Selling Carbon Credits

For those interested in how to make money from carbon credits, here is an interesting example of a successful scheme from the Northern Territory of Australia. The WALFA project (West Arhnem Land Fire Abatement) certifies it will create a minimum annual carbon offsetting of 100,000 tonnes of cabon dioxide equivalent by controlling late-season wildfires. In return, Darwin LNG (Liquid Natural Gas) pays approximately $1 million per year to create a carbon abatement of 100,000 tonnes. Cheap at $10 per tonne. In 2007 the Northern Territory Government paid $130,000 to the Tropical Savannas Cooperative Research Center, $380,000 for indigenous employment, and $500,000 on vehicles and operations. The project is proudly proclaimed as producing ‘quadruple bottom line outcomes’: economic, environmental, social and cultural.


Original Caption: Plate 1: Long grass in West Arnhem Land.
Source: Lendrum (2007).

However, the project does not reduce emissions of CO2, but methane and nitrous oxide. As it states:

The WALFA project abates carbon dioxide equivalent in the form of methane and nitrous oxide only; the carbon dioxide released by fire is assumed to be reabsorbed by the landscape in the next growing season.

The technique is to apply cooler early dry-season prescriptive burns, so there are fewer hotter late-dry season burns. One would assume there is good scientific evidence to back up the claims that cool burns produce less methane and nitrous oxide than hot burns. I have sent off a few requests for data to support this, and will update the post when I hear from them.

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0 thoughts on “Selling Carbon Credits

  1. I wrote to the previous Chief Minister of the Northern Territory (whom I had known for years) saying that this scheme was dubious. But the Chief Minister resigned a few months after and I did not hear any more.

    The objection is that there is insignificant net gain in sequestration if vegetation is simply recycled. For carbon to be locked up, the weight of carbonaceous material after the experiment must be more than before. In all realistic cases, this will mean replacing sparse vegetation with dense vegetation.

    What is more, the dense vegetation – say a tree plantation – has to be maintained in that state in perpetuity. If it is left unmanaged and if it reverts to the pre-experiment state, with a loss of sequestered carbon weight, then we just have a small blip on the carbon history, but one from which people made money – perhaps under false pretenses.

  2. I wrote to the previous Chief Minister of the Northern Territory (whom I had known for years) saying that this scheme was dubious. But the Chief Minister resigned a few months after and I did not hear any more.

    The objection is that there is insignificant net gain in sequestration if vegetation is simply recycled. For carbon to be locked up, the weight of carbonaceous material after the experiment must be more than before. In all realistic cases, this will mean replacing sparse vegetation with dense vegetation.

    What is more, the dense vegetation – say a tree plantation – has to be maintained in that state in perpetuity. If it is left unmanaged and if it reverts to the pre-experiment state, with a loss of sequestered carbon weight, then we just have a small blip on the carbon history, but one from which people made money – perhaps under false pretenses.

  3. Geoff, You really are on top of things. I have a feeling when I read about this project that we are looking at the future of carbon trading, and of science in this country. This project won the Australian Museum Eureka Prize for excellence in research & innovation.

  4. Geoff, You really are on top of things. I have a feeling when I read about this project that we are looking at the future of carbon trading, and of science in this country. This project won the Australian Museum Eureka Prize for excellence in research & innovation.

  5. How would I work out the CO2 pros and cons of the following:
    I have 100 Ha of savannah/open forest which I cool-burn at the end of winter to get green regrowth for fodder. This regrowth occurs vigorously and gets consumed by animals.
    Or I dont burn and the dry fodder gets mainly trampled but some spring regrowth occurs but which is reduced and quickly consumed.
    It’s hard to quantify precisely but generally is it better to burn or not CO2 wise?

  6. How would I work out the CO2 pros and cons of the following:
    I have 100 Ha of savannah/open forest which I cool-burn at the end of winter to get green regrowth for fodder. This regrowth occurs vigorously and gets consumed by animals.
    Or I dont burn and the dry fodder gets mainly trampled but some spring regrowth occurs but which is reduced and quickly consumed.
    It’s hard to quantify precisely but generally is it better to burn or not CO2 wise?

  7. Re # 3

    In the long term, it does not matter much how you manage. Grasses will decay to produce GHG whether left to fallow or burned. If they grow again, they take some GHG back from the air, so the nett effect over decades is practically balanced.

    Legumes are a little more complicated because rhizomes can convert nitrogen gas from the air to nitrogenous fertilizer that is taken up by the plant. On burning or decay, this can produce other componds like nitrous oxide and ammonia, some of which have a minor GHG effect in their short lives.

    The main way to remove CO2 from the air is to replace sparse vegetation with thick/tall vegetation. But, as I noted above, this has to be maintained this way or you have made only a temporary change.

  8. Re # 3

    In the long term, it does not matter much how you manage. Grasses will decay to produce GHG whether left to fallow or burned. If they grow again, they take some GHG back from the air, so the nett effect over decades is practically balanced.

    Legumes are a little more complicated because rhizomes can convert nitrogen gas from the air to nitrogenous fertilizer that is taken up by the plant. On burning or decay, this can produce other componds like nitrous oxide and ammonia, some of which have a minor GHG effect in their short lives.

    The main way to remove CO2 from the air is to replace sparse vegetation with thick/tall vegetation. But, as I noted above, this has to be maintained this way or you have made only a temporary change.

