Agriculture Reference
In-Depth Information
that target emission reduction from all land
uses have found increasing support - even
though the international negotiations have
not taken this route as yet. The slow emer-
gence of an 'agricultural mitigation' inter-
est, however, is to be mentioned. Currently,
it appears that approaches that explicitly
reduce human vulnerability through a com-
bination of mitigation and adaptation at the
landscape scale ('climate smart agricul-
ture') are in the focus of attention. Avoided
loss of soil C (associated with land degrad-
ation) and support for increased soil C stor-
age is a key component. As to the finance of
'climate smart agriculture', however, the op-
tions for offset finance (tradeable carbon
credits) and/or new investment are barely
discussed.
regularize and gain recognition for what
started as voluntary actions, additional to
government commitments.
Price volatility as a primary challenge
to market-based mechanisms
By the end of 2012, both the EU trading
scheme and CER prices crashed, in the ab-
sence of a clear sequel to the Kyoto proto-
col. The CER prices came down to US$0.5 t
-
1
of CO
2
(Ecosystem Market Place, 2013).
Fluctuations on the demand side for carbon
credits has a major effect on the volatility of
prices under a market mechanism, as exist-
ing allowances of carbon rights are inde-
pendent of ups and downs in the global
economy, and the interest in buying credits
relates to the margin between actual emis-
sions and allowances. Carbon market prices
are far more dependent on global economic
moods than commodity prices that deter-
mine the opportunity costs of emission-
reduction actions.
Voluntary markets
Jindal and Namirembe (2012) discuss the
Verified Carbon Standard (VCS, formerly
Voluntary Carbon Standard), the Gold
Standard, the Plan Vivo Standard and
others that have emerged to help the volun-
tary C market obtain the level of trust
needed to function. As voluntary C credits
are not fungible under formal C emission
commitments, they do pass the demand-
side additionality test, and can focus on
supply-side additionality and the possibil-
ity of leakage (negative effects outside the
project area that are attributable to project
interventions). Planting trees remains an
emotionally satisfying activity that is popu-
lar for voluntary compensation of fossil
energy-based emissions - even though the
temporary crediting rules of A/R-CDM
have made this a rather unattractive op-
tion in the compliance market.
Compliance markets may operate under
'offset' rules, which imply that emission re-
duction in a certified project can be used to
meet formal obligations to reduce emissions
elsewhere. The credited emission reduction
can be sold as a right to emit - which means
it may have zero effect on global emissions.
The separation in voluntary and compli-
ance markets is fluid in time, with efforts to
Product-based emission accounting
in international markets
The enthusiasm for biofuels that emerged a
decade ago could probably be understood
from the attractiveness of an option that re-
quired minimum adjustments in the means
of transport and associated lifestyles, while
agriculture was challenged by surpluses in
grain and other commodities that exceeded
financially viable demand (even though
hunger persisted for those without suffi-
cient income). Importing feedstocks of bio-
fuel, with sugarcane and palm oil the leaders
for bioethanol and biodiesel, respectively,
appeared to be attractive - until public
opinion was made aware of the question of
the emissions and loss of biodiversity asso-
ciated with the rapid expansion of export-
oriented crops in tropical rainforests.
Subsequent regulations of biofuels in the
EU and USA have tried to guarantee that at
least some (
20-
40%) net global emission
reduction is achieved - even though the
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