Tag Archive for: Carbon Finance

How Farmers Could Be the New Climate Warriors: Agricultural Carbon Credits

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Author: Brian J Barth

Environmental advocates have all but given up on their long-cherished goal of a federally-mandated cap-and-trade program to rein in carbon emissions, given the present state of gridlock on Capitol Hill. But amid protracted hemming and hawingover how such a system would stack up against carbon taxes or other broad incentives to reduce emissions, the state of California has stepped in where Washington policymakers fear to tread.

California formed its own state-mandated carbon market in 2012, restricting the emissions of 600 of the state’s biggest polluters, who produce 85 percent of greenhouse gas emissions statewide. Lowering the “cap” will slash emissions in the state 16 percent by 2020. More recently, the California Air Resources Board, which oversees the state’s carbon market, linked arms with allies north of the border—Quebec, Ontario, and Manitoba—to ink an agreement that will integrate the three Canadian provinces’ carbon markets with California’s in the coming years. Struck at December’s United Nations climate change summit in Paris, the deal makes environmentalists’ dream of an ad-hoc North American carbon market seem actually plausible. It’s precisely the sort of regional cooperation that President Barack Obama encouraged in the Clean Power Plan he released last summer.

Yet this bit of good news in the ongoing fight to regulate carbon emissions has gone largely unnoticed amid all the partisan bickering over such incendiary issues as fracking and the future of the coal industry. Typically, carbon offsets have been tied to things like wind farms and tree planting projects. But in California, the Air Resources Board’s new rules have opened the carbon market to farmers. Not only is this an important tool to encourage more responsible agricultural practices—farms are responsible for about 13 percent of greenhouse gas emissions globally—but it seizes on the untapped opportunity offered by crop systems as a means to sequester carbon. In the same way that forests and grasslands act as a carbon dioxide sink, crop plants also pull carbon dioxide from the air, storing it in their tissues and converting it to substances that feed microbial life in the soil. The catch-phrase “carbon farming” has emerged to describe methods which maximize agricultural carbon sequestration, including such soil-building activities as cover cropping and no-till cultivation techniques.

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Beyond Carbon Metrics

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Authors: Camila Moreno, Lili Fuhr, and Daniel Speich

Over the last 10 years, “climate change” has become almost synonymous with “carbon emissions.” The reduction of greenhouse gases in the atmosphere, measured in tons of “carbon equivalents” (CO2e) has emerged as the paramount objective in the quest to preserve the planet. But such a simplistic approach cannot possibly resolve the highly complex and interconnected ecological crises that we currently face.

Global environmental policy’s single-minded focus on “carbon metrics” reflects a broader obsession with measurement and accounting. The world runs on abstractions—calories, miles, pounds, and now tons of CO2e—that are seemingly objective and reliable, especially when embedded in “expert” (often economic) language. As a result, we tend to overlook the effects of each abstraction’s history, and the dynamics of power and politics that continue to shape it.

One key example of a powerful and somewhat illusory global abstraction is the gross domestic product (GDP), which was adopted as the main measure of a country’s economic development and performance after World War II, when world powers were building international financial institutions that were supposed to reflect relative economic power. Today, however, GDP has become a source of widespread frustration, as it fails to reflect the realities of people’s lives. Like a car’s high beams, abstractions can be very illuminating; but they can also render invisible what lies outside their light.

Nonetheless, GDP remains by far the dominant measure of economic prosperity, reflecting the obsession with universality that accompanied the spread of capitalism worldwide. Complex, nuanced, and qualitative imaginings that reflect local specificities are simply not as appealing as linear, overarching, and quantitative explanations.

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Carbon Finance Possibilities for Agriculture, Forestry and Other Land Use Projects in a Smallholder Context

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Abstract

This booklet is intended to guide extension service advisors and institutions who work with small-scale farmers and foresters with an interest in Carbon Finance and Carbon Projects. Its aim is to support setting-up carbon projects which involve small-scale farmers. Their participation allows them to be involved in the development and implementation of the project, influence the design of the project to generate positive impacts for the farmers and increase their knowledge about carbon finance. The definition of a small-scale farmer differs between and within countries. In most cases it is a farmer who cultivates less than one hectare of land and has diverse sources of livelihood. The guide is structured into five sections: first, the background of climate change is explained (1); second, an introduction is given to how the carbon market works (2); this is followed by an explanation of carbon project development and the timeline and project size to take into account for planning (3); four, costs to be expected during the development of carbon projects are summarised, as well as benefits (4); finally, different funds and grants are presented (5). This booklet will need constant updating, as the political framework is changing very fast, causing changes in legislation, as well as actors, funds and regulations. In addition, the available data, research and knowledge for the development of carbon projects is constantly improving which will facilitate their future upgrowth.

