The Carbon Market Explained
Ben Keogh, of Australian Carbon traders, discusses the carbon market.
What is the Carbon Market?
The carbon market is being designed as a policy response to address the rising amount of greenhouse gas emissions in the atmosphere, which many scientists believe, and many politicians believe, is leading to changes in our climatic system which affects our weather. And through that, we start to have impacts that start to broaden out and get into our agricultural sector because of increased temperatures or less frost days, more wind, and making farming more difficult.
Agricultural Emissions in Australia
The market is continuing to grow and develop. The land sector, or agricultural emissions, are about 15% of Australia’s emissions. There’s a large capacity to reduce those emissions and increase our property or productivity and also to drive natural resource management through private capital, through carbon farming.
And it’s continuously growing and continuously improving as the science improves, as the understanding within the capacity, as all the agronomists get more understanding and more knowledge around carbon farming. They’re learning how to incorporate it into traditional farming practices. All your emissions are essentially waste. So, we want to reduce that waste, keep it on your property. If it’s nitrous oxide going out you, that’s nitrous oxide you paid for that you’re not getting a benefit for.
Agriculture is an excluded sector. So, we don’t actually pay for emissions. So, whilst 15% of Australia’s emissions come from agricultural activity, the majority from enteric fermentation, basically from the burping of cattle, you’re not actually responsible for that. So, it is voluntary, you don’t have to do anything you don’t, if you don’t want to. You’re not going to get charged for your emissions, but a lot of the people that you purchase things from and a lot of people you sell to, they are going to be charged for emissions.
The interesting thing is that the very people that provide you with the raw materials that have the emissions embedded in them or the processes that create emissions from processing your products, they’re the ones that need your carbon credits. So, the industry needs to start developing these linkages and these bridges and these business models that allow people to actually spread the load, administrative load, and make it a lot more efficient for everybody right through the production cycle.
The creation of the carbon credits is by following the rules and the regulations in the process that are outlined in the carbon farming initiative guidelines. There’s actually a range of greenhouse gases such as methane and nitrous oxide and carbon dioxide and petro-fluoro-carbons but they are all converted back to what’s known as a carbon dioxide equivalent.
Because carbon dioxide is the most abundant greenhouse gas in the atmosphere, ignoring water vapor, they all have a different potential to warm the environment. For example, methane has twenty-one times the warming potential of Carbon Dioxide. Nitrous Oxide has three-hundred and twenty times the warming potential of Carbon Dioxide.
So, if you save one ton of going into the atmosphere. If you stop if by changing the feed in your cattle or dairy cows, for example, you’ll actually get 21 carbon credits. Generally original landfill facilities that is really good you pick agricultural bodies.
Where to Get Information About Carbon Farming
There are a number of private organizations out there as, well and the department of agriculture fisheries and forestry has got a lot of information as does the Department of Climate Change and Energy Efficiency. That’s where you go for the high level of stuff ’til you get the fairly basic stuff, and as their capacity and their knowledge builds can start to drill down to what it means to their enterprise and that’s when you might start looking for specialist information or specialist services, and by then you’ll my way to find it.