Soil Carbon Lands Market Opportunities Through New Offset Methodology

Daphne Yin

The Verified Carbon Standard recently approved The Earth Partners’ soil carbon methodology for use on agricultural offset projects. The methodology, while new to the carbon markets, is grounded on decades’ worth of USDA science – with the capacity to cover most ecosystems and land types. The science is there. The challenge, as always, is scaling up.

12 December 2012 | Vast stretches of fertile loess deposits have helped shape the Palouse and Columbia Plateau region of the United States into one of the world’s most agriculturally productive regions. Loess, which means loose in German,  is also susceptible to erosion. Over the past century,  intensive farming of wheat, barley, peas, lentils and other crops has taken a major toll on the region’s soil and water resources and pushed native grasslands and biodiversity close to extinction.

The Earth Partners (TEP), an alliance of professionals working in finance, project development, ecosystem restoration and land management, developed a soil carbon quantification methodology – recently approved for use under the Verified Carbon Standard (VCS) – to support more sustainable methods of agriculture and other land use. The methodology is the first to cover all eligible carbon offset activities in VCS’s agricultural land management category, providing new market opportunities for emission reductions and removals from projects that improve soils in farmlands, grasslands, and rangelands.

Sowing the method

TEP and Shepherd’s Grain – a leading wheat producer group of family farmers – are piloting the methodology across seven million acres of the Palouse and Columbia Plateau region as one of the world’s largest aggregated land-based carbon offset projects to date.

Individual farmers cover the expenses of any eligible offset activities like no-till, direct seeding, crop rotation, or improved soil management on their own. When it comes to applying the methodology itself, however, farmers enrolled in the project don’t have to pay a cent. The project developer – in this case TEP – quantifies the soil carbon on each participating farm prior to banking carbon credits.

“The methodology provides a standard way to bring to the marketplace what many landowners think they have in the way of carbon assets but haven’t been able to tap into because there was formerly no standard method in place for measurement or monetization of these assets,” says Steven Apfelbaum who heads TEP’s science team and owns Applied Ecological Services, TEP’s operating partner.

As it works to market the project, TEP hopes the Palouse project can serve as a robust, land-based agricultural carbon offset project that is both cost-effective and flexible enough to enroll producers at a large scale – and provide a model for rollout to other regions.

The method behind the method

Apfelbaum first contacted key soil scientists a decade ago about a soil carbon method produced by the United States Department of Agriculture that dates 30 years back. These scientists went on to help TEP conduct demonstration projects for soil carbon measurements throughout the Americas. Beyond agriculture, TEP tested the method on degraded landscapes in mine lands, prairies, grasslands, forest lands, savannah lands, and wetlands.

USDA scientists and other researchers historically quantified soil carbon field by field, measuring the farm field in isolation of the larger landscape. TEP fine-tuned the method by adopting a modified process that afforded them more flexibility to apply the method at different scales.

The process involves pre-sampling various settings on the landscape covering different land uses in order to obtain a measure of the statistical variance on the landscape, followed with a comprehensive GIS-based stratification of the landscape. In turn, TEP is able to statistically sample at a landscape scale, up to millions of acres.

This modified approach not only saves time, but brings the cost of managing soil carbon from tens of dollars per acre down to pennies per acre.

Tapping into the US market

“We can measure and tell the story with clear statistics for the value of what early adopters started doing – years ago in some cases,” notes Apfelbaum. “But if the marketplace penalizes early adopters, then we lose a valuable part of the agricultural community.”

By taking TEP’s soil carbon methodology under its wing, VCS – a standard that has engaged both industry and land users in the voluntary carbon markets – can help reward early adopters by certifying use of the methodology on carbon offset projects.

While VCS enables early adopters, it does not facilitate access to the same level of demand for credits that a compliance market-approved protocol could. To scale up use of the methodology in the US requires early actors to dip their toes in an environment that still has years ahead of it before it can realistically reach a federal cap-and-trade scheme or provide a stable price on carbon.

