Draft IFOAM WB Position on Carbon Trading Markets
To be used to develop a World Board Position for the Developments of Projects as per GA
Motion 62, 2011
Author: Andre Leu, IFOAM President, March 22, 2014.
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EXECUTIVE SUMMARY
Carbon Market financing systems can only form a small part of the farm’s income
and should not be seen as a major income source
There are numerous co-benefits of ensuring better carbon management practices increases in soil carbon to improve climate change adaption through water use
efficiency, increased resilience and better fertility; biogas generation, energy
efficiency, encourage better composting techniques, greater uptake of compost use
and higher yields for traditional small holders
The concept of systems that are based on paying for multiple best practice, ecosystem and social services should be preferred over systems just limited to carbon
Insetting - where a dedicate price is set to go to producers within organic supply
chains would be more beneficial than the uncertainties of offsetting schemes
Insetting can also be used as a very effective to marketing tool to ‘sell’ the value of
the multifunction benefits of organic systems to consumers
BACKGROUND
IFOAM’s position and activities on Carbon Markets should be defined by a motion passed by
the General Assembly in Korea in October 2011.
Motion 62: Exclusion of Agriculture from Carbon Trading Mechanisms in speculative
markets
The World Board should promote the development of alternative financing systems to
support organic farming projects and agro-ecological approaches to agriculture that provide
a real solution of climate change for vulnerable populations and a fair compensation to
organic farmers for their contribution to mitigation and adaptation strategies.
At the same time, IFOAM should strongly advocate against including agriculture in any
speculative carbon market schemes, especially those controlled by the international finance
system.
This motion was reached after considerable debate over market based carbon trading
systems.
This paper outlines the types of financing systems that IFOAM could support as well as
those that should not be supported, giving examples of both. The issues of climate change
and carbon markets are very complex with many issues that need to be covered.
Consequently this document is divided into a SUMMARY OF THE PRIMARY DOCUMENT
that outlines the key points and a longer PRIMARY DOCUMENT that goes into more detail
in the key areas so that they can be covered adequately in order for people to fully
understand them.
SUMMARY OF THE PRIMARY DOCUMENT
Introduction
The world is failing to reduce greenhouse gas (GHG) emissions despite commitments made
under the Kyoto Protocol. According to the International Energy Agency (IEA, 2011), energyrelated CO2 emissions reached a record high of 30.6 gigatonnes (Gt) in 2010 – a 5 per cent
jump from the previous record in 2008. Emissions continue to increase despite the reduction
in economic activity due to the global economic and financial crisis.
The international agreements on climate change come under the United Nations Framework
Convention for Climate Change (UNFCCC). The only legally binding agreement is the Kyoto
Protocol (KP). The first commitment period of the (KP) and its Clean Development
Mechanism (CDM) led to a small reduction in emissions by the Annex 1 parties to the
Protocol, however they have failed to reduce the overall rate of global GHG emissions. The
CDM has had very little impact because its complex rules make it difficult to achieve
effective project results. A major issue has been GHG leakage (or rather outsourcing) from
the Annex 1 countries to developing countries. Under KP only Annex 1 countries are
committed to reduce GHG emissions whereas all the other countries are under no legally
binding obligation to reduce their emissions. Annex 1 emissions now account for less than
30% of global emissions. Any small gains that have been achieved by the Annex 1
countries in reducing GHG emissions have been more than lost by the polluting industries
moving to developing countries and importing GHG-intensive products from there. The nonAnnex 1 countries now account for the majority of the world’s GHG emissions caused by
expanding industries, increased use of motor vehicles, increased power generation from
fossil fuels, deforestation, the burning of savannahs and the loss of soil carbon through poor
agricultural practices.
The current state of the economies of developed countries, with their massive debts, means
that they do not have the funds to shift significantly to the use of renewable energies and
improve energy efficiency in the short term. Furthermore, the political climate has changed
since the United Nations Climate Change Conference in Copenhagen in 2009, with very few
governments willing to accept a slowdown in economic activity to meet emission reduction
targets or to introduce major GHG reduction strategies.
The Cancun Climate Change Agreements mean that sequestration and emission offsets
along with carbon markets will be part of any strategy mix to stabilize the level of
atmospheric CO2 and other GHGs. (UNFCCC, 2011)
The agreement in Copenhagen was to keep the rise in global temperatures to 2 degrees. A
number of climate change scientists are stating that the world has missed the threshold in
keeping the rise to 2 degrees and that the most likely scenario is between 3 and 4 degrees.
Consequently the world is facing catastrophic climate change events with a greater
frequency of extreme events such as more frequent and longer droughts, floods, summer
heat waves and winter freezes. Given the urgency of the situation it is critical that multiple
strategies are used to combat this. Until the world can move comprehensively to renewable,
low carbon and efficient energy systems, mitigation strategies have to be used as part of the
mix of strategies needed to reduce emissions.
1. Addressing Concerns about Soil Carbon Trading Systems
Schemes that pay farmers for sequestering carbon into the soil, not only will help to mitigate
and adapt to climate change, they could help alleviate rural poverty and provide a strong
financial incentive to adopt good farming practices; if they are done fairly and properly.
There are concerns being expressed by many NGOs, as they do not understand the
multifunctional benefits of increasing soil carbon. It is for this reason that these benefits have
been clearly articulated and elaborated in the PRIMARY DOCUMENT. These NGOs are
concerned about corporate land-grabs and the increase of no till GMO systems if money
was paid for the soil carbon sequestration. The data shows that on average conventional
farming systems can only reduce the rate of soil carbon loss, not increase soil carbon levels.
(Gattinger 2012, Sanderman 2010, La Salle and Hepperly 2008)
Preliminary research into no till herbicide systems shows that they only increase soil carbon
in some circumstances and this seems to level off after a period of years. Research by
Professor Rattan Lal and colleagues from Ohio State University compared carbon levels
between no-till and conventional tillage fields and found that, in some cases, carbon storage
was greater in conventional tillage fields. (Christopher, Lal and Mishra, 2009)
Given that there is very little evidence for economic levels of soil carbon sequestration in
conventional farming systems, including no till GMO systems, it is highly unlikely that there
will be any economic rationale for large scale land-grabs to generate soil carbon credits.
The majority of the current land-grabbing activities and forest clearing are for conventional
farming commodity production for the international commodity markets especially for GMO
maize, soy and cotton and for oil palms, rubber and sugar production. This is where the
concern needs to be focused, rather than on possible land grabbing for soil carbon trading
as this is something that does not exist and is unlikely to occur.
2. The Multiple Co-Benefits of Soil Carbon
There are multiple co-benefits that come with increasing the levels of soil carbon in the form
of soil organic matter.
Adaptation
The current United Nations negotiations on climate change are at a deadlock with limited
actions being taken to reverse the increases in greenhouse gases. This means that farmers
have to adapt to the increasing intensity and frequency of adverse weather events such as
droughts and intense damaging rainfall events.
More Resilient in Adverse Conditions
Organic farming systems are more resilient to weather extremes. Studies show that organic
systems have higher yields than conventional farming systems in periods of heavy rains and
droughts. (Drinkwater 1998, Welsh R. 1999, Pimentel D. 2005)
The Wisconsin (US) Integrated Cropping Systems Trials found that organic yields were
higher in drought years and the same as conventional in normal weather years. The
researchers attributed the higher yields in dry years to the ability of soils on organic farms to
better absorb rainfall. This is due to the higher levels of organic carbon, making the soils
more friable and better able to store and capture rain (Posner et al. 2008).
The Rodale FST showed that the organic systems produced 30 per cent more corn than the
conventional system in drought years (Pimentel D. 2005). ‘This yield advantage in drought
years is due to the fact that soils higher in carbon can capture more water and keep it
available to crop plants.’ (La Salle and Hepperly 2008)
Scientific research shows that organic systems are more resilient to the extreme
weather events caused by climate change due to higher level of soil organic matter.
Improved water use efficiency
Research shows that organic systems use water more efficiently due to better soil structure
and higher levels of humus and other organic matter compounds (Lotter, Seidel and
Liebhart, 2003; Pimentel, 2005).
Lotter and colleagues collected data for over 10 years during the Rodale FST. Their
research showed that the organic manure system and organic legume system (LEG)
treatments improve the soils' water-holding capacity, infiltration rate and water capture
efficiency. The LEG maize soils averaged a 13% higher water content than conventional
system (CNV) soils at the same crop stage, and 7% higher than CNV soils in soybean plots
(Lotter, Seidel and Liebhart, 2003).
The more porous structure of organically treated soil allows rainwater to quickly penetrate
the soil, resulting in less water loss from run-off and higher levels of water capture. This was
particularly evident during the two days of torrential downpours from hurricane Floyd in
September 1999, when the organic systems captured around double the water than the
conventional systems captured (Lotter, Seidel and Liebhart, 2003).
