Workshop Manual: The business case for carbon farming: improving your farm’s sustainability (January 2021)

9.8 Establishing the cost module

The business case: costs of establishing and running a project

The business case for carbon farming: improving your farm’s sustainability

Explore the full Workshop Manual: The business case for carbon farming: improving your farm’s sustainability (January 2021)

 
Figure 9.1 is an extract from a spreadsheet template showing how to compile estimates of annual costs associated with a project. The numbers in the extract are illustrative only.
 
  Figure 9.1: Cost module: spreadsheet extract

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Data source: CIE
 
This extract distinguishes between:
  • fixed costs (those that are not a function of area) and variable costs (those that are a function of area)
  • start-up costs (in Year 1) and ongoing costs (for all following years).
The distinction between fixed and variable costs is very important for the business case:
  • It allows the analysis to test whether the project can cover variable costs. If it cannot, it will be unable to cover the fixed costs of the project.
  • The magnitude of fixed costs (relative to overall costs) determines the minimum viable size for the project. 
Note that this template extract also includes the opportunity cost of land. This is a variable cost (it depends on the number of hectares) and occurs every year.  

Explore the full Workshop Manual: The business case for carbon farming: improving your farm’s sustainability (January 2021)

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RESEARCH REPORTS

1. Introduction: background to the business case

This chapter lays out the basic background and groundwork of the manual

RESEARCH REPORTS

1.1 Overview

Introduction: background to the business case

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1.2 Being clear about the reasons for participating

Introduction: background to the business case

RESEARCH REPORTS

1.3 Key steps in a decision process

Introduction: background to the business case

RESEARCH REPORTS

1.4 Working through the business case for carbon farming

Introduction: background to the business case

RESEARCH REPORTS

1.5 Factors determining project economics

Introduction: background to the business case

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1.6 Elements of the business case

Introduction: background to the business case

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1.7 Building an economic case

Introduction: background to the business case

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1.8 Important features of the business case

Introduction: background to the business case

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1.9 The plan of this manual

Introduction: background to the business case

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2. How carbon is farmed under the ERF

This chapter considers in detail the activities that constitute carbon farming

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2.1 The scope of carbon farming under the ERF

How carbon is farmed under the ERF

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2.2 Emissions avoidance activities

How carbon is farmed under the ERF

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2.3 Sequestration activities

How carbon is farmed under the ERF

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2.4 The negative list

How carbon is farmed under the ERF

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2.5 Carbon farming under the Emissions Reduction Fund

How carbon is farmed under the ERF

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2.6 Who's who in the CFI and the ERF

How carbon is farmed under the ERF

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3. The policy context and the price of ACCUs

This chapter takes a broad look at the policy context for carbon farming

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3.1 The policy context

The policy context and the price of ACCUs

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3.2 A documented climate challenge…

The policy context and the price of ACCUs

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3.3 … with numerous policy responses

The policy context and the price of ACCUs

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