Soil Carbon: Measurements & Markets

Measurement and Markets

Soil Carbon is too hard to measure, and the market won’t buy it unless we can measure it.

Soil Carbon is too hard to measure, and the market won’t buy it unless we can measure it.
Eliyahu Goldratt
1 – challenge your basic assumptions
2 – get your definitions clear

Challenge our basic assumptions

Basic assumption – we need to “measure” it in the first place
Can we challenge this?

Why would we need to measure Soil Carbon?

To know how much we have so we can sell it

To know how much we have so we can sell it
We need to satisfy the Market

Get your definitions clear

Measurement is the process of estimating the magnitude of some attribute of an object, such as its length, weight, or depth relative to some standard ( unit of measurement ), such as a meter or a kilogram .
( Wikipedia )
Get your definitions clear

Measurements always have errors and therefore uncertainties . In fact, the reduction —not necessarily the elimination— of uncertainty is central to the concept of measurement.
Measurement errors are often assumed to be normally distributed about the true value of the measured quantity.

Under this assumption, every measurement has three components: the estimate, the margin of error , and the confidence level — that is the probability that the actual magnitude lies within the margin of error.
For example, a measurement of the length of a plank might result in an estimate of 2.53 meters plus or minus 0.01 meter, with a level of confidence of 99%.

http://www.greenhouse.gov.au/inventory/methodology/index.html
This inventory methodology workbook presents the Australian methodology to estimate greenhouse gas emissions and sinks for the transport sector.
The methodology in this workbook was developed with input from researchers and other experts specialising in greenhouse gas emissions from transport sources.
It is based on the methodology first presented in the Australian Methodology for the Estimation of Greenhouse Gas Emissions and Sinks, Energy, Workbook for Transport (Mobile Sources), National Greenhouse Gas Inventory
Committee, Workbooks 2.0 (1994) and 2.1 (1998), Canberra.

It is part of a series that includes:
Australian Methodology for the Estimation of Greenhouse Gas Emissions and Sinks 2006:
Energy (Stationary Sources)
Energy (Transport)
Energy (Fugitive Fuel Emissions)
Industrial Processes
Solvents
Agriculture
Land Use, Land Use Change and Forestry
Waste

For what purpose?

For what purpose? We need to satisfy the Market We need to make Soil Carbon commercial

For what purpose? Commercialising Soil Carbon

For what purpose? Commercialising Soil Carbon Commerce

For what purpose? Commercialising Soil Carbon Commerce Customer

For what purpose? Commercialising Soil Carbon Commerce Customer Confident

For what purpose? Commercialising Soil Carbon Commerce Customer How Confident?

For what purpose? Commercialising Soil Carbon Commerce Customer Confident enough

For what purpose? Commercialising Soil Carbon Commerce Customer Confident enough NOT Certain

In a true market certainty is either impossible or fatal.

In a true market certainty is either impossible or fatal.
In a true market uncertainty is necessary and healthy.

From a commercial perspective, the spatial variability and other measurement uncertainties about Soil Carbon may actually be positives

A story about markets
Weaner steers
Export abattoir
UK wholesaler

Babcock and Brown
“ It all comes down to confidence ” says Peter Morgan, investment director at 452 Capital.
“ This is not a reflection on Phil, but when confidence is gone, not a lot of people want to be on that boat”

The Risk/Return Relationship

Insert carbon limit graph from presentation page 11

For what purpose
Enough investors
Enough confidence
Enough producers
Enough change in management
Enough carbon
Long enough
To meet or exceed their minimum expectations

CCX has developed standardized rules for issuing CFI contracts for the following types of projects:
Agricultural methane
Coal mine methane
Landfill methane
Agricultural soil carbon
Rangeland soil carbon management
Forestry
Renewable energy
Ozone depleting substance destruction
Other project types, to be approved on a project-by-project basis, may include:
Energy efficiency and fuel switching
Clean Development Mechanism (CDM) eligible projects

Agricultural Soil Carbon Offsets
Eligible agricultural soil carbon sequestration projects include continuous conservation tillage and grass planting.
Basic Specifications:
Conservation tillage: Minimum five year contractual commitment (2006-2010) to continuous no-till, strip till or ridge till on enrolled acres.
Grass planting: projects initiated on or after January 1, 1999 in CCX eligible counties may qualify.
Carbon sequestration projects must be enrolled through a CCX-registered Offset Aggregator.
All projects must be independently verified by a CCX-approved verifier.
CCX contracts are issued at a standardized rate of CO2 per acre per year to land managers who commit to continuous conservation tillage and/or maintenance grass cover plantings.

