Standard 4: Measurable and verifiable

Standard 4: Measurable and verifiable – Current definition: Each offset credit represents one tonne of CO2-e removed or emissions reduction. It must be measured or estimated accurately. Monitoring and auditing must be consistent and independently verified. For biosequestration activities that record great variations of carbon, the Government suggests long-term changes be measured and seasonal or other variability accounted for by means of a rolling average.

Questions Arising About The Current Definition of Measurement and Verification

1. Is the purpose of the system of measurement to reassure the buyer or to reward the grower? If the cost of accurate measurement makes the exercise unfeasible, there are other means of reassuring buyers to accept a higher level of uncertainty.

2. Is 95% Certainty necessary when the buyer is buying an intangible product for community purposes (as part of a collective action) from a community pool in order to change the behaviour of individuals in key roles?

3. Have the Means in this case overshadowed the End? The conclusion that soil carbon has attributes which make it unsuitable for inclusion in an accounting scheme would indicate that the accounting scheme was the problem, given the potential benefits of soil carbon. The accounting scheme was established to facilitate a market only because the global community wanted to encourage widespread adoption of desirable practices. The IPCC must understand that its purpose is not to produce a perfect accounting model. It’s purpose is to deploy the resources of its member nations to urgently remove CO2e from the atmosphere.

Recommendations

Carbon Farmers of Australia recommend that the issue of Measurement and Verification be considered in the light of the following Principles:

Principle 1. The Purpose of Measurement, Monitoring and Verification is not to Measure, Monitor and Verify. It is to enable a transaction to take place.

Principle 2. Measurement is a matter of risk management. It can be offset by the price mechanism and statistical averaging.

Principle 3. The Value of the Service performed should be reflected in the price paid. The cost of Measurement and Verification should then be calculated relative to the returns.

Suggestions for Action on the issue of Measurement and Verification

Action 1: Reducing the cost of Measurement and Verification - There are several options for removing the barrier of cost of measurement:

•Aggregated Sampling & Analysis: The current price of sampling is high on a per unit basis. But in the real world each landholder is not likely to be negotiating with a laboratory for sampling services. They will form buyer groups. Aggregators will negotiate on behalf of large numbers of landholders. The Government could play a role in tendering the entire Australian sampling opportunity to get the lowest per unit cost. What price for core sampling 130,000 properties in Australia?

• Predictive Ratios: Exploit the statistical properties of soil carbon flux to build predictive ratios. Baseline with 100cm cores, calculate the ratio of soil carbon in top 30cm over the total sample, and all monitoring samples thereafter need only be 30cm to measure total 100cm. Similarly, reduce the number of samples required by building predictive ratios between initial 200 samples and 20 samples per unit. Further, the statistical relationship between the individual samples and a single ‘bulked up” sample may enable the sampling to be dramatically reduced. The questions arise: what degree of uncertainty is acceptable to the Kyoto accountants? What tolerances will they allow soil carbon given the extraordinary uncertainty factors they allow other sources and sinks? What degree of accuracy (individual unit vs aggregated) would satisfy a buyer?

• Simplified System: By stripping unnecessary elements from the testing regime and retaining only those needed to achieve our purpose (carbon sequestered), we can further reduce costs. Do we need to map soil types? Do we need to measure anything other than total carbon? How often do we need to measure bulk density?

• Hybrid MMV system: The number of core samples could be reduced if a combination of visual audit and/or remote sensing were incorporated. An annual visual aduit could cover the following “Indicators” or proxies: • increased groundcover and therefore biomass • increased perenniality & therefore produce more biomass • increased biodiversity of plants species and wildlife in and on the soil • reduced soil disturbance and compaction.

• Revenue Context: Any cost for sampling should be considered against the price of carbon. This has ranged from $1 to $40 and some estimate it will reach $100 when the big 3 emitters (USA, China, India) finally enter the market.

Action 2: Engage buyers, traders and regulators in discussion of MMV issues and enlist their help to develop a workable system. References will be made to analogous uncertainties in other categories of abatement and GHG offset. The engagement strategy includes interviews and workshops with carbon traders, commodity market experts, statisticians, buyers, regulators, and growers. Scientists will be involved where they understand that the objective of the exercise is not precision but practical solutions.We are acting on Professor Rattan Lal’s suggestion that integrated teams will solve the problem of a market mechanism, rather than teams of scientists. For this reason we would approach a small group of diverse, talented people who can serve on a working team.

• market economists

• actuaries

• engineers

• commodity traders

• innovators

• philosophers

(Re the philosophers, Albert Einstein once said that understanding taxation was beyond a mathematician and would require the skills of a philosopher.)

Action 3: Act now. There is no time for new 3 year research projects. The time has come for learning by doing. Take action and monitor results. Assume we are wrong and look for evidence of it. The risk of not doing something is now greater than the risk of doing the wrong thing.