Maximizing the Environmental Benefits of Carbon Farming through Ecosystem Service Delivery

Incentive mechanisms of carbon farming contracts: A systematic mapping study

Despite increasing interest, a lack of comprehensive knowledge regarding the efficient design and implementation of carbon farming schemes remains. These schemes must efficiently achieve higher carbon sequestration, incentivize farmers, and increase farmers' participation in global carbon markets. Our study systematically reviews, describes, and maps available evidence related to carbon farming contracts to assess different incentive mechanisms for carbon farming. We conduct a systematic mapping review of articles extracted from various databases employing the Collaboration for Environmental Evidence method. We shortlist 52 articles and analyze about 40 global case studies, identifying three main incentive mechanisms of carbon farming contracts, namely, result-based, action-based, and hybrid payments. We examine how these incentive mechanisms are designed, in addition to associated payment types, monitoring approaches, and barriers to implementation. Result-based payments include stringent monitoring and can be implemented through auctions, carbon credits, product labels or certificates. Action-based payments are found to be simpler, with lower monitoring requirements for farmers and can be paid upfront or after contract implementation. Hybrid payments combine both techniques, offering low-risk and guaranteed payments for farmers and definite environmental mitigation impacts. Result-based and hybrid payments motivate farmers to innovate to meet environmental objectives while also connecting them to carbon markets. The major challenges to developing a successful carbon farming project include lack of permanence, non-additionality, and the absence of stringent monitoring, reporting, and verification standards, all of which affect farmers' incentives. This study determines that carbon farming contract design and efficiency can be improved by analyzing the lessons learned from previous experiences. By examining and improving the attributes that define different incentive mechanisms, farmers can be better motivated to enroll in carbon farming schemes and benefit from increased access to carbon markets to potentially transform agriculture into a viable tool for climate action.

How wide, how much? A framework for quantifying the economic and ecological outcomes of altering riparian width on agricultural land

Creating and managing riparian buffer zones (RBZs) is regarded as a global best-practice management strategy for maintaining and improving waterway health. Agricultural land often utilises RBZs as highly productive pasture, exposing waterways to increased inputs of nutrients, pollutants, and sediment, in addition to reducing carbon sequestration and habitat for native flora and fauna. This project developed a novel approach to the application of multisystem ecological and economic quantification models to the property-scale, at low cost and high speed. We developed a state-of-the-art dynamic geospatial interface to communicate these outputs when switching from pasture to revegetated riparian zone via planned restoration efforts. The tool was developed using the regional conditions of a south-east Australian catchment as a case study but is designed to be adaptable around globally using equivalent model inputs. Ecological and economic outcomes were determined using existing methods, including an agricultural land suitability analysis to quantify primary production, an estimation of carbon sequestration using historic vegetation datasets and GIS software analysis to determine spatial costings of revegetation and fencing. Economic outcomes are presented in raw values of pasture produced and carbon sequestered, and fencing and revegetation costs can be easily altered for enhanced usability and interoperability. This tool can provide property-specific data for almost 16,000 properties in a catchment area of over 130,000 km2 and 19,600 km of river length. Our results indicated that current financial incentives for revegetation rarely cover the cost of giving up pasture, but these costs may be compensated by social and ecological outcomes achieved over time. This method provides a novel way of informing alternative management approaches, such as incremental revegetation plans and the selective harvesting of timber from RBZ. The model provides an innovative framework for improved RBZ management and can be used to inform property-specific responses and guide discussion among stakeholders.