Long term scientific trials conducted by the Research Institute of Organic Agriculture (FiBL)
in Switzerland, comparing organic, biodynamic and conventional systems (DOK Trials) had
similar results showing that organic systems were more resistant to erosion and better at
capturing water. (Mader et al 2002)
The higher levels of organic matter allow the soil in the organic field to resist erosion
in heavy rain events and capture more water. (Source: FiBL DOK Trials)
Mitigation - Soil carbon sequestration through agricultural practices
A preliminary study by the Research Institute of Organic Agriculture (FiBL), Switzerland and
published by FAO, collated 45 comparison trials between organic and conventional systems
that used 280 data sets. (FAO, 2011) These studies included data from grasslands, arable
crops and permanent crops in several continents. A simple analysis of the data shows that
on average that the organic systems had higher levels of soil carbon sequestration
(Gattinger et al, 2011).
In a later peer reviewed meta-analysis study, published in the Journal PNAS, that used 41
comparison trials and removed four outliers in the previous data sets in order not to overestimate the data and to obtain a conservative estimate, Gattinger and colleagues reported
that organic systems sequestered 550 Kgs C per hectare per year. This equates to 2018.5
Kgs CO2 per hectare per year. (Gattinger et al., 2012)
A meta-analysis by Aguilera et al. published in the peer reviewed journal, Agriculture,
Ecosystems & Environment, of 24 comparison trials in Mediterranean climates between
organic systems and non-organic systems without organic supplements found that the
organic systems sequestered 970kg of C/ha/yr more than the non-organic systems. This
equates to 3559.9 kg of CO2/ha/yr (Aguilera et al., 2013). The data came from comparison
trials from Mediterranean climates in Europe, the USA and Australia.
Potential GHG Mitigation of organic practices
Based on the conservative figures of Gattinger et al., the widespread adoption of current
organic practices globally has the potential to sequester 10 Gt of CO2, which is just under 20
per cent of the world’s current GHG emissions.
Incentives for Farmers to Develop Best Practice in Increasing Soil Carbon
The substantial co-benefits of both mitigation and adaptation of increasing soil carbon
means that it is worthwhile to develop payment systems as incentives for farmers to develop
best practices. Given that current studies show that organic systems are superior in this area
it will also provide incentives for farmers to adopt more good organic practices.
Soil Carbon Mitigation buys the time needed to get the world to adopt renewal energy
sources. Given that urgent action is needed now, we need to actively support
methodologies that strip the CO2 out of the atmosphere and store it into the soil.
3. Developing the Soil Carbon Offset Methodologies
At this stage there are soil carbon offset methodologies for the voluntary market, however
there are none that are recognized by the UNFCCC or by government schemes such as the
EU trading scheme.
Soil carbon and agriculture are not part of any UNFCCC agreement and it could be 2020 at
the earliest before there are accepted methodologies. Part of the problem is involved in
establishing the best methods for measuring soil carbon. There are many that are available,
however some of the proposals by scientists are not economically feasible due to the
enormous amount of time and labor needed to take the soil samples. There is a major
disagreement amongst scientists and other stakeholders on one agreed method that would
be economically viable for a payment scheme.
4. Carbon Offset Markets
Most of these schemes come with disadvantages. The collapse of the price for carbon in
market based systems as well as some schemes where most of the price has gone towards
administering the scheme rather than paying the land holders, shows that there are major
problems with these schemes.
Price Volatility
The collapse of the price of CO2e in 2011-2012 in the European Union scheme, due to many
loopholes that allow companies to continue to pollute CO2 into the atmosphere at no cost,
shows the need for a realistic government mandated floor price for carbon. This is needed to
ensure that landholders are adequately compensated for their services of sequestering
CO2e and not subject to the vagaries of market price fluctuations. There is an urgent need to
end the loopholes in these systems.
Complex Financial Instruments
Most open market trading systems allow the carbon offset certificates to be freely traded like
shares, bonds or other financial instruments. These activities are called rent seeking by
economists. The markets ensure that they get a slice of the pie without contributing to the
activities, resulting in lower returns to the landholders who are doing the ecosystem services
of mitigating climate change. IFOAM needs to oppose these schemes as they exploit
farmers.
Excessive Administration Fees
Some scheme owners deduct a significant percentage for their administration costs and for
their profit. The remaining funds, sometimes as little as 10% to 25%, are paid to the
organizations and individuals who did the mitigation through tree planting, methane
avoidance etc. IFOAM needs to oppose these schemes as they exploit farmers.
Fixed Prices
On the other hand some voluntary schemes can fix a price that is independent from the
market and deliver a fair return. The difficulty is that many companies will opt to pay the
lower price for CO2e on the official markets rather than having a higher cost in a voluntary
system.
This has led to the collapse of several voluntary schemes such as the Chicago Climate
Exchange.
5. Insetting Markets
Insetting is where a dedicated price is returned to farmers within the cost of products. Very
significantly as the organic sector has dedicated market based supply chains, it allows the
sector to control the level of the price returned to farmers for their eco system and social
justice services so that it is not subject to the vagaries of price fluctuations that are
experienced in open market systems that occurs with offsetting.
It has the great advantage that the organic sector can build their own schemes without
having to comply with the difficult and in many cases impractical and unfair rules set by the
UNFCCC Clean Development Mechanism (CDM). It can mean rewarding farmers for all their
ecosystem services, such as sequestering soil carbon that are not covered by the CDM.
The CDM only covers new activities for landholders, so existing landholders that have been
engaging in good practices cannot be covered under proposed and existing CDM schemes.
An example would be the many thousands small holder farmers in Tigray, Ethiopia, who
have developed biogas systems. They cannot be compensated by the CDM however
farmers who do not have biogas can be compensated if they develop systems. Similarly the
Tigray farmers cannot be compensated for revegetating their landscape, whereas farmers
who have never done revegetation can receive CDM payments if they start to revegetate.
This is manifestly unfair to farmers who have already done the right thing by the environment
in avoiding and mitigating emissions. These farmers could receive payments under an
insetting system.
Insetting can ensure a number of important benefits:
There has been repeated concerns raised in the organic sector that very little of the premium
for organic products reaches the farmers. Insetting will ensure that an agreed amount will be
returned to the farmer on top of the price received. This fits firmly with the IFOAM principle of
Fairness.
Insetting can be used to pay farmers for all the multifunctional eco system and social justices
services that they deliver and not just be restricted to their beneficial climate change
activities by sequestering CO2. It is the ideal way, as stated in Motion 62, of providing
‘alternative financing systems to support organic farming projects and agro-ecological
approaches to agriculture that provide a real solution of climate change for vulnerable
populations and a fair compensation to organic farmers for their contribution to mitigation
and adaptation strategies.’
Insetting can also be used as an effective promotional tool for organic products. The correct
promotion on the packaging combined with other advocacy activities can let consumers
know that a dedicated amount of the price is compensating farmers for their ecosystem
services in mitigating climate change, increasing biodiversity, improving the environment, the
humane treatment of animals and for social justice for all the actors along the supply chain.
The Sustainability Flower
Examples of promoting the multifunctional benefits of organic agriculture
The Best Practice Guidelines could be used to quantify the multiple sustainable benefits to
develop a scheme that is based on the principle of continuous improvement for growers to
achieve best practices in sustainability.
Payment Systems – Balancing the Priorities
While insetting and offsetting schemes can have role in alleviating poverty, the amounts that
can be returned to small holder farmers will not be sufficient on their own to achieve this.
These income streams should only be seen as a minor part of a farm income – the primary
part needs to come from farming activities. The payments should be used as incentive
schemes to adopt good practices that will deliver higher yields as well as positive eco
system and social justice outcomes.
For many of the world’s small holder farmers who exist on less than US $400 per annum,
this extra income can bring benefits, however programs to generate this income should not
be at the expense of key programs that will lift yields and the prices that farmers receive
when they sell products. Increasing yields and prices received must be the primary aim in
alleviating hunger and poverty. Insetting and offsetting schemes should just be part of the
mix of the many strategies that are needed improve the quality of life of some of the poorest
and most marginalized people on the planet.
6. Main Recommendation
It would be worth developing a pilot insetting supply chain project and approach
organizations that are interested in investing in sustainable organic systems as partners for
funding and marketing. This should include 3rd party certification systems and particularly
with PGS systems.
PRIMARY DOCUMENT
This section goes into considerably more detail than the SUMMARY section so that people
can fully understand the complexity of the many issues surrounding carbon trading and soil
carbon. The SUMMARY section of this document has been based on this PRIMARY
DOCUMENT so there will be some repetition, however most the details is this section are
not covered in the summary.
Introduction
The world is failing to reduce greenhouse gas (GHG) emissions despite commitments made
under the Kyoto Protocol. According to the International Energy Agency (IEA, 2011), energyrelated CO2 emissions reached a record high of 30.6 gigatonnes (Gt) in 2010 – a 5 per cent
jump from the previous record in 2008. Emissions continue to increase despite the reduction
in economic activity due to the global economic and financial crisis.
