David Miller of the Iowa Farm Bureau Federation, who will be a guest at the Australian Grains Industry Conference (AGIC) in Melbourne in late July, believes that Australian agriculture could make a start on soil carbon using the loose averaging model developed by the Chicago Climate Exchange (CCX), and work out more specific accounting methods as it goes along.

Since 2003, the CCX has traded soil carbon under a broad zone system that assumes that over specific land types, under certain practices like minimum tillage or rotational grazing, an average amount of soil carbon will be generated.

"Midwestern US soils that have adequate rainfall and good crop potential receive 0.6 metric tons of credit per year," Mr Miller said.

"The drier, less productive soils of the southern Plains states receive 0.2 metric tons of credit per year."

Arid desert soils, and some sandy soils in Florida are excluded from the system.

"I believe that the CCX approach of establishing the scientific mean, but then using a credit rate that is discounted by some amount—such as 20pc as CCX does—is an appropriate way to set a rate that has strong statistical validity," said Mr Miller.

"With a credit rate that is discounted from the mean, the statistical probability of an agricultural-based credit delivering at least as much sequestration as is credited is greatly enhanced."

Perhaps as importantly as the small offset credits received by farmers—ranging from $3-$7 a ton—engagement with the CCX has driven interest and research into greenhouse gas sequestration.

"We have protocols developed and implemented for no-till, grasslands, rangeland management, afforestation, managed forests, agricultural methane destruction at livestock facilities, and biomass substitution for coal," Mr Miller said.

"We have producers enrolled, projects verified, credits registered and traded and producers paid. That represents substantial achievement towards development of a new market and all of the market infrastructure that is required to have a well functioning and successful market."

The CCX traded 23 million tons of carbon credits in 2007, under a fully voluntary system.

Closer to home, Alex McBratney, Professor of Soil Science at the University of Sydney, is working on a similar discount methodology that he believes may have the scientific rigour to get soil carbon into the Kyoto II protocol to be thrashed out in 2012.

"It's based on the best statistical sampling theory that we can muster, and some new technology," Prof. McBratney said.

"The methodology will tell you how much carbon you've fixed over five years, across a whole farm—not a plot or paddock—and it will also tell you the uncertainty on that number."

So far his research has been unfunded, but he is hopeful that an application before the Australian Research Council will get the project up and running.

"Agriculture needs to be in the carbon trading system," Prof. McBratney said.

"Soil has the ability to sequester carbon. The only issue is whether you can audit it. But unless you can actually sequester carbon somewhere, I don’t see how the cap-and-trade system actually works—so we need some sinks for carbon."