Soil carbon is not yet on the list of eligible project types being considered for coverage under California’s nascent cap-and-trade scheme  –  or under the Western Climate Initiative more broadly. In past interactions with TEP, California’s Air Resources Board (ARB) reviewed the soil carbon methodology and acknowledged soil carbon as a potential future project type for the scheme. TEP hopes to reengage with the ARB to push for a regional protocol on soil carbon now that the method is VCS-approved and the Palouse project is underway.

The Palouse project currently sits at 100,000 acres under contract. If the ARB were to adopt a regional protocol in support of the methodology, the project could enroll additional producers across the seven million acres on which TEP has already implemented mapping, stratification, and sampling. At full scale, the project could produce over 15 million offset credits per year.

TEP hopes to locate similar eco-agricultural regions to develop protocols or projects based on its new methodology. The possibilities are vast in the US alone, whether involving wheat in Montana, corn and soybeans in the Midwest, cotton in the South, or fruit and horticulture back in California.

“The value proposition of soil carbon can appeal to anyone in the agricultural supply chain – from vehicle manufacturers to farm equipment producers to food producers,” says Chas Taylor, TEP’s Director of Business Development, regarding potential buyers.

“State entities and others with environmental concerns beyond carbon would also be stakeholders – for instance, on improved watershed health from reduced erosion.”

Soil carbon in context

While the newly VCS-approved soil carbon methodology applies primarily to agricultural projects under VCS’s agricultural land management program, the method can accommodate much broader application.

“We’ve used the exact same method with simply a different soil sampling instrument to work in other project types including wetlands and peatlands,” says Apfelbaum. “We’re looking at adding additional modules including those for peat and biochar, and see great versatility in this method going forward.”

When it comes to how soil carbon stands up against other land-based project types on non-permanence risk, Apfelbaum says the soil carbon methodology doesn’t burden project developers with many of the risks inherent to forest methods. Most soil carbon fractions that TEP works with are relatively stable compared to forest carbon levels. Changes in land use – for example, the introduction of cut-and-burn practice – don’t upset soil carbon levels to the same degree that forest fires, insects or diseases upset forest carbon.

Conservative measures like setting aside a buffer pool for carbon credits, used on forestry projects to insure against non-permanence risk, can still come in handy on soil carbon projects.

“We’ve proposed buffer pools,“ says Apfelbaum, “but primarily to align with the investment that might be made on a particular project and the physical reliability of the data.”

Prior to the sale of carbon credits, a project developer might choose to perform soil carbon sampling at a lower level of certainty in order to save on laboratory testing costs – and put up a buffer pool to offset the uncertainty. As revenues from carbon credit sales start to flow, the project developer could afford to refine the statistics and reduce the size of the buffer pool accordingly.

“If we can aggregate larger landscapes using the soil carbon method, we can come in equal or far less expensive than the forestry methods that we’ve seen,” says Apfelbaum.

Scaling beyond

The global stakes are high, with soil carbon levels in most agricultural fields and many other landscape types currently reduced by 60 to 90 percent compared to historic levels. An article in Science states that up to 50 percent or more of global greenhouse gas emissions can be offset annually over the next 30+ years by regrowing soil carbon.

Outside the US, the approach is being demonstrated in Australia and New Zealand, while also cropping up in conversations in Africa, Asia, Europe, and South America – with those interested traveling to the US for hands-on training.

To date, verifier organizations largely lack the in-house soil expertise to evaluate projects. For those looking to employ outside help, there is no shortage of technically trained soil scientists capable of using the method, given that most of the methods used for soil sampling around the world fall back on the USDA’s standard manuals – on which TEP’s methodology is based.

Apfelbaum stresses the need for verifiers to think at the landscape level, and to understand that there are ways to work with variability over time and space at scale. “Verifier checklists are currently largely developed around parcel-scale or small-scale rather than ecosystem-scale thinking,” he notes.

Movers and shakers like the World Bank – which saw approval of a soil carbon methodology it supported earlier this year – and the UN Food and Agriculture Organization have advocated for soil carbon offsets to be a vehicle for driving climate-smart agriculture in developing countries.

Negotiations on climate-smart agriculture and the potential uptake of soil carbon under the Clean Development Mechanism (CDM) ended inconclusively last Friday in Doha, as African countries argued with developed countries  over whether to focus funding on adaptation or mitigation activities.

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