The international agreements on climate change come under the United Nations Framework
Convention for Climate Change (UNFCCC). The only legally binding agreement is the Kyoto
Protocol (KP). The first commitment period of the (KP) and its Clean Development
Mechanism (CDM) led to a small reduction in emissions by the Annex 1 parties to the
Protocol, however they have failed to reduce the overall rate of global GHG emissions. The
CDM has had very little impact because its complex rules make it difficult to achieve
effective project results. A major issue has been GHG leakage (or rather outsourcing) from
the Annex 1 countries to developing countries. Under KP only Annex 1 countries are
committed to reduce GHG emissions whereas all the other countries are under no legally
binding obligation to reduce their emissions. Annex 1 emissions now account for less than
30% of global emissions. Any small gains that have been achieved by the Annex 1
countries in reducing GHG emissions have been more than lost by the polluting industries
moving to developing countries and importing GHG-intensive products from there. The nonAnnex 1 countries now account for the majority of the world’s GHG emissions caused by
expanding industries, increased use of motor vehicles, increased power generation from
fossil fuels, deforestation, the burning of savannahs and the loss of soil carbon through poor
agricultural practices.
The current state of the economies of developed countries, with their massive debts, means
that they do not have the funds to shift significantly to the use of renewable energies and
improve energy efficiency in the short term. Furthermore, the political climate has changed
since the United Nations Climate Change Conference in Copenhagen in 2009, with very few
governments willing to accept a slowdown in economic activity to meet emission reduction
targets or to introduce major GHG reduction strategies. An example of this is Australia
introduced a Carbon Tax in 2011 that was to become an Emissions Trading Scheme linked
with the EU scheme. It became a major election issue with the government losing power and
the new government having a mandate to end it in September 2013.
The Cancun Climate Change Agreements mean that sequestration and emission offsets
along with carbon markets will be part of any strategy mix to stabilize the level of
atmospheric CO2 and other GHGs. (UNFCCC, 2011)
The agreement in Copenhagen was to keep the rise in global temperatures to 2 degrees.
The small island states believe that this is too high and want it kept to 1.5 degrees as they
believe that many of their countries will disappear from rising sea levels with a 2 degree rise
in temperature. In fact this is already an issue with some of the low lying atoll countries in the
Pacific going under water in king tides due to the current rises in sea level. Australia is
already taking in the first of these climate change refugees and this will increase as sea
levels continue to rise.
A number of climate change scientists are stating that the world has missed the threshold in
keeping the rise to 2 degrees and that the most likely scenario is between 3 and 4 degrees.
Consequently the world is facing catastrophic climate change events with a greater
frequency of extreme events such as more frequent and longer droughts, floods, summer
heat waves and winter freezes. Given the urgency of the situation it is critical that multiple
strategies are used to combat this. Until the world can move comprehensively to renewable,
low carbon and efficient energy systems, mitigation strategies have to be used as part of the
mix of strategies needed to reduce emissions.
GHG Schemes can Help Alleviate Poverty
The Cancun agreements have proposed that three hundred billion dollars be put into a
Green Fund to be used for the funding of climate change mitigation and adaption activities
including emission offsets through both direct payments and market based systems. The
United Nations Food and Agriculture Organization (FAO) believes that 70% of the potential
for agricultural mitigation benefits could go to farmers in developing countries. (FAO, 2012)
Schemes that pay farmers for sequestering or avoiding GHG emissions, could help as part
of the numerous measures that are needed to alleviate rural poverty. They can also provide
a strong financial incentive to adopt good farming practices; if they are done fairly and
properly. Furthermore there is an opportunity for these funds to go to organic farmers.
Excluding organic farmers from receiving funding, while conventional farmers can be paid,
would be grossly unfair.
Concerns have been raised that the emission offset schemes will favor the large scale
farmers over small holder farmers, however there are successful small holder offset
schemes.
The most practical way to ensure small holder farmers receive funding is for them to be
organized into groups. The organic sector already does this with various group
certification/guarantee schemes, including third-party systems, participatory guarantee
systems (PGS) and farmer coops. It would be relatively simple to include GHG schemes into
current organic guarantee systems.
These systems should be grower controlled and designed to ensure fairness and
transparency so that the funds reach the farmers and their communities rather than
benefiting the money market traders.
Done properly, these schemes could be seen as social justice systems, where the CO2polluting industries would be paying many of the poorest people on the planet for their
ecosystem services of mitigating GHGs. Well-designed schemes have the potential to
reduce GHG emissions in the atmosphere, increase adaptation as well as alleviate rural
poverty in developing countries, and they would provide a substantial financial incentive to
adopt good organic farming practices.
Section 1 - Overview of Different Scheme Concepts
Schemes could be financed through government payments, government-administered cap
and trade systems, carbon taxes or through voluntary market schemes.
Direct Payments
Direct payment schemes such as the European Union Common Agricultural Policy or the
current subsidies in the developing world for synthetic fertilizers and pesticides could be
redesigned to pay farmers for practices that are proven to mitigate GHGs and increase
adaptation to climate extremes. The Green Fund can mostly be accessed by governments
so there is an opportunity to advocate for direct payments.
Cap and Trade Systems
Cap and trade systems put a cap on the total amount of emissions, and, by taxing emissions
that are above the targets, they force the emitters to reach their targets through energy
efficiency, the adoption of renewable energy or by offsets. The cap should be progressively
lowered, thereby forcing the industries to continuously find ways to reduce emissions.
If the company emits more greenhouse gases than the capped limit it needs to offset them
by sequestering them out of the atmosphere. This is usually achieved by growing trees and
storing the CO2 as wood. However a system where these offsets could be used to pay
farmers for their multiple ecosystem services of mitigating GHGs, increasing adaption and
looking after the environment would be preferable.
Currently most offsets are sold as certificates that document multiple of tonnes of CO2
equivalents expressed as CO2e. All greenhouse gases are measured in CO2 units. One
methane (CH4) molecule is equivalent to 72 CO2 molecules and one nitrous oxide (N2O)
molecule is equivalent to 310 CO2 molecules in their greenhouse gas effects in the
atmosphere.
These certificates are traded on Carbon Markets – the largest being the European Climate
Exchange. The advantage of this system is that polluter directly pays the organization that is
improving the environment by sequestering the greenhouse gases, minus the broker’s
commission.
Carbon Taxes
Some countries and pundits believe that a direct tax is the best way to reduce greenhouse
gas emissions. The belief is that the tax will make carbon dioxide emitting energy sources
such as coal, natural gas, petrol and diesel more expensive, therefore limiting the use.
However there is little evidence that these types of taxes work to reduce greenhouse gas
sources such as reducing the amount of petrol sold or electricity produced by coal. This was
seen in the dramatic rise in fuel prices in 2007 - 2008. The price rise did not slow demand. It
was only a fall in most markets due to the global financial crisis at the end of 2008 that saw a
reduction in price and the amount used. Both demand and the prices for fuel grew higher
after 2009 when the world economy started to recover and then fell again due to slowing
economies in Europe and the USA. The prices in 2013 as well as the volumes used are
rising again as the world economy improves.
The introduction of a carbon tax in Australia did not have any effect in reducing GHGs,
despite increasing the cost of carbon based energy sources.
Unlike the cap and trade systems where the money is supposed to be paid directly from the
polluter to the sequesterer, the tax is collected by the government and goes into general
revenue. There is no guarantee that it will be paid to the individuals and organizations that
sequester greenhouse gases or for any other activity that will reduce greenhouse gases.
Australia is an example where most of the carbon tax money was used for purposes other
than reducing greenhouse gas emissions and very few landholders received financial
compensation for the CO2 that they had sequestered and mitigated.
Voluntary Offset and Labeling Schemes
There are a range of voluntary schemes. Most of these involve the planting of trees through
various corporate social responsibility mechanisms. Some of the most common are where
airlines charge customers a small fee to fly carbon neutral.
Other examples are voluntary schemes with labeling claims such as the Carbon Foot Print or
the Austrian scheme for organic products that documents the CO2 lifecycle of the products.
These labeling systems are designed to differentiate products at the point of sale to obtain a
premium from consumers willing to pay more for climate change friendly products.
Disadvantages
Most of these schemes also come with disadvantages. The collapse of the price for carbon
in market based systems as well as some schemes where most of the price has gone
towards administering the scheme rather than paying the land holders, shows that there are
major problems with these schemes.
Price Volatility
The collapse of the price of CO2e in 2011-2012 in the European Union scheme, due to many
loopholes that allow companies to continue to pollute CO2 into the atmosphere at no cost,
shows the need for a realistic government mandated floor price for carbon. This is needed to
ensure that landholders are adequately compensated for their services of sequestering
CO2e and not subject to the vagaries of market price fluctuations. There is an urgent need to
end the loopholes in these systems.
Complex Financial Instruments
Most open market trading systems allow the carbon offset certificates to be freely traded like
shares, bonds or other financial instruments. These activities are called rent seeking by
economists. The markets ensure that they get a slice of the pie without contributing to the
activities, resulting in lower returns to the landholders who are doing the ecosystem services
of mitigating climate change.
Excessive Administration Fees
Some scheme owners deduct a significant percentage for their administration costs and for
their profit. The remaining funds, sometimes as little as 10% to 25%, are paid to the
organizations and individuals who did the mitigation through tree planting, methane
avoidance etc.
