Carbon farming: a solution to global land degradation and poverty?

Methane-capture technology in Grantham, Queensland, could earn carbon credits through Australia’s Carbon Farming Initiative. AAP/Alan Skerman

Today, nearly 1.3 billion people – almost a fifth of the world’s population - live on “fragile” agricultural land. Just one-third of the rural poor in developing countries live on productive agricultural land.

Fragile land is the main challenge facing environmental sustainability and poverty eradication in the developing world. But a solution could come from Australia: carbon farming.

Reduced soil security is likely to damage food security in the future, particularly in developing countries. Australia’s Carbon Farming Initiative may provide a model for other countries as they look to find ways of managing degraded land.

Since 1950, the estimated population in developing economies on “fragile lands” has doubled, due to both an increase in these lands and growing rural populations. These marginal environments are prone to land degradation and less suitable for agriculture. They are upland areas, forest systems and drylands that suffer from low agricultural productivity, and where it is difficult to farm intensively.

Extremely poor families living on marginal lands have very few productive assets: just their land and their unskilled labour. Land degradation is a serious threat to their livelihoods. It often mires them in an irreversible “poverty-environment trap”.

The rural poor clustered in fragile environments could improve their livelihoods through carbon farming. This is a payment scheme that allows farmers and land managers to earn credits by storing carbon or reducing greenhouse gas emissions on their land. These credits can then be sold to pay for a variety of carbon storing activities, such as reduced tillage, biogas, drip irrigation and afforestation.

Such initiatives are spreading across the developing world, including China, Brazil and Africa, with major development agencies such as the World Bank getting involved.

Tree planting is one technique being used in China in an attempt to reverse desertification caused primarily by overfarming. EPA/Mark

But the most important and ambitious of these initiatives is occurring not in developing countries, but in Australia.

Carbon farming in Australia

Since September 2011, Australia has been implementing its Carbon Farming Initiative (CFI). Under the auspices of the CFI, the government’s Carbon Farming Futures plan will provide AU$429 million over the six years to encourage carbon farming across Australia.

The Government will buy carbon credits from farmers and landholders who undertake carbon-saving measures such as storing carbon and revegetation. Farmers might eventually earn credits for implementing new carbon storing activities including planting trees, reducing livestock methane emissions, and managing natural habitat.

For now, however, Australian farmers seem more curious about earning credits from altering existing cultivation and farmland management practices so soils hold more carbon.

The Australian policy experiment with carbon farming is instructive. It gets to the heart of questions about whether carbon farming can make a difference in halting global land degradation:

  • How can carbon farming schemes be funded and implemented on a sufficiently large scale to reduce widespread land degradation?

  • What are the benefits and costs for farmers and landowners?

  • Would a major policy initiative supporting widespread carbon farming be politically feasible?

Joint mechanisms: carbon tax and carbon farming

Australian farmers could be the big winners from the federal Government’s carbon tax initiative, since they are exempt from much of the carbon tax but eligible for carbon credits if they participate in any of the resulting CFI schemes.

While farmers will pay more for transport due to the carbon tax, other farm-related emissions are exempt, including methane released by farm animals, carbon emitted from the soils through cultivation, and gasoline for farm vehicles.

The Australian government may get a powerful political force – Australia’s farm lobby – to support the carbon policy while at the same time justifying a new subsidy for Australian farms on environmental grounds.

Will farmers change their practices and be the big winners out of Australia’s carbon policies? AAP/Kellogg Company

But there are caveats.

First, one should be cautious about over-selling carbon farming as a panacea for controlling widespread land degradation and carbon emissions. There is still a lot of uncertainty over which methods of carbon sequestration – planting trees, reducing methane emissions or switching cultivation methods – are the most cost-effective and long-term ways to sequester carbon on farms.

Nearly half (AU$201 million) of the budget for the Carbon Farming Futures plan will fund research into new ways land managers can reduce emissions and store soil carbon.

Second, even with a generous carbon credit, many Australian farmers may not participate. A study in southeast Australia found a relatively high carbon credit of $AU200 per metric ton of carbon sequestered induced small changes in farming practices. There was an 11% increase in the adoption of minimum tillage cultivation and a 16% increase in no-tillage farming.

As the study points out, the CFI credit scheme is unlikely to inspire additional carbon farming in the south:

the adoption of carbon-sequestering technologies is already high across the Southern Region, with 65% of farmers already recognising (without carbon incentives) the positive impact of conservation tillage practices on profitability, hence the consistently low participation rates.

Finally, whether Australia’s carbon policy is viewed favourably by the agricultural economy may depend on how widespread carbon farming becomes.

Most Australian farmers and pastoralists will pay the carbon tax through higher costs of transportation. But if there isn’t widespread participation in the CFI, only a relatively small proportion of farmers and pastoralists will benefit from carbon farming credits, and thus are likely to maintain a negative attitude towards the carbon policies.

Australian agriculturalists may end up being neutral, if not hostile, towards Australia’s new carbon policy. It will be intriguing to see how this innovative economic and political experiment in carbon policy pans out for Australia over the next several years.

A recent study for India shows that credits in the range of US$20 to US$200 per metric tonne of soil sequestered carbon could lead to significant adoption of no-tillage farming in wheat-based cropping systems of the Indo-Gangetic Plain.

Perhaps it will not be long before India and other developing countries begin exploring carbon policies similar to Australia’s to generate the credits needed to foster widespread carbon sequestration, land conservation investments and rural poverty reduction.