Carbon Farming: Prospects and Challenges

Carbon farming is a capable strategy for more sustainable production of food and other related products. It seeks to produce a diverse array of natural farming methods and marketable products simultaneously. According to the food and agriculture organization (FAO), agriculture, forestry, and other land-use practices account for 24% of global greenhouse gas (GHG) emissions and total global livestock emissions of 7.1 gigatons of CO2-equivalent per year, representing 14.5% of total anthropogenic GHG emissions. For example, an agroforestry system that deliberately integrates trees and crops with livestock in agricultural production could potentially increase carbon sequestration and decrease GHG emissions from terrestrial ecosystems, thus helping to mitigate global climatic change. Also, agroforestry is capable of generating huge amounts of bio-mass and is believed to be particularly suitable for replenishing soil organic carbon (SOC). SOC is a crucial indicator for soil fertility since the change in SOC can explain whether the land use pattern degrades or improves soil fertility. Moreover, SOC found in soil in the form of soil organic matter (SOM) helps to improve soil health either directly or indirectly. Thus, efforts should be made to convince farmers to increase their resource-use efficiency and soil conserving ability to get maximum benefits from agriculture. Therefore, this review aimed at clarification about carbon farming, modifications in carbon cycle and carbon sequestration during agricultural development, and benefits of agroforestry.

Current carbon prices do not stack up to much land use change, despite bundled ecosystem service co-benefits

Biological sources of carbon sequestration such as revegetation have been highlighted as important avenues to combat climate change and meet global targets by the global community including the Paris Climate Agreement. However, current and projected carbon prices present a considerable barrier to broad-scale adoption of tree planting as a key mitigation strategy. One avenue to provide additional economic and environmental incentives to encourage wider adoption of revegetation is the bundling or stacking of additional co-beneficial ecosystem services that can be realized from tree planting. Using the World's largest land-based carbon credit trading scheme, the Australian Emissions Reduction Scheme (ERF), we examine the potential for three pairs of ecosystem services, where the carbon sequestration value of land use change is paired with an additional co-benefit with strong prospects for local tangible benefits to land owners/providers. Two cases consider agricultural provisioning values that can be realized by the landowners in higher returns: increased pollination services and reduced lamb mortality. The third case examined payments for tree plantings along riparian buffers, with payments to farmers by a water utility who realizes the benefit from reduced treatment cost due to water quality improvements. Economic incentives from these co-benefit case studies were found to be mixed, with avoided treatment costs from water quality paired with carbon payments the most promising, while pollination and reduced lamb mortality paired with carbon payments were unable to bridge the economic gap except under the most optimistic assumptions. We conclude that the economics case for significant land use change are likely to be geographically dispersed and only viable in relatively niche landscape positions in high establishment, high opportunity cost areas even when carbon payments are augmented with the value of co-benefits classified as providing direct and local benefits.

Carbon farming for resilient rangelands: people, paddocks and policy

Carbon farming is a new land use option over extensive areas of the Australian rangelands. This land use change has been promoted by government incentives to mitigate climate change, with most of Australia’s land sector abatement to date being delivered in rangelands. Aside from these mitigation benefits, carbon farming has also demonstrated potential co-benefits that enhance socio-ecological resilience by diversifying land uses and income streams, providing opportunities for sustainable land management to enhance soil and vegetation and creating opportunities for self-organisation and collaboration. However, factors such as policy uncertainty, perceived loss of future land use flexibility and the potential for carbon farming eligibility to create social divisions may negatively affect resilience. In this paper we weigh up these risks, opportunities and co-benefits and propose indicators for measuring the impact of carbon farming on the resilience of rangeland systems. A set of land policy principles for enhancing resilience through carbon farming are also identified.

Deforestation in Australia: drivers, trends and policy responses

Australia’s terrestrial environment has been dramatically modified since European colonisation. Deforestation – the clearing and modification of native forest for agricultural, urban and industrial development – remains a significant threat to Australia’s biodiversity. Substantial policy reform over the last 40 years has delivered a range of policy instruments aimed to control deforestation across all Australian States and Territories. Despite these policy efforts – as well as strong governance and high institutional capacity – deforestation rates in Australia were nonetheless globally significant at the turn of this century. Legislation introduced in Queensland and New South Wales during the mid-2000s was at the time seen to have effectively ended broad-scale clearing; however, recent policy changes have raised concerns that Australia may again become a global hotspot for deforestation. Here, I describe the deforestation trends, drivers and policy responses in Australia over the last four decades. Using satellite imagery of forest cover and deforestation events across Australia between 1972 and 2014, I present a comprehensive analysis of deforestation rates at a fine resolution. I discuss trends in deforestation with reference to the institutional, macroeconomic and environmental conditions that are associated with human-induced forest loss in Australia. I provide a detailed history and critique of the native vegetation policies introduced across Australia over the last 40 years, including recent legislative amendments and reviews. Finally, I comment on future prospects for curbing deforestation in Australia, including the role of incentive-based policies such as carbon farming, private land conservation and biodiversity offsets. Despite being a highly active policy space, very little is known of the effectiveness of policy responses to deforestation in Australia, and whether the recent shift away from ‘command and control’ policies will necessarily lead to better outcomes. My analysis demonstrates the need for an effective policy mix to curb deforestation in Australia, including a greater focus on monitoring, evaluation and policy learning.