Fixed Prices
On the other hand some voluntary schemes can fix a price that is independent from the
market and deliver a fair return. The difficulty is that many companies will opt to pay the
lower price for CO2e on the official markets rather than having a higher cost in a voluntary
system.
This has led to the collapse of several voluntary schemes such as the Chicago Climate
Exchange.
Section 2 - Examples of Existing or Newly Proposed Projects
The following are examples of the types of current offset projects that IFOAM can support as
they comply with Motion 62.
SEKEM in Egypt
SEKEM is the oldest biodynamic farm in Egypt. Since January 2007, they have offset
methane emissions through their compost project. By the correctly composting organic
material they were able to reduce methane emissions by the equivalent of 303,757 tonnes of
CO2e. (Helmy Abouleish Pers Com)
Sekem worked in partnership with IFOAM member, Soil & More, to generate Carbon Credits
(verified emission reductions) from composting, implementing an UNFCCC approved
methodology.
During the composting process, because these methane emissions are avoided, tradable
Carbon Credits can be generated. All Soil & More projects are verified by a DOE
(Designated Operational Entity, accredited by the UNFCCC).
Carbon Credits generated by Soil & More are high quality credits, as they:
 Are embedded into the agricultural supply-chain
 Generate income to make compost projects feasible.
 Are independently verified by an UNFCCC accredited third party.
 Can be derived from small, - medium and large scale projects.
 Furthermore, each of their projects stimulates the local economy and provides people
with year round employment.
CARE International
One of the most successful GHG offset projects has been developed by the not for profit
NGO, Care International. This project works with small holder farmers in the developing
world by helping them to buy or build efficient cook stoves. These stoves use far less fuel
than the normal stoves, thereby:
 Preserving forests by reducing wood collection
 Reducing the burning of precious manure
 Significantly reducing the amount of CO2 released into the atmosphere
 The cook stove scheme works with small holders
 One improved cook stove can generate 3t CO2 credits a year - $36 per year for farm
families in 2011 (less than $18 PA at the current price (2013) when the administration
fees are deducted)
Insetting
The Fair Trade Labeling Organizations (FLO) announced their new project called Fair
Carbon Market Opportunities at the UNFCCC Climate Conference in Durban in December
2011. This project will have the following elements:
 The concept of ‘Insetting’ was put forward where actors along a supply chain offset
their carbon emissions within the supply chain
 Pay the land holders for the carbon that they sequester and for emissions avoidance
 Designed for Small Holders
 Can be used in whole of landscape systems
The new concept of ‘Insetting’ is highly applicable to the organic sector. Insetting is where a
dedicate premium is built into the price. All the actors along the supply chain, from
wholesalers to consumers contribute to this premium. This premium is directly paid to
farmers for their eco-system services in mitigating GHGs and looking after the environment.
While FLO is yet to implement insetting projects, Soil & More has started pilot projects in
organic supply chains. Insetting has the potential for wide scale application as a voluntary
market scheme in dedicated organic supply chains. This will be elaborated further in this
paper
Section 3 - The Development of Alternative Financing Systems
An important aspect of the Motion on Carbon Markets states:
‘The World Board should promote the development of alternative financing systems to
support organic farming projects and agro-ecological approaches to agriculture that provide
a real solution of climate change for vulnerable populations and a fair compensation to
organic farmers for their contribution to mitigation and adaptation strategies.’
In order to achieve ‘the development of alternative financing systems’ IFOAM should look at
developing systems where the multifunctional benefits of good practice organic methods in
mitigating climate change and improving the environment can be integrated into payment
systems to assist farmers, particularly small holders in the developing world.
This process was started in the United Nations Climate Change Conference in Copenhagen
in December 2009. Thanks to funding from FAO and the Research Institute of Organic
Agriculture (FiBL), IFOAM partnered with several organic sector organizations in the
formation of the Round Table on Organic Agriculture and Climate Change (RTOACC). As
part of the outcomes of this project FiBL conducted research on the viability of various
carbon markets that would be applicable to organic agriculture. This was published as a
chapter in a book on RTOACC research projects by the United Nations Food and Agriculture
Organization (FAO 2011).
The FiBL research identified the following areas where there could be useful payments for
the mitigation potential of organic farming.
These included:
 Replacement of chemical fertilizers – reduction in energy use in the production of
these fertilizers and avoidance of nitrous oxide emissions;
 Production and application of compost - methane avoidance
 Application of legumes in crop rotations – avoidance of synthetic nitrogen fertilizers,
reducing nitrous oxide and increasing soil carbon;
 Avoidance of burning agricultural waste and residues though green manuring,
compost and biogas generation;
 Biogas generation to avoid methane emissions
 Increases of soil organic matter to increase soil carbon sequestration.
The researchers found that methods that avoided methane emissions, such as optimized
manure management and generating biogas from manures and biomass have the greatest
potential to earn money from offset credits.
Integrated Payment Systems
The ideal is to develop payment systems that reward organic farmers for a combination of
these benefits. Rather than limiting payments to just one GHG offset method, the most
effective system would be to integrate a range of good practices so that farmers receive
higher payments for delivering multiple eco system services to mitigate GHGs and improve
the environment.
Potential Offset Projects
The FiBL research for RTOACC identified the ‘low hanging fruit’ that will give the most
immediate benefits. These are methane avoidance through composting, manure
management and biogas digesters. In some cases there are existing methodologies such as
the one used by Soil & More and Sekem with composting that can be scaled up quite quickly
to provide benefits to farmers.
Other projects such as soil carbon sequestration will require significantly more research
especially as there are no methodologies that are accepted under the UNFCCC processes,
although there are methodologies that are accepted by some voluntary markets.
The critical issue is that there will be a need for considerable research to develop the various
offset methodologies and methods of integrating them to ensure adequate payments to
farmers.
Short Term Offset Projects
The greatest immediate benefits will be concentrating on developing projects where there
are established offset methodologies and where the outcomes will result in higher payments
to farmers.
1. Composting
As stated above there are successful examples of methodologies for methane avoidance in
good practice composting in organic systems.
2. Biogas
Biogas generation has the potential for numerous co-benefits. Offsets can be generated for
methane avoidance and, in the future, for energy savings.
The longer term benefits are the use of the biogas slurry, which is in effect composted due to
the fermentation process, to improve soil fertility and crop yields in farming systems. The
results of the Tigray project in Ethiopia (see Case Study – Tigray Project) found that this led
to greater than 100% increases in yields for small holder farmers and helped to lift them out
of hunger and extreme poverty.
3. Revegetation
There are numerous offset methodologies and operating schemes for revegetation. These
mostly work on larger scales and the experience of organizations such as Care International
show very small returns for small holder farmers due to limited areas to plant trees and the
long time frames – 20 years or more to get good returns.
However there are projects that are looking at working at community landscape scale levels.
These projects can bring multiple co-benefits such as reducing soil erosion, restoring the
hydrology of water courses and providing habitat for beneficial species. In the Tigray Project
the revegetation of degraded areas provided a significant proportion of the biomass need for
composting and biogas digesters. It also provided a secondary income from the honey
through bee keeping.
There are many other benefits such as tree planting to prevent soil erosion, to stabilize steep
slopes and provide shade for organic coffee production in Oaxaca in Mexico and shade
grown coca in Africa and Latin America.
One of the most successful examples is Evergreen Agriculture where the right selection of
legume trees planted in fields significantly increased crop production in sorghum and maize
in the drier areas of Africa.
A significant level of concern has been raised about proposals to grow forests on good
agricultural land, thereby taking these out of food production. IFOAM should oppose these
types of projects, especially where they are land grabbing exercises that displace the local
people. IFOAM should advocate that revegetation should be confined to marginal crop
production areas such as hill slopes, water courses, field boundaries etc where there are
considerable environmental benefits of revegetation.
Concerns have also been raised about proposals to plant forests in order to turn the wood
into biochar and burying them into the soil to generate soil carbon credits. IFOAM should
oppose this as an offset methodology as it is potentially a land grabbing exercise that only
delivers financial benefits for the scheme operators.
At the same time IFOAM should continue to oppose the clearing of old growth forests for
agriculture. This is not only the cause of the greatest extinction event in the world’s history,
called the Holocene Extinction, it is also one of the major causes of greenhouse gas
emissions.
Long Term Offset Research Projects
1. Energy Saving – Reducing Fossil Fuel Use
The use of fossil fuels is a major contributor to GHG emissions. There are offset
methodologies that can apply to reducing fossil fuel use, however at this stage it is unclear
how they could be used to provide payments to farmers, especially to small holders.
Despite these difficulties there is good potential for including this into a comprehensive
scheme as there is good evidence that organic systems are more energy efficient than
conventional farming systems.
Published peer review scientific studies in North America and Europe show that good
practice organic agriculture emits less greenhouse gases than conventional agriculture.
