Farm groups, politicians and environmentalists want to make carbon a new commodity, in order to battle climate change.
Carbon markets, in theory, could be a win-win — farmers and foresters could get paid for storing carbon in their soil or trees, companies could offset their emissions by buying credits, and the world could see a net decrease in emissions.
But, in reality, as they develop, carbon markets bring a lot of questions about the roles of public and private work to address climate change, and who benefits the most from those efforts.
“It’s good to be skeptical, because we don’t want to have sort of a mad gold rush, and everybody thinking that it’s easy and cheap, and it’s the silver bullet that’s going to solve climate change — because it’s not,” said Kris Johnson, interim director of agriculture for The Nature Conservancy’s North America region. The Nature Conservancy is a global environmental nonprofit, based in Virginia.
The Food and Agriculture Climate Alliance, a group that includes the American Farm Bureau Federation, the Environmental Defense Fund, the National Farmers Union and The Nature Conservancy, says it would support voluntary federal policies that encourage carbon storage and private markets for carbon and other greenhouse gasses.
Organizations like Indigo Ag, a Boston-based ag technology company, and Truterra, a sustainability business owned by Land O’Lakes, are already helping farmers create and sell carbon credits, which represent carbon stored in soils or forests, through management practices that encourage and allow carbon storage. Multiple companies, like Amazon and Microsoft, are buying or showing interest.
Jim Goodman, board member for Wisconsin-based national grassroots organization, Family Farm Defenders, and retired dairy farmer, is skeptical about the idea.
“Sequestering carbon in the soil is a great idea,” Goodman said. “The idea of having farmers sequester carbon and then put that sequestered carbon into a market is something I don’t necessarily agree with … This whole thing just seems to be a scheme, to me, to allow polluting industries to continue to pollute.”
John Peck, executive director for the group, agreed.
“I don’t think having a privatized solution to the climate crisis is a good idea at all. It’s a public problem; it’s all of our problem, we can’t leave it to the marketplace,” Peck said.
Goodman and Peck would rather see government funded programs providing incentives for climate friendly practices than see a focus on private carbon markets.
Some worry it’s too easy to release carbon back into the atmosphere, or that third parties and companies buying credits will take advantage of farmers. Many questions remain unanswered.
Carbon storage
Carbon can be stored in soil, as well as in forests. But how does that process work?
Plants use energy from the sun, and carbon dioxide, said Yichao Rui, research director of the Farming Systems Trial at the Rodale Institute. Plants turn the carbon into a type of sugar, and that sugar ends up in the soil through the plant’s roots or residue when the plant dies. Soil microbes feed on the carbon, and turn it into a form that can be stabilized in the soil.
“Plants are nutrient-limited,” Rui said. “Microbes are carbon-limited … To facilitate carbon sequestration, we really need the plants to do photosynthesis. We also need microbes to do stabilization.”
There is more and more evidence, Rui said, that no till by itself does not sequester carbon, though it can slow down carbon loss, and can reduce runoff and help protect the soil’s surface during winter.
“No till can sometimes show some carbon benefit in the topsoil,” he said. “But if it’s in a conventional setting, it does not embrace a whole system approach of improving input.”
Conventional no till can also result in compaction in fields, he said, while organic no till doesn’t tend to do that.
“It helps close the loop,” he said. “When you farm, when you harvest, when you don’t put those things back, you are kind of creating a gap in the loop.”
Diverse cover crops, especially legumes, can be helpful for keeping microbes healthy so they can stabilize carbon in soil, Rui said. The deeper carbon is in the soil, the more protected it is from being released again. And it takes time for carbon to become stabilized.
“It’s not just a one time thing,” Rui said. “It’s always about the input and output. The output will always be there. You have to keep putting in to close the loop.”
Carbon emissions from deforestation and land use contribute to about 11% of greenhouse gas emissions globally, according to U.S. Environmental Protection Agency data.
“The question is, how can carbon be put back in soil?” said Rattan Lal, professor of soil science and director of the Carbon Management and Sequestration Center at Ohio State.That’s where climate friendly agriculture comes in, he said. Practices like no till and cover crops can help soil store carbon. But many of those practices have costs, and it can take up to five years for soil to adjust.
During that transition, the crop yield may be lower, Lal said. But after that transition period, farmers should need less inputs for fertilizer and herbicides and have less erosion and stronger systems.
“That transition period is the danger,” he said. “Society … must ensure that farmers do not lose financially, so that they continue.”
It’s also very easy to undo that work, if someone switches away from climate friendly practices again.
“If you pay farmers fairly, justly, properly, transparently, they will do what we think they should do,” he said. “If you don’t pay them, you don’t get it.”
Offset
There’s a few reasons that companies get involved in carbon markets, said Brent Sohngen, professor of environmental and resource economics at Ohio State University.
Some might be concerned about being climate friendly. If a company wants to be carbon neutral, but still needs to travel by plane or car, they have to somehow offset their transportation emissions. And, he said, many are betting there will be more regulations down the road.
Peck doesn’t like that farms in Wisconsin, where he lives, could be used to offset emissions elsewhere.
“Just ’cause we’re doing good things in the Midwest doesn’t mean that someone else should be able to do bad things in California,” he said. “The whole idea of turning a bad thing into a good thing, which is what pollution trading does, is problematic.”
Josh Parrish, director of The Nature Conservancy’s Working Woodlands program, sees carbon markets as a bridge to help companies shrink their footprints while reducing their emissions, and to offset emissions that are harder to avoid.
There is a limit on how much carbon soil and forests can hold, so the world would need to reduce emissions as well to make a long term difference. Markets are a tool, but not the answer by themselves, he said.