  9. I heard from Dr Carol Grossman at the Department of Climate Change who clarified for me that that for GHG accounting purposes it is the annual reduction in burnt area of savanna that counts towards the CO2 offset. This areal reduction is brought about by smaller burns early in the season. No reports were forthcoming from the office however.

  10. I heard from Dr Carol Grossman at the Department of Climate Change who clarified for me that that for GHG accounting purposes it is the annual reduction in burnt area of savanna that counts towards the CO2 offset. This areal reduction is brought about by smaller burns early in the season. No reports were forthcoming from the office however.

  11. Re #5 Admin

    I fail to grasp any significant difference between burning grass (in small or large fires) or letting decay produce its GHGs.

    Did Dr Grossman offer to elaborate?

    I hate to think that this will be the first scheme to test the principles of emission trading schemes in Australia. Does anyone know of any previous legal challenges to a proposed or actual scheme?

  12. Re #5 Admin

    I fail to grasp any significant difference between burning grass (in small or large fires) or letting decay produce its GHGs.

    Did Dr Grossman offer to elaborate?

    I hate to think that this will be the first scheme to test the principles of emission trading schemes in Australia. Does anyone know of any previous legal challenges to a proposed or actual scheme?

  13. No. I just wanted to get a clear understanding of the accounting as practised, so I didn’t get into the science. I have a few emails in to Jeremy Russell-Smith for more recent work but he is probably in the field (doing early burns?).

    Any challenge would have to come from Darwin LNG as the injured party wouldn’t it, though you would have to look at the terms of the contract with the NT Government? It would be interesting to see what the NT Government committed to and the provability of goods (abatement) delivered as promised. There seems to be a lot of flexibility in year-to-year targets.

  14. No. I just wanted to get a clear understanding of the accounting as practised, so I didn’t get into the science. I have a few emails in to Jeremy Russell-Smith for more recent work but he is probably in the field (doing early burns?).

    Any challenge would have to come from Darwin LNG as the injured party wouldn’t it, though you would have to look at the terms of the contract with the NT Government? It would be interesting to see what the NT Government committed to and the provability of goods (abatement) delivered as promised. There seems to be a lot of flexibility in year-to-year targets.

  15. The WALFA project is further described at –

    http://www.nt.gov.au/dcm/legislation/climatechange/docs/paper/p4_savanna_burning.pdf

    This report concedes that carbon dioxide put into the air by burning is taken up again by new growth, presenting an equilibrium. The two gases on which the commercial agreement are based are methane and nitrous oxide.

    It is not clear why the report singles out the carbon in methane and the nitrogen in nitrous oxide, because these are also taken up again by new growth.

    If the yield of grass in a given area does not change significantly, nor does the content of C or N, all other things like rainfall and fertilisation being equal. Which they mostly are. Equilibrium again.

    I fail to see the point of the exercise, unless it is PR.

  16. The WALFA project is further described at –

    http://www.nt.gov.au/dcm/legislation/climatechange/docs/paper/p4_savanna_burning.pdf

    This report concedes that carbon dioxide put into the air by burning is taken up again by new growth, presenting an equilibrium. The two gases on which the commercial agreement are based are methane and nitrous oxide.

    It is not clear why the report singles out the carbon in methane and the nitrogen in nitrous oxide, because these are also taken up again by new growth.

    If the yield of grass in a given area does not change significantly, nor does the content of C or N, all other things like rainfall and fertilisation being equal. Which they mostly are. Equilibrium again.

    I fail to see the point of the exercise, unless it is PR.

  17. Geoff: I would have thought the dynamics of CHx and NOx where that they are broken down on an annual timeframe.

    “unless it is PR.” Ya do what ya gotta do.

  18. Geoff: I would have thought the dynamics of CHx and NOx where that they are broken down on an annual timeframe.

    “unless it is PR.” Ya do what ya gotta do.

  19. 9 Admin …. perhaps

    Some people object to NOx emissions because they end up helping plant growth and have been blamed for eutrification of streams and other woes.

    But those poor plants that have no mechanisms like legumes, to convert nitrogen gas to food, have to rely upon NOx and its related products in rain and so on, in order to grow. They need about the same amount to grow as is released by decay. Or by fire. Either way, it’s a rough equilibrium.

    If people want to make a case that NOx and CH4 perform mischief in their brief stay in the air, with about 100 years and 10 years half lives (though it’s more complicated than that) then these are processes that have been going on for geological time spans.

    Nitrous oxide is estimated to be changing its atmospheric concentration by about 800 parts per trillion per year. That makes it a rather expensive commodity for mitigation schemes costing billions of dollars. Much more than its weight in gold.

    I’d invest in the gold.

  20. 9 Admin …. perhaps

    Some people object to NOx emissions because they end up helping plant growth and have been blamed for eutrification of streams and other woes.

    But those poor plants that have no mechanisms like legumes, to convert nitrogen gas to food, have to rely upon NOx and its related products in rain and so on, in order to grow. They need about the same amount to grow as is released by decay. Or by fire. Either way, it’s a rough equilibrium.

    If people want to make a case that NOx and CH4 perform mischief in their brief stay in the air, with about 100 years and 10 years half lives (though it’s more complicated than that) then these are processes that have been going on for geological time spans.

    Nitrous oxide is estimated to be changing its atmospheric concentration by about 800 parts per trillion per year. That makes it a rather expensive commodity for mitigation schemes costing billions of dollars. Much more than its weight in gold.

    I’d invest in the gold.

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