Champions Program fact sheet of the same name
IN A NUTSHELL
z There is currently no methodology specifically tailored for rice-based farming systems to earn carbon credits.
z Relatively little is known about greenhouse gas emissions from rice-based farming systems in Australia.
z The possibility of rice growers trading carbon credits within five years is highly unlikely.
z Soil carbon science is still in its infancy and organisations claiming to be able to generate carbon credits for
landholders via soil carbon sequestration should be treated with extreme caution.
Carbon farming is a new frontier. While there is political
will and on-the-ground enthusiasm for landholders to
participate in carbon markets, there is much to be learnt
about practical ways farmers can reduce greenhouse
emissions and increase carbon sequestration.
The rice industry is undertaking new research and development
to try and discover more about its greenhouse gas emissions
profile, to assess the potential benefits of carbon farming for
rice growers. Through the RGA’s Environmental Champions
Program, growers will be provided with the tools and expertise
to engage with carbon farming issues.
What is the Carbon Farming Initiative?
The Carbon Farming Initiative is a greenhouse gas emissions
offset scheme enabling landholders to generate and sell
‘carbon credits’ by adopting farm management practices that
reduce agricultural emissions of greenhouse gases and are not
already common practice.
The Carbon Farming Initiative establishes a legal framework for
landholders to develop a project (effectively, a new on-farm
process or practice) which is recognised under a governmentapproved methodology, and through that project generate
income by selling carbon credits attached to the greenhouse
gas abatement or sequestration achieved by that project.
Purchasers of these credits will be companies whose emissions
are constrained by a mandatory emissions trading scheme
(ETS), or companies wishing to purchase credits in voluntary
offset markets, usually for marketing purposes.
Carbon credits in a voluntary market are always priced much
lower than those where buyers are forced into purchasing. The
government has said that it will purchase offset credits that
aren’t recognised under international accounting rules (e.g.
soil carbon sequestration), and can’t be traded as part of a
mandatory emissions trading scheme.
For credits to be tradable, the government regulator must deem
that any claimed greenhouse gas abatement or sequestration is
additional, measurable, verifiable and permanent. The key point
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for rice growers to understand is that an abatement activity that
improves farm productivity and is common practice will not be
considered to be an additional activity, and will not be eligible
for credits under the Carbon Farming Initiative.
Earning carbon credits
Very few farm practice methodologies have been approved
so far under the Carbon Farming Initiative, and none directly
addressing emissions in rice-based farming systems.
At the time of publication, the only approved methodology
at all relevant to broadacre farming in the Riverina deals with
sequestering carbon in tree plantings. However, this option is
unlikely to be appealing to many rice growers — particularly
given the lack of economic viability for Riverina irrigators to turn
their land to sequestering carbon in trees, and the requirement
to permanently sequester carbon over lengthy contract periods.
However, growers should talk to their regional Environmental
Champions Program coordinator about tree planting credits
under the Carbon Farming Initiative or information on any
coordinated opportunities that might be developing locally.
Growers should also be aware that the government’s recently
announced Biodiversity Fund may provide funding for local
groups willing to establish wildlife corridors in their area.
Greenhouse gases & rice farming
What do we know about greenhouse gas emissions from ricebased farming systems?
We know that methane is the most significant source of
emissions from rice-based farming system, caused by the
breakdown of organic matter in flooded conditions. We have
some understanding that reducing the quantity of plant
residue (e.g. rice stubble) in the soil or reducing the duration
of permanent flooding will reduce greenhouse gas emissions,
perhaps significantly, though the true extent of this abatement
potential is unknown. There are also significant unanswered
questions about the potential for higher, offsetting nitrous
oxide emissions from alternative irrigation techniques to reduce
methane emissions.
IREC Farmers’ Newsletter – Large Area No. 186: Autumn 2012
future issues
carbon farming
In short, we don’t yet know enough about the science of
emissions in rice-based system to properly participate in the
Carbon Farming Initiative. However, there may be significant
abatement potential to make future participation viable.
Improving knowledge
With the support of the rice industry, CSIRO Land & Water has
applied for Commonwealth Government funding for a large
R&D project to better understand greenhouse gas emissions
from rice-based farming systems, and the farm management
practices that can reduce these emissions. This information
will form the basis for developing a Carbon Farming Initiative
methodology specific to rice-based farming systems.
With access to more comprehensive R&D in this field, rice
growers will hopefully be in a better position to judge whether it
is economically viable to alter current management practices in
exchange for offset credits under the Carbon Farming Initiative.
Carbon sequestration
Much of the public discussion about carbon farming has focused
on the opportunities for earning tradable credits by storing
carbon in soils (sequestration). However, there is currently no
approved methodology covering soil carbon sequestration in
the Carbon Farming Initiative and there are a number of factors
limiting the potential for this to occur.
MM
The science underpinning our understanding of soil carbon
sequestration is not well developed. In particular, the
relationship between specific land management practices
and natural variability in soil types and climate and their
effect on soil carbon sequestration is not well understood.
MM
Farmers would be required to demonstrate permanent
carbon sequestration under the initiative (up to 100 years),
which is potentially risky in Australia’s variable climate.
MM
International accounting rules have not been developed
to differentiate between increased soil carbon stores from
landholder activity and the effects of natural variability. Thus,
soil carbon sequestration cannot generate offset credits
under international rules and can only be traded in weak
voluntary markets (or directly subsidised by governments).
Opportunities not immediate
Opportunities for rice growers to earn income for emissions
abatement under the Carbon Farming Initiative won’t be
available soon, and if/when they are, may not prove to be
economically viable.
The completion of rice-based emissions R&D remains at least
three years away, after which the results would need to be
tested ‘on-the-ground’ in a commercial farming context. For
growers to be in a position to trade carbon credits generated by
on-farm greenhouse gas abatement, under the Carbon Farming
Initiative, the industry would then need to obtain government
approval for a specific practice (methodology) for earning
credits within a rice-based system. Realistically, growers are
at least five years away from the prospect of earning tradable
offset credits under the Carbon Farming Initiative.
Even if a practice is approved by government regulators,
the economics of carbon farming may not then stack up for
individual landholders. The quantity of claimed greenhouse
gas abatement (as determined by R&D), combined with the
prevailing market price for offset credits, may not be sufficient
to cover the additional costs of undertaking the abatement
project. The Environmental Champions Program’s existing
Greenhouse Workbook and Greenhouse Calculator are tailormade for growers to better understand what carbon farming
might mean for their business.
IREC Farmers’ Newsletter – Large Area No. 186: Autumn 2012
Given the current state of play, growers should be very wary of
any approach by an individual or company claiming to be able
to earn them soil carbon-based offset credits via alternative
land management practices.
We want your feedback!
To help RGA advocate for carbon farming policies that will work
for farmers, and to develop the tools you need to engage with
this new concept, we need your feedback.
MM
What do you think about the issues raised in this article?
MM
What other information about carbon farming do you need?
Further information
Contact the Environmental Champions Program Regional Coordinators
Murray region – Neil Bull
M: 0428 603 557
E: [email protected]
Murrumbidgee region – Daryl Gibbs
M: 0429 982 507
E: [email protected]
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