Download the Food and Agriculture Organization of the United Nations Report

Carbon Markets and Agriculture: A U.S. and International Perspective

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Authors: Ben Lilliston, Renata Brillinger, and Katie Merritt

Carbon markets and cap-and-trade programs are increasingly being used as a mechanism to mitigate climate change by reducing net greenhouse gas emissions. In the U.S., there are already two large carbon markets in play—one in California, and one in the Northeast. There will likely be an expansion of U.S. carbon markets in the coming years as the Clean Power Plan is implemented. Internationally, the European Union has the world’s largest carbon market, and the United Nations has outlined rules and guidelines for carbon trading. Agriculture has the capacity to sequester—or emit—large amounts of carbon, and will therefore be greatly impacted by cap-and-trade and carbon markets.

On this webinar we will hear from two experts: Renata Brillinger, the Executive Director of the California Climate and Agriculture Network, and Ben Lilliston, Vice President of Programs at the Institute for Agriculture and Trade Policy. Renata will share lessons learned from the current California cap-and-trade program and principles to improve the effectiveness and equity of carbon markets as they relate to agriculture. Ben will discuss international carbon markets and concerns for agriculture.

Learn More on Institute for Agriculture and Trade Policy

Can Carbon Farming Make the Carbon Tax More Politically Palatable?

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Author: Edward B. Barbier 

Australia has launched a carbon tax initiative together with the Carbon Farming Initiative (CFI). Under CFI, the government will buy carbon credits from farmers and land managers who save carbon by storing carbon or reducing greenhouse gas emissions on the land. Australian farmers are exempt from most of the carbon tax but are eligible for the carbon credits in CFI. The double initiative could be useful in gathering support from Australia’s farm lobby for the controversial carbon policy, but questions remain about market approaches to climate change mitigation.

In mid-July, I participated as a keynote speaker at University of Sydney’s 2012 Research Symposium on Soil Security.

A major topic at the Symposium was carbon farming, which is a payment scheme that allows farmers and land managers to earn credits by storing carbon or reducing greenhouse gas emissions on the land. These credits can then be sold to pay for the various carbon storing activities.

Since late 2011, Australia’s government has operated such a scheme, called the Carbon Farming Initiative.  Under the auspices of the CFI, the government has launched the Carbon Farming Futures plan, which will provide AU$429 million over the six years to encourage carbon farming across Australia.  Under the plan, the Government will buy carbon credits from farmers and landholders who undertake carbon-saving measures such as storing carbon and revegetation.  There are many ways in which Australian farmers might eventually earn credits for storing carbon, including planting trees, reducing livestock methane emissions, and managing natural habitat, but Australian farmers seem most curious about earning credits from altering existing cultivation and farmland management so that the soils hold more carbon.

Also while I was in Sydney, the Australia Government officially launched its carbon tax initiative.  Emitters will initially pay a price of AU$23 per metric ton of carbon.  The price will increase gradually until 2015, when Australia will shift to a trading scheme that will let the market set the cost.  Interestingly, however, Australian farmers will not have to pay for their current emissions of carbon, such as methane released by farm animals or carbon emitted from the soils through cultivation.  Gasoline for farm vehicles is also exempt from the carbon tax.  But because the carbon tax impacts Australia’s entire transport sector, farmers will soon be paying higher transportation costs for marketing their produce and bringing bulk inputs to the farm.

However, Australian farmers could be the big winners from the country’s new carbon policy: exempt from much of the carbon tax but eligible for carbon credits if they participate in any of the resulting CFI schemes.  This could be a “win-win” politically for the Australian government, as they may get a powerful political force – Australia’s farm lobby – to support the new carbon policy while at the same time justifying a new subsidy for Australian farms on environmental grounds.  Governments in the rest of the world, including in the carbon tax-phobic United States, may watch this Australian initiative with interest.  Who knows, one could even see in the near future French farmers protesting in Paris and Brussels demanding  that the EU adopt Australia’s carbon policy, or a strong “carbon farm” lobby emerge in the US Congress to demand a similar policy be instituted in the next US Farm Bill.

