The Economic Value of Soil Carbon - Soil Carbon: Science, Management and Policy for Multiple Benefits - page 185

Based on three case studies, they fo-
cused on regions with extensive soil deg-
radation. In Machakos (Kenya), the carbon
contracts required farmers to utilize minimum
amounts of organic fertilizer (600 kg ha - 1 per sea-
son) and mineral fertilizer (60 kg ha - 1 year -1 ).
In Cajamarca (Peru), carbon sequestration
was based on the adoption of terraces and
agroforestry; in the Southern Groundnut
Basin (Senegal), carbon contracts were based
on the incorporation of crop residues and
the application of mineral fertilizer.
A carbon payment scheme requires
ways of measuring how a change in land
management practices will change the pool
of soil carbon, and how this would affect
the various services associated with it, such
as climate regulation. The carbon payments
each season could be based either on the
number of hectares on which these prac-
tices were adopted (a per hectare payment)
or on the expected amount of carbon se-
questered (a per tonne payment mechan-
ism), the latter being economically more
efficient because it better guarantees condi-
tionality in areas of a high degree of spatial
heterogeneity (Antle et al ., 2003). That is,
the contract pays farmers per unit of envir-
onmental service provided. Assuming that
after the incentive scheme is in place farm-
ers adopt those land-use and management
practices that maximize economic returns
(adjusted for risk if farmers are risk averse),
Antle and Stoorvogel (2008) simulated the
effects of such contracts on soil carbon
stocks. The results showed that carbon
contracts would increase the adoption of
carbon sequestering practices significantly,
with the adoption of soil carbon-enhancing
agricultural practices being rather sensitive
to the payment per expected soil carbon
enhancement, or price of carbon, and other
factors such as transaction costs. The simu-
lation output also suggested that sufficiently
high carbon payments could enhance the
sustainability of small farmers' production
systems, since increased use of organic fer-
tilizers and the incorporation of crop res-
idues and other organic matter was assumed
to stabilize production by, for example, im-
proving the soil's water-holding capacity.
However, such enhanced sustainability would

not occur in contexts associated with ini-
tially high rates of land degradation unless
the payments were exceedingly high.
Similarly, The Australian Soil Carbon
Accreditation Scheme (ASCAS) pays farm-
ers for agricultural practices such as no-till
farming in order to enhance soil carbon
(Jones, 2007). The payments are determined
by validated soil carbon increases above
initial baseline levels determined for each
so-called 'defined sequestration area' in crop-
ping and grazing land, so vary according to
rates of carbon capture. SCIPs are calculated
at one-hundredth of the 100- year rate, which
is usually the time frame for timber carbon
contracts in Australia, at AUS$25 t - 1 CO 2
equivalent. For example, for a 0.15% increase
in soil carbon, approximately 23.1 t C ha - 1
(84.78 t CO 2 equivalent ha -1 ), the price per
hectare is AUS$21.19 ha - 1 . For an increase of
0.30% in a second year, the price paid in
year 2 is AUS$42.39 ha - 1 , and for an increase
of 0.45% in year 3, the price paid at that
point would be AUS$63.58 ha - 1 , summing
127.16 ha - 1 over 3 years (Jones, 2007).
Other examples around the world in-
clude the World Bank's BioCarbon Fund
that provides payments to Kenyan small-
holder farmers to improve their agricultural
practices through the Kenya Agricultural
Carbon Project, in order to increase both
food security and soil carbon sequestration
(World Bank, 2010). Similarly, in 2009, the
Portuguese government introduced a soil
carbon offset scheme based on dryland pas-
ture improvement, involving around 400
farmers in about 42,000 ha by establishing
perennial pasture (Watson, 2010).

Conclusion

First, this chapter outlines the main rationale
for identifying the economic value of soil
carbon. Second, the different components of
values are described and their relationship to
human well-being is classified. Finally, sug-
gestions are made as to how potential soil
carbon values can be realized.
Soil carbon relates in different ways to
human well-being. Most notably, first, soil car-
bon has a significant role in the maintenance