(Mader et al, 2002, Pimentel 2005, Reganold et al, 2001)
Two published studies (Mader et al. 2002, Pimentel 2005), in peer reviewed scientific
journals, of long-term comparison trials (21 and 22 years) of conventional and organic
systems have found that the organic systems, use less fossil fuels and therefore emit
significantly lower levels of (around 30% less) greenhouse gases
The long-term apple comparison trial conducted by Reganold et al. in the USA, showed that
the organic system was more efficient in it energy use. ‘When compared with the
conventional and integrated systems, the organic system produced sweeter and less tart
apples, higher profitability and greater energy efficiency.’ (Reganold et al, 2001)
Organic farmers should be financially rewarded for following good practices in energy
efficiency and there are wider benefits to the world in encouraging more farmers to adopt
organic practices to ameliorate some of the agreed causes of climate change.
2. Potential for Soil Carbon Sequestration
Soil Carbon Sequestration is one of the most contentious issues due to a number of
reasons. Consequently there is a need to go into great detail in this discussion paper to
understand the complexities around the issues and the massive potential benefits of soil
carbon systems.
Many NGOs fear that it will lead to land-grabbing while at the same time many scientists
believe that it is not possible to sequester significant levels of CO2 under the current
conventional farming systems. There is also widespread debate around the science of the
measuring methodologies that could be used in soil carbon offset schemes.
Soils as a Carbon Sink
Soils are the greatest carbon sink after the oceans. According to Professor Rattan Lal of
Ohio State University there are over 2,700 Gt of carbon is stored in soils worldwide. This is
considerably more than the combined total of 780 Gt in the atmosphere and the 575 Gt in
biomass. (Lal, 2008)
The amount of CO2 in the oceans is already causing a range of problems, particularly for
species with calcium exoskeletons such as corals and shell fish. Scientists are concerned
that the increase in acidity caused by higher levels of CO2 is damaging these species and
threatens the future of marine ecosystems such as the Great Barrier Reef. The world’s
oceans, like the atmosphere, cannot absorb any more CO2 without causing potentially
serious environmental damage to many aquatic ecosystems (Hoegh-Guldberg et al., 2007).
Despite the fact that soil is the largest repository of carbon after the oceans and has the
potential to sequester significantly more CO2 than biomass, neither soil nor agriculture is
incorporated into any formal agreement of the United Nations Framework Convention on
Climate Change.
This needs to be changed because according to the United Nations Food and Agriculture
Organization ‘Agriculture not only suffers the impacts of climate change, it is also
responsible for 14 percent of global greenhouse gas emissions. But agriculture has the
potential to be an important part of the solution, through mitigation — reducing and/or
removing — a significant amount of global emissions.’ (FAO, 2012)
Soil carbon sequestration through agricultural practices
The ability of soils to absorb enough CO2 in order to stabilize current atmospheric CO2 levels
is a critical issue, and there is a major debate over whether this can be achieved through
farming practices. (Lal, 2007; Sanderman et al, 2010)
A preliminary study by the Research Institute of Organic Agriculture (FiBL), Switzerland and
published by FAO, collated 45 comparison trials between organic and conventional systems
that used 280 data sets. (FAO, 2011) These studies included data from grasslands, arable
crops and permanent crops in several continents. A simple analysis of the data shows that
on average that the organic systems had higher levels of soil carbon sequestration
(Gattinger et al, 2011).
Dr Andreas Gattinger and colleagues wrote (2011:16): ‘In soils under organic management,
the SOC stocks averaged 37.4 tonnes C ha-1, in comparison to 26.7 tonnes C ha-1 under
non-organic management.’
This means that the average difference in between the two management systems (organic
and conventional) was 10.7 tonnes of C. Using the accepted formula that soil organic carbon
(SOC) x 3.67= CO2 this means an average of more than 39.269 tonnes of CO2 was
sequestered in the organic system than in the conventional system.
The average duration of management of all included studies was 16.7 years. (Gattinger et al,
2011) This means that an average of 2,351 kgs of CO2 was sequestered per hectare every
year in the organic systems compared to the conventional systems.
In a later peer reviewed meta-analysis study, published in the Journal PNAS, that used 41
comparison trials and removed four outliers in the previous data sets in order not to overestimate the data and to obtain a conservative estimate, Gattinger and colleagues reported
that organic systems sequestered 550 Kgs C per hectare per year. This equates to 2018.5
Kgs CO2 per hectare per year. (Gattinger et al., 2012)
Potential of organic practices
Based on these figures, the widespread adoption of current organic practices globally has
the potential to sequester 10 Gt of CO2, which is just under 20 per cent of the world’s current
GHG emissions.
Total Agricultural Land
Grassland
3,356,940,000 ha
Arable crops
1,380,515,000 ha
Permanent crops
146,242,000 ha
Total
4,883,697,000 ha Source: (FAO, 2010)
Organic @ 2 tons per hectare:
Annual GHG emissions:
2007)
9.76 Gt of CO2 (Gattinger et al., 2012)
49 Gt of CO2e (IPCC Fourth Assessment Report (AR4),
Potential exists for higher levels of CO2 sequestration
All data sets that use averaging have outlying data. These are examples that are
significantly higher or significantly lower than the average. They are always worth examining
to find out why? Research into them will allow an understanding on what practices
significantly increase soil carbon and those that decrease or do not increase it.
There are several examples of significantly higher levels of carbon sequestration than the
averages quoted in the studies above. The Rodale Institute in Pennsylvania, USA, has been
conducting long-running comparisons of organic and conventional cropping systems for over
30 years that confirm that organic methods are effective at removing CO2 from the
atmosphere and fixing it as organic matter in the soil. La Salle and Hepperly (2008:5) wrote:
‘In the FST [Rodale Institute farm systems trial] organic plots, carbon was sequestered into
the soil at the rate of 875 lbs/ac/year in a crop rotation utilizing raw manure, and at a rate of
about 500 lbs/ac/year in a rotation using legume cover crops.
During the 1990s, results from the Compost Utilization Trial (CUT) at Rodale Institute – a 10year study comparing the use of composts, manures and synthetic chemical fertilizer – show
that the use of composted manure with crop rotations in organic systems can result in
carbon sequestration of up to 2,000 lbs/ac/year. By contrast, fields under standard tillage
relying on chemical fertilizers lost almost 300 pounds of carbon per acre per year.’ (La Salle
and Hepperly 2008:5).
Converting these figures into kilograms of CO2 sequestered per hectare using the accepted
conversion rate of 1 pound per acre = 1.12085116 kg/ha and soil organic carbon x 3.67=
CO2, gives the following results:

The FST legume based organic plots showed that carbon was sequestered
into the soil at the rate of about 500 lbs/ac/year. This is equivalent to a sequestration
rate of 2,055.2kg of CO2/ha/yr.

The FST manured organic plots showed that carbon was sequestered into the
soil at the rate of 875 lbs/ac/year. This is equivalent to a sequestration rate of 3,596.6
kg of CO2/ha/yr.

The Compost Utilization Trial; showed that carbon was sequestered into the
soil at the rate of 2,000 lbs/ac/year. This is equivalent to a sequestration rate of
8,220.8 kg of CO2/ha/yr.
The Potential in Mediterranean climates
A meta-analysis by Aguilera et al. published in the peer reviewed journal, Agriculture,
Ecosystems & Environment, of 24 comparison trials in Mediterranean climates between
organic systems and non-organic systems without organic supplements found that the
organic systems sequestered 970kg of C/ha/yr more than the non-organic systems. This
equates to 3559.9 kg of CO2/ha/yr (Aguilera et al., 2013). The data came from comparison
trials from Mediterranean climates in Europe, the USA and Australia.
The Potential in desert climates
The Louis Bolk Institute and Soil & More, two organizations based in the Netherlands, have
made a study to calculate soil carbon sequestration at Sekem, the oldest organic farm in
Egypt. Their results show that on average Sekem's management practices have resulted in
900 kgs of Carbon being stored in the soil per hectare per year in the fields that were 30
years old. Using the accepted formula of Soil Organic Carbon x 3.67 = CO2, this means that
Sekem has sequestered 3,303 kgs of CO2 per hectare per year for 30 years. (Luske and van
der Kamp, 2009; Koopmans et al, 2011)
Based on these figures, the widespread adoption of Sekem's practices globally has the
potential to sequester 16 Gt of CO2, which is around 30% of the world's current greenhouse
gas emissions into soils. (4,883,697,000 ha x 3,303 kgs = 16.1 gt CO2/yr)
The urgent need for more peer reviewed research
It is not the intention of this paper to use the above types of generic exercises of globally
extrapolating data as scientific proof of what can be achieved by scaling-up organic systems.
These types of very simple analyses are useful for providing a conceptual idea of the
considerable potential of organic farming to reduce GHG emissions on a landscape scale.
The critical issue here is that urgent peer reviewed research is needed to understand how
and why (and for the sceptics – if) these systems sequester significant levels of CO2 and
then look at how to apply the findings for scaling-up on a global level in order to achieve a
significant level of GHG mitigation.
The Multiple Co-Benefits of Soil Carbon
Mitigation is only one benefit of soil carbon. There are multiple co-benefits that come with
increasing the levels of soil organic matter.