Carbon-neutral wool farming in south-eastern Australia

Ruminant livestock production generates higher levels of greenhouse gas emissions (GHGE) compared with other types of farming. Therefore, it is desirable to reduce or offset those emissions where possible. Although mitigation options exist that reduce ruminant GHGE through the use of feed management, flock structure or breeding management, these options only reduce the existing emissions by up to 30% whereas planting trees and subsequent carbon sequestration in trees and soil has the potential for livestock emissions to be offset in their entirety. Trees can introduce additional co-benefits that may increase production such as reduced salinity and therefore increased pasture production, shelter for animals or reduced erosion. Trees will also use more water and compete with pastures for water and light. Therefore, careful planning is required to locate trees where the co-benefits can be maximised instead of any negative trade-offs. This study analysed the carbon balance of a wool case study farm, Talaheni, in south-eastern Australia to determine if the farm was carbon neutral. The Australian National Greenhouse Gas Inventory was used to calculate GHGE and carbon stocks, with national emissions factors used where available, and otherwise figures from the IPCC methodology being used. Sources of GHGE were from livestock, energy and fuel, and carbon stocks were present in the trees and soil. The results showed that from when the farm was purchased in 1980–2012 the farm had sequestered 11 times more carbon dioxide equivalents (CO2e) in trees and soil than was produced by livestock and energy. Between 1980 and 2012 a total of 31 100 t CO2e were sequestered with 19 300 and 11 800 t CO2e in trees and soil, respectively, whereas farm emissions totalled 2800 t CO2e. There was a sufficient increase in soil carbon stocks alone to offset all GHGE at the study site. This study demonstrated that there are substantial gains to be made in soil carbon stocks where initial soils are eroded and degraded and there is the opportunity to increase soil carbon either through planting trees or introducing perennial pastures to store more carbon under pastures. Further research would be beneficial on the carbon-neutral potential of farms in more fertile, high-rainfall areas. These areas typically have higher stocking rates than the present study and would require higher levels of carbon stocks for the farm to be carbon neutral.

Land use efficiency: anticipating future demand for land-sector greenhouse gas emissions abatement and managing trade-offs with agriculture, water, and biodiversity

Competition for land is increasing, and policy needs to ensure the efficient supply of multiple ecosystem services from land systems. We modelled the spatially explicit potential future supply of ecosystem services in Australia's intensive agricultural land in response to carbon markets under four global outlooks from 2013 to 2050. We assessed the productive efficiency of greenhouse gas emissions abatement, agricultural production, water resources, and biodiversity services and compared these to production possibility frontiers (PPFs). While interacting commodity markets and carbon markets produced efficient outcomes for agricultural production and emissions abatement, more efficient outcomes were possible for water resources and biodiversity services due to weak price signals. However, when only two objectives were considered as per typical efficiency assessments, efficiency improvements involved significant unintended trade-offs for the other objectives and incurred substantial opportunity costs. Considering multiple objectives simultaneously enabled the identification of land use arrangements that were efficient over multiple ecosystem services. Efficient land use arrangements could be selected that meet society's preferences for ecosystem service provision from land by adjusting the metric used to combine multiple services. To effectively manage competition for land via land use efficiency, market incentives are needed that effectively price multiple ecosystem services.