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Wake Up Before It Is Too Late: Make Agriculture Truly Sustainable Now for Food Security in a Changing Climate

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Developing and developed countries alike need a paradigm shift in agricultural development: from a “green revolution” to a “truly ecological intensification” approach. This implies a rapid and significant shift from conventional, monoculture-based and high external-input-dependent industrial production towards mosaics of sustainable, regenerative production systems that also considerably improve the productivity of small-scale farmers. We need to see a move from a linear to a holistic approach in agricultural management, which recognizes that a farmer is not only a producer of agricultural goods, but also a manager of an agro-ecological system that provides quite a number of public goods and services (e.g. water, soil, landscape, energy, biodiversity, and recreation) UNCTAD’s Trade and Environment Review 2013 (TER13) contends.

TER13 highlights that the required transformation is much more profound than simply tweaking the existing industrial agricultural system. Rather, what is called for is a better understanding of the multi-functionality of agriculture, its pivotal importance for pro-poor rural development and the significant role it can play in dealing with resource scarcities and in mitigating and adapting to climate change. However, the sheer scale at which modified production methods would have to be adopted, the significant governance issues, the power asymmetries’ problems in food input and output markets as well as the current trade rules for agriculture pose considerable challenges.

TER13, entitled Wake up Before it is Too Late: Make Agriculture Truly Sustainable Now for Food Security in a Changing Climate was released on 18 September 2013. More than 60 international experts have contributed their views to a comprehensive analysis of the challenges and the most suitable strategic approaches for dealing holistically with the inter-related problems of hunger and poverty, rural livelihoods, social and gender inequity, poor health and nutrition, and climate change and environmental sustainability – one of the most interesting and challenging subjects of present development discourse.

Agricultural development, the report underlines, is at a true crossroads. By way of illustration, food prices in the period 2011 to mid-2013 were almost 80% higher than for the period 2003-2008. Global fertilizer use increased by 8 times in the past 40 years, although global cereal production has scarcely doubled at the same time. The growth rates of agricultural productivity have recently declined from 2% to below 1% per annum. The two global environmental limits that have already been crossed (nitrogen contamination of soils and waters and biodiversity loss) were caused by agriculture. GHG emissions from agriculture are not only the single biggest source of global warming in the South, besides the transport sector, they are also the most dynamic. The scale of foreign land acquisitions (often also termed land grabbing) dwarfs the level of Official Development Assistance, the former being 5-10 times higher in value than the latter in recent years.

Download the Report from UNCTAD

Top 10 Carbon Market Predictions for 2015 from The Climate Trust

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Author: Kasey Krifka

The Climate Trust, a mission-driven nonprofit that specializes in climate solutions, with a reduction of 1.9 million tons of greenhouse gases to its name, announced its second annual prediction list of 10 carbon market trends to watch in 2015.

The trends, which range from increased climate change adaptation measures at the state and city-level to new protocols for agriculture and forestry, were identified by The Climate Trust based on interactions with their diverse group of working partners—government, utilities, project developers and large businesses.

“We’re excited to once again look at the overall market with fresh eyes and identify areas of potential movement and growth,” said Dick Kempka, vice president of business development for The Climate Trust.

  1. Allowance and offset demand will increase in 2015. The second compliance period for California’s cap-and-trade system began the first of this year. Distributors of transportation fuel and natural gas have officially joined the ranks of other capped, covered entities, and with the addition of these fuel distributors, the emission cap immediately more than doubles in size. As a result, The Trust predicts that cost containment mechanisms such as offsets and banking will become much more significant components of the cap-and-trade system. A recent whitepaper estimates the current market value at $2 billion annually, and anticipates that this will increase to $4 billion in 2015. To date, the California market has largely been viewed as an operational success, however, some have suggested the system has not yet experienced stresses that could result from drastic and unplanned energy use spikes—escalations triggered by weather events such as drought, hot summers, and cold winters. The Trust believes that the introduction of transportation fuels under the cap, coupled with allowance uncertainty and shortage of offsets, are likely to increase the demand for both allowances and offsets in 2015.

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