Adaptation
The current United Nations negotiations on climate change are at a deadlock with limited
actions being taken to reverse the increases in greenhouse gases. This means that farmers
have to adapt to the increasing intensity and frequency of adverse weather events such as
droughts and intense damaging rainfall events.
More Resilient in Adverse Conditions
Organic farming systems are more resilient to weather extremes. Studies show that organic
systems have higher yields than conventional farming systems in periods of heavy rains and
droughts. (Drinkwater 1998, Welsh R. 1999, Pimentel D. 2005)
The Wisconsin (US) Integrated Cropping Systems Trials found that organic yields were
higher in drought years and the same as conventional in normal weather years. The
researchers attributed the higher yields in dry years to the ability of soils on organic farms to
better absorb rainfall. This is due to the higher levels of organic carbon, making the soils
more friable and better able to store and capture rain (Posner et al. 2008).
The Rodale FST showed that the organic systems produced 30 per cent more corn than the
conventional system in drought years (Pimentel D. 2005). ‘This yield advantage in drought
years is due to the fact that soils higher in carbon can capture more water and keep it
available to crop plants.’ (La Salle and Hepperly 2008)
Improved water use efficiency
Research shows that organic systems use water more efficiently due to better soil structure
and higher levels of humus and other organic matter compounds (Lotter, Seidel and
Liebhart, 2003; Pimentel, 2005).
Lotter and colleagues collected data for over 10 years during the Rodale FST. Their
research showed that the organic manure system and organic legume system (LEG)
treatments improve the soils' water-holding capacity, infiltration rate and water capture
efficiency. The LEG maize soils averaged a 13% higher water content than conventional
system (CNV) soils at the same crop stage, and 7% higher than CNV soils in soybean plots
(Lotter, Seidel and Liebhart, 2003).
The more porous structure of organically treated soil allows rainwater to quickly penetrate
the soil, resulting in less water loss from run-off and higher levels of water capture. This was
particularly evident during the two days of torrential downpours from hurricane Floyd in
September 1999, when the organic systems captured around double the water than the
conventional systems captured (Lotter, Seidel and Liebhart, 2003).
Long term scientific trials conducted by the Research Institute of Organic Agriculture (FiBL)
in Switzerland, comparing organic, biodynamic and conventional systems (DOK Trials) had
similar results showing that organic systems were more resistant to erosion and better at
capturing water. (Mader et al 2002)
Effects of organic soil amendments
The name organic farming comes from the fact that recycling organic matter is the primary
basis for nutrient management in these systems. Jerome Irving Rodale was the first major
international author and publisher of books and magazines on organic farming. His primary
magazine was called ‘Organic Farming and Gardening’. It was based in the USA; however
this publication was widely read by many thousands of people around the world from the
1940s onwards. He actively promoted the name ‘organic farming’ in this and other
publications and the name ‘organic’ quickly dominated over the numerous other names like
natural, permanent, biological and ecological that were being used at the time to describe
the faming system.
Rodale’s use of the term ‘Organic Farming’ was specific to the farming system’s use of
organic matter as the primary source of soil health and plant nutrition in contrast to the use
of synthetic chemical fertilizers in conventional farming. Rodale repeatedly stated that the
fundamental basis of organic farming was to improve soil health and build up humus through
a variety of practices that recycled organic matter.
There is a very strong body of evidence showing that the addition of organic matter improves
soil carbon levels and this is more effective in doing so than synthetic water soluble
fertilisers. Professor Rattan Lal gives an extensive list from the scientific literature that
demonstrates this. ‘Application of manures and other organic amendments is another
important strategy of SOC sequestration. Several long-term experiments in Europe have
shown that the rate of SOC sequestration is greater with application of organic manures than
with chemical fertilizers (Jenkinson 1990: Witter et al. 1993; Christensen 1996; Korschens &
Muller 1996; Smith et al. 1997). Increase in the SOC pool in the 0–30 cm depth by long-term
use of manure compared to chemical fertilizers was 10% over 100 years in Denmark
(Christensen 1996), 22% over 90 years in Germany (Korschens & Muller 1996), 100% over
144 years at Rothamsted, UK (Jenkinson 1990) and 44% over 31 years in Sweden (Witter et
al. 1993). The data from Morrow plots in Illinois indicated that manured plots contained
44.6 Mg ha−1 more SOC than unmanured control (Anderson et al. 1990). In Hungary, Arends
& Casth (1994) observed an increase in SOC concentration by 1.0–1.7% by manuring.
Smith et al. (1997) estimated that application of manure at the rate of 10 Mg ha−1 to cropland
in Europe would increase the SOC pool by 5.5% over 100 years. In Norway, Uhlen (1991)
and Uhlen & Tveitnes (1995) reported that manure application would increase SOC
sequestration at the rate of 70–227 Kg ha−1 yr−1 over 37–74-year period.’ (Lal 2007)
Synthetic Nitrogen Fertilizers Degrade Soil Carbon
One of the main reasons for the differences in soil carbon between organic and conventional
systems is that the synthetic nitrogen fertilizers degrade soil carbon. Research shows a
direct link between the application of synthetic nitrogenous fertilizers and the decline in soil
carbon. ‘The application of soluble nitrogen fertilizers…stimulates more rapid and complete
decay of organic matter, sending carbon into the atmosphere instead of retaining it in the soil
as the organic systems do.’ (La Salle and Hepperly 2008)
Scientists from the University of Illinois analyzed the results of a 50-year agricultural trial and
found that synthetic nitrogen fertilizer resulted in all the carbon residues from the crop
disappearing as well as an average loss of around 10,000 kg of carbon (C) per hectare per
year. This is around 36,700 kg of carbon dioxide per hectare on top of the many thousands
of kilograms of crop residue that is converted in to CO2 every year. (Khan et al 2007,
Mulvaney et al 2009)
The researchers found that the higher the application of synthetic nitrogen fertilizer the
greater the amount of soil carbon lost as CO2. This is one of the major reasons why
conventional agricultural systems have a decline in soil carbon while organic systems
increase soil carbon.
Research from North America and Europe shows that organic systems are more efficient in
using nitrogen than conventional farming systems. Significantly, because of this efficiency,
very little nitrogen leaves the farms as greenhouse gases or as nitrate that pollutes aquatic
systems. (Drinkwater et al. 1998; Mader et al. 2002)
Diverse Cropping Systems
Another critical issue is the use of diverse cropping systems. Certified organic production
systems prohibit continuous monocultures in cropping systems. Every certified organic farm
needs to have a management plan that outlines their crop (and stock) rotation systems.
Professor Lal quotes extensively from the scientific literature to verify that this does make a
difference. ‘Soils under diverse cropping systems generally have a higher SOC pool than
those under monoculture (Dick et al. 1986; Buyanoski et al. 1997; Drinkwater et al. 1998;
Buyanoski & Wagner 1998). Elimination of summer fallow is another option for minimizing
losses of the SOC pool (Delgado et al. 1998; Rasmussen et al. 1998). Growing a winter
cover crop enhances soil quality through SOC sequestration. In the UK, Fullen & Auerswald
(1998) reported that grass leys set aside increased SOC concentration by 0.02% yr−1 for 12
years. In Australia, Grace & Oades (1994) observed that the SOC pool in the 0–10 cm layer
increased linearly with increase in frequency of pasture in the crop rotation cycle. In
comparison with continuous cropping, incorporation of cover crops in the rotation cycle
enhanced SOC concentration in the surface layer by 15% in Sweden (Nilsson 1986), 23% in
The Netherlands (Van Dijk 1982) and 28% in the UK (Johnston 1973) over 12–28-year
periods. Similar results were reported by Lal et al. (1998) for the US cropland.’ (Lal 2007)
Erosion and Soil Loss
The highest percentages of soil carbon are contained in the top 10cm of soil (Handrek 1990,
Handrek and Black 2002, Stevenson 1998). Soil loss and erosion from farming systems is a
major concern around the world and given that most of the carbon is in the top soil, the loss
of top soil is a major reason for losses of soil carbon. Comparison studies have shown that
organic systems have less soil loss due to the better soil structure and higher levels of
humus. Reganold et al. 1987, Reganold et al. 2001, Mader et al. 2002, Pimentel 2005) ‘We
compare the long-term effects (since 1948) of organic and conventional farming on selected
properties of the same soil. The organically-farmed soil had significantly higher organic
matter content, thicker topsoil depth, higher polysaccharide content, lower modulus of
rupture and less soil erosion than the conventionally-farmed soil. This study indicates that, in
the long term, the organic farming system was more effective than the conventional farming
system in reducing soil erosion and, therefore, in maintaining soil productivity’ (Reganold et
al. 1987).
Critics of organic systems point to conventional no till production systems as superior to
organic systems because the organic systems use tillage. To my knowledge, there is only
one published study comparing conventional no till with organic tillage systems. The
researchers found that the organic system had the better soil quality. ‘... the OR [organic]
system improved soil productivity significantly as measured by corn yields in the uniformity
trial ... These higher levels of soil C and N were achieved despite the use of tillage (chisel
plow and disk) for incorporating manure and of cultivation (low-residue sweep cultivator) for
weed control.’
