Hi Jonathan, thanks for this piece! If we assume irrigation cost to be $600 and the value of cane production $500 per acre, does this mean current production is loss-making and presumably financed by subsidies? Or is sugar cane not the usual crop grown nowadays?
It depends on what you think of carbon pricing. For freshly-irrigated land, the carbon accounting is pretty easy. Total SOC starts at zero, so any assay should be directly monetizable. If the bagasse is burned to completion, well, that nets to zero carbon credits, but if it's used for process heat to turn part of it into (relatively permanent) biochar or biooil for stabilization, then there's more carbon credits to tap into. Since some academics are talking about carbon farming (grow shit and bury it for carbon credits) this ought to be a better approach.
Yes, this calculation makes sense and as you say, can get more complex the deeper you dig in. But good to know that with a back of the envelope calculation it seems to be profitable at least! My feeling is as carbon gains decrease with time spent on the land, energy will become cheap enough to justify the economics anyway, as you pointed out in the latter part.
I think I see now. The $500 is profit made with irrigation from the Nile. Using desalinated water would add a cost of $600 which would not be enough if we only make $500 profit from the sugar cane cultivation, but it works out with the carbon credits.
There is a significant amount of cane (and cotton) grown under irrigation in Egypt. The latter obviously is difficult to biodegrade and is useful, so may be eligible for credits, too.
I'm in SF next week, just sent you a message on LinkedIn!
Hi Jonathan, thanks for this piece! If we assume irrigation cost to be $600 and the value of cane production $500 per acre, does this mean current production is loss-making and presumably financed by subsidies? Or is sugar cane not the usual crop grown nowadays?
It depends on what you think of carbon pricing. For freshly-irrigated land, the carbon accounting is pretty easy. Total SOC starts at zero, so any assay should be directly monetizable. If the bagasse is burned to completion, well, that nets to zero carbon credits, but if it's used for process heat to turn part of it into (relatively permanent) biochar or biooil for stabilization, then there's more carbon credits to tap into. Since some academics are talking about carbon farming (grow shit and bury it for carbon credits) this ought to be a better approach.
Yes, this calculation makes sense and as you say, can get more complex the deeper you dig in. But good to know that with a back of the envelope calculation it seems to be profitable at least! My feeling is as carbon gains decrease with time spent on the land, energy will become cheap enough to justify the economics anyway, as you pointed out in the latter part.
I think I see now. The $500 is profit made with irrigation from the Nile. Using desalinated water would add a cost of $600 which would not be enough if we only make $500 profit from the sugar cane cultivation, but it works out with the carbon credits.
There is a significant amount of cane (and cotton) grown under irrigation in Egypt. The latter obviously is difficult to biodegrade and is useful, so may be eligible for credits, too.