Standard 1: Additional

Standard 1: Additional – Current definition - If the change in land management has already been made or would have been made for business reasons* or becomes common practice in the district, it cannot earn credits because the abatement does not reduce emissions or sequester greenhouse gases any more than if the scheme was not in operation. (*Business reasons can include higher productivity or profitability.) The Consultation Paper mentions a “Positive list” of activities that would be automatically additional: not-for-harvest carbon sink forests, on-farm tree planting, or capture and flaring methane from manure. An important indicator of Additionality is that the activity depends upon the revenue from the sale of offsets to make it possible; ie. the activity is not a source of profit.

Questions Arising From Current Definition of Additional:

1. Would the outcome be unjust were farmers who adopted climate friendly land management practices before offsets emerged to be disqualified for starting early? Would it also be untenable if those who continued emitting up until the scheme commenced qualified?

2. Would the excluded farmer have only goodwill to stop them reversing the land management practices that sequester carbon if there is no contract or incentive payment to lock in the land controlled by thousands of early adopter farmers?

3. Must the Scheme Administrator be able to read minds to tell if a land manager was considering a particular change as part of their normal business development?

4. How will the Scheme Administrator decide which farmer will be rewarded and which will not when the point is reached at which a practice becomes ‘common practice’ in a location?

5. Will the many farmers who have been involved in Catchment soil carbon programs warned that their involvement disqualified them from offsets revenue?

6. If an increase in soil carbon has co-benefits that include reduced erosion, improved water efficiency, improved soil structure, etc. which may increase productivity, does soil carbon sequestration therefore fall outside the Additionality Standard?

Recommendations

As both Minister Combet and Minister Burke have said that the ‘win-win-win’ nature of the opportunity is its great attraction, we suggest that Additionality be redefined on the following principles:

Principle 1. The Standard should not discriminate against Carbon Farmers who are early movers, innovators and leaders in environmentally-positive farming techniques. These farmers provided the Government and the industry with the means of sequestering carbon in soils. The Scheme could possibly attract ridicule and bad press. And brand damage.

Principle 2. The Standard cannot assume that the Farmer is Economic Man and that the potential for higher productivity or profits would be sufficient to change land management practices. Farm practices are cultural and often defy logic in their application.

Principle 3. The Standard should be appropriate to the conditions of the industry it seeks to regulate. The Kyoto Protocols were originally drawn up to address industrial emissions and encourage renewable energy. In this environment, issues are clear-cut. The Standard’s ‘common practice’ criterion as proposed would disqualify zero-tillage and grazing management because they have reached adoption rates of 53% and 57% nationally, yet they are foundation practices on which other practices are launched. What will attract the other 40+%? Land degradation continues to spread, such as dryland salinity and erosion.

Principle 4. The Standard should address the real causes of GHG emissions from farmland. Farm landscape degradation and emissions from soils are caused by market failure. Markets refuse to pay the farmer the full value of their produce, (including the environmental cost of production)] forcing them to overgraze and over-crop the soils. Offsets are therefore a means of redressing the balance.

Suggestions for Action on the Additional Standard

Carbon Farmers of Australia suggests the following course of action, based on the possible outcomes outlined above:

Action 1: Eliminate the requirement that the practice – to be considered ‘additional’ - should not increase productivity or profitability. Rationale: Farmers require significant incentive to overcome conservatism and inertia to make a change in practices.

Action 2. Eliminate all other aspects of Additionality except the pre-existing practice provision.

Action 3. Allow those who have already adopted sequestering practices to claim Additionality if they adopt a portfolio approach, introducing a new combination of practices that increase soil carbon.

Action 4. Introduce a ‘Stewardship’ payment for those early adopters unwilling or unable to change their practices.

Action 5. Consider the definition of Additionality proposed by the Iowa and Illinois Corn Growers Associations. The Corn Growers have reconceptualised additionality: “GHG project activities shall result in carbon benefits additional to those that would have taken place in the absence of the activity and that are not already required by law or regulation.” Additionality for agriculture “results from a cropping cycle that is either planted directly or is naturally occurring as in rangeland. If there is more carbon in the soil at the end of a crop cycle than there was in the beginning of the cycle, then ‘additionality’ has occurred.”