‘Our results suggest that systems that incorporate high amounts of organic inputs from
manure and cover crops can improve soils more than conventional no-tillage systems
despite reliance on a minimum level of tillage.’ (Teasdale et al 2007)
The latest improvement in organic low/no till systems developed by the Rodale Institute
show that these systems can deliver high yields as well as excellent environmental
outcomes (Rodale 2006).
Integrating Animal Husbandry into Farming Systems
Incorporating animal husbandry into farming systems is very important. The majority of
traditional farming systems have done this with examples such as wheat and sheep, rice and
ducks as well as chickens and horticulture. In organic systems it is important to integrate
animals into the cropping cycles, especially in broadacre systems where it is desirable to
have a pasture phase in crop rotation cycles.
This is starting to lead to innovative methods to integrate the pasture and cropping phases to
ensure minimal soil disturbance and the maximum area of permanent ground covers. This is
especially applicable to organic systems as the majority of certified organic agricultural land
is either for pasture based systems or rotations of cropping and pasture.
Grazing Systems
The majority (68.7%) of the world’s 4,883,697,000 hectares of agricultural lands are used for
grazing (FAO, 2010). There is an emerging body of published evidence showing that
pastures and permanent ground cover swards in perennial horticulture build up soil organic
carbon faster than any other farming system and with correct management this is stored
deeper in the soil. (Fliessbach et al, 1999, Sanderman et al, 2010)
According to Gattinger and colleagues (2011:16): ‘Researchers working of the long term
comparison trials between organic and convention farming systems in Switzerland (the DOK
trials), found that when rotation phases that contained two years of deep-rooting grassclover leys, that 64 percent of the total SOC [Soil Organic Carbon] stocks are deposited
between 20–80 cm soil depths. (Fliessbach et al, 1999)’
‘In many parts of the world, organic farming systems are relying on the soil fertility build-up of
deep-rooting grass-legume mixtures and on the incorporation of plant residues by deepdigging earthworms, making it quite likely that the currently available data sets
underestimate the SOC stocks in organically managed soils. This is particularly significant
considering that in deeper soil horizons, SOC seems to be more stabilized.’
One of the significant reasons for pasture based systems being more effective in
sequestering CO2 is the higher proportion of plants that use the C4 pathway of photo
synthesis. This makes them more efficient at collecting CO2 from the atmosphere, especially
in warmer and drier climates.
According to Osborne and Beerling (2006:173): ‘Plants with the C4 photosynthetic pathway
dominate today's tropical savannahs and grasslands, and account for some 30% of global
terrestrial carbon fixation. Their success stems from a physiological CO2-concentrating
pump, which leads to high photosynthetic efficiency in warm climates and low atmospheric
CO2 concentrations.’
This knowledge is now being applied in innovative ways such as holistic stock management,
evergreen farming, agro forestry in pastures and pasture cropping.
Higher Crop Yields especially for Traditional Small Holders
A critical area where research is showing higher yields for good practice in organic
management is in traditional farming systems. This is very important information as the
overwhelming majority of the world’s farmers fall into this category. A report by the United
National Conference on Trade and Development (UNCTAD) and the United Nations
Environment Programme (UNEP) found that organic agriculture increases yields in Africa.
‘…the average crop yield was … 116 per cent increase for all African projects and 128 per
cent increase for the projects in East Africa.’ (UNEP-UNCTAD, 2008).
The report notes that despite the introduction of conventional agriculture in Africa food
production per person is 10% lower now, than in the 1960s. ‘The evidence presented in this
study supports the argument that organic agriculture can be more conducive to food security
in Africa than most conventional production systems, and that it is more likely to be
sustainable in the long term.’ Supachai Panitchpakdi, Secretary General of UNCTAD and
Achim Steiner, Executive Director of UNEP stated. (UNEP-UNCTAD, 2008).
Case Study: Tigray, Ethiopia – Biogas and Higher Crop Yields
A good example is a project managed by the Institute of Sustainable Development in Tigray,
Ethiopia. They worked in cooperation with the farmers to revegetate their landscape to
restore the local ecology and hydrology. The biomass from this revegetation was then
sustainably harvested to make compost and to feed biogas digesters. The use of biogas
enabled energy independence in the villages by supplying all the gas needed for cooking
and for lights. Biogas can also be used to power electricity generators and vehicles. The
residues from the biogas digesters were applied to the crop fields as compost. The result
after a few years was more than 100% increases in yields, better water use efficiency and
greater pest and disease resistance in the crops.
The farmers used the seeds of their own landraces which had been developed over
millennia to be locally adapted to the climate, soils and the major pests and diseases. The
best of these farmer bred varieties proved to be very responsive to producing high yields
under organic conditions. The major advantage of this system was that the seeds and the
compost were sourced locally at no or little cost to the farmers whereas the seeds and
synthetic chemical inputs in the conventional systems had to be purchased. Not only did the
organic system have higher yields it produced a much better net return to the farmers.
(Edwards et al. 2011)
Addressing Concerns about Soil Carbon Systems
Schemes that pay farmers for sequestering carbon into the soil, could help alleviate rural
poverty and provide a strong financial incentive to adopt good farming practices; if they are
done fairly and properly.
There are concerns being expressed by many NGOs, as they do not understand the
multifunctional benefits of increasing soil carbon. It is for this reason that these benefits have
been clearly articulated and elaborated in this document. These NGOs are concerned about
corporate land-grabs and the increase of no till GMO systems if money was paid for the soil
carbon sequestration. The data shows that on average conventional farming systems can
only reduce the rate of soil carbon loss, not increase soil carbon levels. (Gattinger 2012,
Sanderman 2010, La Salle and Hepperly 2008)
Preliminary research into no till herbicide systems shows that they only increase soil carbon
in some circumstances and this seems to level off after a period of years. Research by
Professor Rattan Lal and colleagues from Ohio State University compared carbon levels
between no-till and conventional tillage fields and found that, in some cases, carbon storage
was greater in conventional tillage fields. (Christopher, Lal and Mishra, 2009)
Given that there is very little evidence for economic levels of soil carbon sequestration in
conventional farming systems, including no till GMO systems, it is highly unlikely that there
will be any economic rationale for large scale land-grabs to generate soil carbon credits.
The majority of the current land-grabbing activities and forest clearing are for conventional
farming commodity production for the international commodity markets especially for GMO
maize, soy and cotton and for oil palms, rubber and sugar production. This is where the
concern needs to be focused, rather than on possible land grabbing for soil carbon trading
as this is something that does not exist and is unlikely to occur.
Incentives for Farmers to Develop Best Practice in Increasing Soil Carbon
The substantial co-benefits of both mitigation and adaptation of increasing soil carbon
means that it is worthwhile to develop payment systems as incentives for farmers to develop
best practices. Given that current studies show that organic systems are superior in this area
it will also provide incentives for farmers to adopt more good organic practices.
Soil Carbon Mitigation buys the time needed to get the world to adopt renewal energy
sources. Given that urgent action is needed now, we need to actively support methodologies
that strip the CO2 out of the atmosphere and store it into the soil.
Developing the Soil Carbon Offset Methodologies
At this stage there are soil carbon offset methodologies for the voluntary market, however
there are none that are recognized by the UNFCCC or by government schemes such as the
EU trading scheme.
Soil carbon and agriculture are not part of any UNFCCC agreement and it could be 2020 at
the earliest before there are accepted methodologies. Part of the problem is involved in
establishing the best methods for measuring soil carbon. There are many that are available,
however some of the proposals by scientists are not economically feasible due to the
enormous amount of time and labor needed to take the soil samples. There is a major
disagreement amongst scientists and other stakeholders on one agreed method that would
be economically viable for a payment scheme.
Australia is currently developing and approving methodologies under its Carbon Farming
Initiative and these will be at the forefront of methodologies that will be approved under
future UNFCCC agreements.
This vacuum in accepted methodologies and the long time frame to get them accepted by
the UNFCCC and governments should been seen as a positive opportunity as it allows the
organic sector time to develop credible methodologies that can be accepted internationally.
IFOAM needs to work with the Technical Innovation Platform of IFOAM (TIPI) and RTOACC
to ensure that a soil carbon offset methodology for organic farmers is science and evidence
based and most importantly can be easily adopted by small holder farmers in developing
countries without major compliance costs in time and money. It is essential that there is a
methodology that is appropriate for small holders. One of the proposals discussed at the
RTOACC meeting held in July 2013 at IFOAM HO in Bonn was to develop a methodology
based in the peer reviewed science published by Gatttinger et al. in 2012.
One critical issue concerns ownership of the carbon. The carbon should belong to the
farmer/landholder, and the payment should be for the service of sequestering it out of the
atmosphere and for storing it in the soil. The payment is not for the carbon as this cannot
and should not be separated from the soil.
Section 4- Priority Recommendations for IFOAM
IFOAMs first priority should be towards developing insetting schemes in organic supply
chains with recognized guarantee systems such as 3rd party certification and PGS. These
have several advantages over offsetting schemes.
