Carbon sequestration in agricultural soil has been identified as a potential strategy to offset greenhouse gas emissions. Within the public debate, it has been claimed that provision of positive incentives for farmers to change their land management will result in substantial carbon sequestration in agricultural soils at a low carbon price. However, there is little information about the costs or benefits of carbon sequestration in agricultural soils to test these claims. In this study, the costeffectiveness of alternative land-use and land-management practices that can increase soil carbon sequestration is analysed by integrating biophysical modelling of carbon sequestration with wholefarm economic modelling. Results suggest that, for a case study model of a crop-livestock farm in the Western Australian wheatbelt, sequestering higher levels of soil carbon by changing rotations (to include longer pasture phases) incur considerable opportunity costs. Under current commodity prices, farmers would forego more than $80 in profit for every additional tonne of CO2-e stored in soil, depending on their adoption of crop residue retention practices. This is much higher than the initial carbon price of $23 t(-1) in Australia's recently legislated carbon tax. This analysis does not incorporate the possibility that greenhouse gas emissions may increase as a result of including longer pasture phases. Accounting for emissions may substantially reduce the potential for net carbon sequestration at low carbon prices.