Rangeland Soil Carbon Management Offsets
Agricultural carbon emission reductions for improved rangeland management.
Basic Specifications:
Minimum 5 year contractual commitment.
Non-degraded rangeland managed to increase carbon sequestration through grazing land management that employs sustainable stocking rates, rotational grazing and seasonal use in eligible locations.
Restoration of previously degraded rangeland through adoption of sustainable stocking rates, rotational grazing and seasonal use grazing practices initiated on or after January 1, 1999.
Projects must take place within designated land resource regions.
Offsets are issued at standard rates depending on project type and location.
Rates vary from 0.12 to 0.52 metric tons of CO2 per acre per year.
All projects must be independently verified by a CCX-approved verifier.

One standard deviation away from the mean in either direction on the horizontal axis (the red area on the above graph) accounts for somewhere around 68 percent of the people in this group. Two standard deviations away from the mean (the red and green areas) account for roughly 95 percent of the people. And three standard deviations (the red, green and blue areas) account for about 99 percent of the people.

Soil carbon change and CO2 consumption per annum Estimated areas of each soil type within the >200mm average annual rainfall zone (adjusted for area loss due to National Parks etc) (Grace)

One standard deviation away from the mean in either direction on the horizontal axis (the red area on the above graph) accounts for somewhere around 68 percent of the people in this group. Two standard deviations away from the mean (the red and green areas) account for roughly 95 percent of the people. And three standard deviations (the red, green and blue areas) account for about 99 percent of the people.

For what purpose
Enough investors
Enough confidence
Enough producers
Enough change in management
Enough carbon
Long enough
To meet or exceed their minimum expectations
A CCX-type model meets this purpose.

OK – so what do we do next? If we can estimate soil carbon “enough” to meet or exceed the reasonable expectations of the market, what more do we need to get this moving?

Tim Flannery on Soil C
“ I think that soil carbon will be included in government policy when sufficient rural Australians ask for it to be.
There's still a lot of climate sceptics on the land, and they are heard by pollies very loudly.”
6 October 2008

Farmers must be part of carbon solution LUCY SKUTHORP 13/11/2008 National Farmers Federation president, David Crombie, believes it would be better for farmers if they were "part of the solution" if an emissions trading scheme is introduced, not sitting on the outside of the scheme as some grains groups suggested in recent weeks. “ We really have to look at the whole range of tools that farmers possess for taking carbon out of the atmosphere and putting it back in the soil where it belongs. So we're going to be hit with the costs, we should be researching the opportunities which are available to counter the other side…where farmers can actually earn credits.”

The Alliance for Abundant Food and Energy
The Alliance for Abundant Food and Energy brings together a broad group of visionary companies and organizations committed to sustainably and responsibly improving diets and reducing dependence on fossil fuels through increased agricultural productivity worldwide. They understand that through innovation, American agriculture can help meet the growing global demand for food and energy. Members include the Archer Daniels Midland (ADM) Company, DuPont, John Deere, Monsanto, and the Renewable Fuels Association .

The Alliance for Abundant Food and Energy
The Alliance for Abundant Food and Energy was formed to highlight the ability of Agriculture to meet both our future food and energy needs. Too often, the two are treated as an either/ or choice, but through better understanding of the potential of Agricultural innovation, the Alliance hopes to help people understand how we can achieve both. With members representing the entire spectrum of the Agricultural value chain, Alliance members are in a unique position to understand and address these important issues.

What happens when we organize? Most power occurs because one side is better organized than the other. Labor is usually less well organized than management, criminals are usually less well organized than the police, and customers are always less well organized than producers. The internet promises to change that. It does it occasionally, sort of randomly. Sometimes, users will rise up and complain (as they did at Facebook). Or voters will organize online and hurt (or help) a politician or candidate. Wikipedia works because so many contributors figured out how to self-organize into a group that produced something far more useful than a traditionally organized document. I think we're at the earliest possible beginning of the changes we're going to see because of this sort of grass roots coordination. Simple example: the Starbucks in Larchmont, NY keeps their thermostat at 64 degrees. And the stores in Breckenridge, Colorado keep their doors wide open all winter. If you're raging mad about energy waste, you could say something. And nothing would happen. But if customers organized and ten people said something or a hundred people said something... boom, new rules. The system doesn't know what to do with a movement. Seth Godin 15 April 2008

Soil Carbon: Measurements & Markets

by Carbon Coalition on Dec 28, 2008

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