1. Insetting Markets
Insetting has the advantage of building a dedicated price to be returned to farmers within the
cost of products. Very significantly as the organic sector has dedicated market based supply
chains, it allows the sector to control the level of the price returned to farmers for their eco
system and social justice services so that it is not subject to the vagaries of price fluctuations
that are experienced in open market systems.
It has the great advantage that the organic sector can build their own schemes without
having to comply with the difficult and in many cases impractical and unfair rules set by the
CDM. It can mean rewarding farmers for ecosystem services, such as sequestering soil
carbon that are not covered by the CDM.
The CDM only covers new activities for landholders, so existing landholders that have been
engaging in good practices cannot be covered under proposed and existing CDM schemes.
An example would be the many thousands small holder farmers in Tigray, Ethiopia, who
have developed biogas systems. They cannot be compensated by the CDM however
farmers who do not have biogas can be compensated if they develop systems. Similarly the
Tigray farmers cannot be compensated for revegetating their landscape, whereas farmers
who have never done revegetation can receive CDM payments if they start to revegetate.
This is manifestly unfair to farmers who have already done the right thing by the environment
in avoiding and mitigating emissions. These farmers could receive payments under an
insetting system.
Insetting can ensure a number of important benefits:
There has been repeated concerns raised in the organic sector that very little of the premium
for organic products reaches the farmers. Insetting will ensure that an agreed amount will be
returned to the farmer on top of the price received. This fits firmly with the IFOAM principle of
Fairness.
Insetting can be used to pay farmers for all the multifunctional eco system and social justices
services that they deliver and not just be restricted to their beneficial climate change
activities. It is the ideal way, as stated in Motion 62, of providing ‘alternative financing
systems to support organic farming projects and agro-ecological approaches to agriculture
that provide a real solution of climate change for vulnerable populations and a fair
compensation to organic farmers for their contribution to mitigation and adaptation
strategies.’
Insetting can also be used as an effective promotional tool for organic products. The correct
promotion on the packaging combined with other advocacy activities can let consumers
know that a dedicated amount of the price is compensating farmers for their ecosystem
services in mitigating climate change, increasing biodiversity, improving the environment, the
humane treatment of animals and for social justice for all the actors along the supply chain.
IFOAM should make it a priority to design and trial insetting within the IFOAM OGS, working
with partners along the whole supply chain. This should include 3rd party certification
systems and particularly with PGS systems.
Very significantly the the Best Practice Guidelines could be used to quantify the multiple
sustainable benefits to develop a scheme that is based on the principle of continuous
improvement for growers to achieve best practices in sustainability.
2. Offset Markets
Biogas Digesters
Biogas digesters can generate higher levels of offset credits under the current CDM based
and voluntary schemes. Biogas digesters will bring multiple co-benefits on top of any
income. These are:
 Reducing the need for burning wood or manure for cooking – saving valuable natural
resources
 They can easily be built by small holders for very little expense
 The slurry can be used for compost to increase crop yields and soil quality
 Help farmers achieve energy independence
3. Ensuring Fairness in Carbon Offset Markets
The second part of Motion 62 states: At the same time, IFOAM should strongly advocate
against including agriculture in any speculative carbon market schemes, especially those
controlled by the international finance system.
Carbon offset markets will be part of the future UNFCCC agreements. These were accepted
under the Cancun agreements in Mexico in 2010 and are part of the more comprehensive
agreement in Durban that the EU negotiated with all the countries in 2011.
Opposing carbon offset markets is a waste of time and resources as the developed countries
who will be supplying all of the funds for both adaption and mitigation have firmly stated that
market based mechanism will be part of the funding mix.
The key issue is to advocate for systems that are fair and ensure that the bulk of these funds
go to the farmers who are providing the eco systems services of mitigating and adapting to
climate change and advocating against unfair systems.
The critical issue that has surfaced since Cancun and Durban is that the loopholes in the
freely traded carbon offset markets have led to a crash in prices to the point where there are
marginal financial benefits for the farmers, especially small holders and their communities for
doing mitigation activities. At the same time the cost to the carbon polluters is so minimal,
that there is no incentive to change their practices. Business as usual is the cheapest option
– the best financial outcome for them.
IFOAM needs to strongly advocate for key reforms to these markets.
There needs to be a set minimum floor price that is increased over time. A minimum price
will ensure that there is a guaranteed return to farmers for their mitigation and adaptation
activities. Several analysts have stated that this needs to be US $40 a tonne of CO2e to
make it viable for both landholders and to provide an economic incentive for polluters to
change their practices.
These schemes should be based on Cap and Trade systems rather than on carbon taxes or
just plain offsets. The capping of emissions is essential to lowering the overall level of
emissions. The progressive lowering of the cap on emissions and increasing the floor price
per tonne of CO2e will provide a strong financial incentive to invest in renewable, efficient
and cleaner energy technologies. Ideally the world needs to significantly reduce emissions
rather than mitigating them, however farm based mitigation can provide a useful contribution
in stabilizing the amount of GHGs in the atmosphere and then very importantly stripping
them out so that we can reduce the current levels back to pre1990 levels. This will take 50 to
100 years once these schemes are in place.
There should no exceptions by granting exemptions for the cap and trade systems. The
primary reason why the carbon price has collapsed in the world’s biggest carbon market, the
EU trading system, is due to the huge number exemptions that the EU has granted to
polluting industries from having to mitigate their carbon emissions. This has resulted in more
emissions mitigation projects than the demand to offset emissions. This has to be reversed.
These offset schemes should be administered by Governments and Not for Profit NGOs who
will only deduct reasonable administration costs for running the scheme and do not make a
profit from them. IFOAM should strongly oppose all schemes that are designed to make a
profit for investors. The primary purpose of these activities is to stop polluting the
atmosphere with GHGs and to fairly compensate farmers and their communities for their eco
system services in cleaning up this pollution and fixing the other problems that are caused
by this pollution through their adaption activities. It firmly goes against the IFOAM principle of
Fairness that the financial markets can exploit these activities just to generate profits from
investing in them.
IFOAM should strongly oppose open market trading systems where the carbon offset
certificates can be freely traded like shares, bonds or other financial instruments. These
activities are called rent seeking by economists. The markets ensure that they get a slice of
the pie without contributing to the activities. Many of these systems return less than 25% of
the value of a tonne of CO2e to landholders. More than 75% can go into administration
costs, commissions and profits to investors. This is manifestly unfair in that the people doing
the mitigation activities receive the least amount of funds while others, who can and should
be easily bypassed by developing fair trading systems, take the lion’s share of the pie.
IFOAM needs to strongly advocate that the payments for carbon offsets by-passes the
financial markets and that agreements are done directly between emitter and the mitigator
through either a government run agency or a not-for-profit NGOs that only charges a very
small cost for their administration services. This will ensure the highest percentage is
returned to the farmers and their communities.
IFOAM should consider starting a project to be a not-for–profit agency for carbon offsets.
The UNFCCC has proposed allocating around US $300 billion to funding mitigation and
adaption activities and a significant proportion of these funds will be used for carbon offset
markets.
We need to ensure that organic farmers can have access to these funds and not miss out. It
would be manifestly unfair if conventional land holders receive payments and organic
farmers do not, especially considering the multiple services that organic farmers can deliver
in these areas.
The other key reason is to set up a service that maximizes the return to farmers and their
communities. While IFOAM must strongly advocate against carbon offsets being freely
traded on the financial markets, the reality is that we and other like-minded NGOs as well as
many developing countries who are opposed to these, will be have a tough time trying to
stop many of the developed countries and their financial markets from going ahead with
these systems. We need to set an example by showing the correct way to manage these
systems.
Section 5 – Conclusion: Build a Strong Alternative System
It is important that IFOAM builds a strong alternative system that returns a significantly
higher proportion of the payments to farmers. This will have the effect of building market
drivers for farmers, landholders and communities to choose these systems, due to receiving
higher returns, over the freely traded financial market systems. It will put pressure on the
financial markets to lift their rates of return to landholders in order to get participants for their
schemes.
Payment Systems – Balancing the Priorities
While insetting and offsetting schemes can have role in alleviating poverty, the amounts that
can be returned to small holder farmers will not be sufficient on their own to achieve this.
These income streams should only be seen as a minor part of a farm income – the primary
part needs to come from farming activities. The payments should be used as incentive
schemes to adopt good practices that will deliver higher yields as well as positive eco
system and social justice outcomes.
For many of the world’s small holder farmers who exist on less than US $400 per annum,
this extra income can bring benefits, however programs to generate this income should not
be at the expense of key programs that will lift yields and the prices that farmers receive
when they sell products. Increasing yields and prices received must be the primary aim in
alleviating hunger and poverty. Insetting and offsetting schemes should just be part of the
mix of the many strategies that are needed improve the quality of life of some of the poorest
and most marginalized people on the planet.
Main Recommendation
It would be worth developing a pilot insetting supply chain project and approach
organizations that are interested in investing in sustainable organic systems as partners for
funding and marketing. This should include 3rd party certification systems and particularly
with PGS systems.
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