“Folks don’t want to see people just buying offsets,” he said. “They are part of the package that includes ambitious goals and reductions.”
Additionality
So far, most private markets have focused on “additionality,” a term meaning that buyers are paying for new and additional carbon storage, rather than carbon that’s already being stored, Sohngen said. So, people already storing carbon may not be able to get in on some markets.
“It does and doesn’t make sense,” Sohngen said.
It’s an interesting economic question. If people are already using climate friendly practices, then it’s more efficient to leave them out of the market, he said. But there are reasons to pay people already doing those practices — like paying them not to quit.
“I understand why private markets are careful,” he said. “Public markets, if they emerge, could potentially … include equity … rather than simply the most efficient thing.”
Forests
Forests are another major potential carbon sink — maybe even more than soils. And a lot of people who own forests also own farmland.
About 25% of forest owners report that their land is associated with a farm or ranch, according to data from the U.S. Forest Service. California’s cap and trade program has mostly relied on carbon credits from forests so far, said Brent Sohngen, of Ohio State University.
Elizabeth Greener, communications director for the American Forest Foundation, a national conservation organization that jointly started the Family Forest Carbon Program with The Nature Conservancy, said families and individuals own about 36% of U.S. forest land. But they mostly own it in small tracts.
So, the program groups family forest owners together into a project, Parrish said.
The family forest program measures the benefits of practices on a certain number of the landowners enrolled, then extrapolates that to the rest of the landowners.
The program focuses on paying people for changes in their carbon sequestration, rather than for carbon they already have.
“We want to see people doing something different and positive,” Greener said. “We’re asking them to implement a practice on their land in order to get paid.”
Carbon payments aren’t great get rich quick schemes for family forest owners, Parrish said. But they could help cover the costs of maintaining and managing a forest.
Less than 20% of family forest owners even have a management plan. The program aims to help forest owners learn more about forest management and identify future goals and a management plan.
“For a lot of the landowners, this is new,” Parrish said. But interest in the program has been strong since it launched in Pennsylvania in 2020. More than 40 landowners have enrolled about 5,400 acres. Parrish hopes the program will be in the millions of acres by 2030.
The program isn’t just about carbon sequestration, Greener said. Many of the practices that help sequester carbon in forests have other benefits, like improving timber value, water quality and wildlife habitats. Many who get into the program do it for those reasons.
Other benefits
Johnson said practices that help sequester carbon could also help improve water quality and quantity and net greenhouse gasses. The Ecosystem Services Market Consortium, which The Nature Conservancy is a part of, plans to offer four types of credits, one for each of those things.
Once a farmer gets through the transition period, Johnson said, some practices can actually be cheaper and less labor intensive. Others, like installing wetlands or planting cover crops, can be more expensive.
Measuring
Measuring the outcomes of practices is an important part of the conservancy’s programs. But it can get expensive, he said.
To keep the costs of monitoring, reporting and verification as low as possible, the group uses a combination of local data and models.
Measuring carbon in soil isn’t complicated, Lal said. They can test soil to determine the percentage of carbon in it, then translate that into tons per acre. Soil maps and measuring different depths of soil can also help with accuracy.
“It is not difficult at all. It’s a matter of understanding,” Lal said. “The scientific community will never say we know everything — of course we don’t … But we know enough to begin to adopt, to advise policymakers what to do.”
Prices
There is a cap and trade program in California, and a regional cap and trade program in 10 northeastern states. But much of the U.S. has no such program, so there’s little incentive to pay top dollar for carbon credits, Sohngen said.
“Right now, we don’t have carbon policy in this country,” Johnson said. “There’s no real viable carbon price.”
So far, prices for carbon haven’t been high enough to drive much of a reduction in emissions, said Ben Lilliston, director of climate and rural strategies with the Institute for Agriculture and Trade Policy, an international nonprofit focused on advocating for fair and sustainable food, trade and agriculture systems, in a Feb. 12 webinar for the Ohio Ecological Food and Farming Association.
If more regulations get involved, prices could go up. The downside is that energy prices could also go up, so it may still not be a net positive for every farmer, Sohngen added.
Other concerns
But for now, it’s still the Wild West. Colin Mitchell, sustainable agriculture specialist for the National Center for Appropriate Technology, a national nonprofit that promotes sustainable living, said there are a few key things for farmers to think about before getting into carbon markets, in the OEFFA webinar.
They include how clear the required practices and verification process is, whether the farmer will be paid for implementing practices or for measured improvements, transparency on costs and payments and how long it will take to get paid.
Lilliston said these programs involve sharing data and information about farms, so it’s important to know who has control of that data, and what they’re doing with it.
This isn’t the first time carbon markets have come up. The Chicago Climate Exchange ran in the 2000s as a voluntary market, but prices dropped once legislation on climate policy fell through in Congress, Lilliston said. Depending on what happens with policy this time around, private markets could benefit or could be left on the sidelines.
And there are also racial justice concerns tied to allowing pollution to be offset, he said, especially since much pollution occurs in low income communities and communities of color.
Peck also said carbon traders have asked for the group’s membership list. He worries that companies and third parties will take advantage of farmers through carbon markets.
“[It] sort of shows the whole speculative nature, that they would be fishing for our membership list to do cold calls to try to convince farmers to put their land into carbon markets,” Peck said.
Johnson thinks skepticism is important, but he also believes in the benefits practices that encourage carbon storage can have.
“If we deliver carbon and climate change benefits and get more investments in these practices, that’s a win-win,” he said. “That’s a good reason to do it, I think.”
