Money for grass
Last week, the FAO announced it had come up with a new methodology to reliably and cost-effectively estimate the amount of greenhouse gas emissions which could be removed from the atmosphere by the improved management of grasslands. See FAO’s media release.
The rehabilitation of vast swathes of the worlds degraded grasslands, the FAO claims, would remove gigatonnes of carbon from the atmosphere and improve resilience to climate change.
This Methodology for Sustainable Grassland Management has been developed by FAO in collaboration with the Chinese Academy of Agricultural Science, the Chinese Academy of Sciences and the World Agroforestry Centre.
While it’s pretty clear that improving grassland management can sequester large amounts of carbon if implemented on a large area, the question is whether carbon finance could actually pay for this.
If there was a Reducing Emissions from Deforestation and forest Degradation (REDD)-style option for grasslands, where farmers/herders were paid for not converting grassland or for not overgrazing, then maybe there’d be potential. But if you’re following the Clean Development Mechanism (CDM) principles where payments are only made for additional carbon sequestered, it’s not quite so promising.
While sequestration rates are likely to be quite low on a per hectare basis for any sort of improved grassland management, when they are multiplied by a large area and over many years, this could equate to significant carbon and a reasonable sum of money. This relies on a large number of farmers/herders to be simultaneously practicing better management over a large area. And they would need to have secure tenure and usage rights in order to be sure to benefit. So, would the amount paid for carbon stored per farmer be worth it? Would these farmers/herders be able to pay for the costs incurred in implementing improved management?
As a very rough estimate – which I even think is on the high side – if you assume a sequestration rate of 100kg per hectare per year and a carbon price of 10USD/Mg C, you get 1USD per hectare per year. Is it possible to implement any meaningful management changes for 1 dollar? (We’re talking here about changing the behavior of thousands of dispersed land managers). How does this compare to the economic incentives that have led to less than ideal current or past management of grasslands?
A colleague, Rolf Sommer, has done some calculations for the potential annual carbon sequestration of China’s rangelands. He concludes their ability to offset anthropogenic CO2 emission is comparably smalland will be eaten up by Chinas increasing annual rate of CO2 emissions.
So, while investing in improved grassland management would be highly beneficial, carbon payments are unlikely to be sufficient to make better management the preferred option for most farmers/herders. Carbon payments are more likely to be a small additional incentive for improving management.
Many believe that carbon finance alone will induce meaningful behavior changes, but in my opinion the situations where this is likely to happen are probably very exceptional.