Economic constraints to the adoption of carbon farming

Abstract

The potential for sustainable agricultural practices to sequester C is substantial. The economic feasibility and competitiveness of soil C sequestration depends on the opportunity cost per tonne of C stored. The key issue is whether the cost is competitive with alternative methods of reducing greenhouse gas emissions. The high spatial variability in land productivity means that the soil characteristics are important when designing public policies to address this issue. Empirical evidence suggests that the opportunity cost per tonne of C stored can be as low as US$10 to US$25 t -1 (Can$12-30), but that for the majority of temperate agriculture it exceeds US$50 t-1 (Can$60). The final monetary value placed on a tonne reduction of C will emerge either from the establishment of a fully functioning market or from government payment schemes. Estimates of the value of stored C have ranged from US$100 t-1 (Can$120) to a low of less than US$5 t-1 (Can$6). Current evidence suggests a likely price in the lower region of this range.