As support for a regulated carbon market continues to grow, many parties are eager to join. A carbon market incentivizes participants to reduce emissions and/or store carbon. These actions provide them with carbon credits which they can then sell to other parties in the market. Though carbon markets do exist in select US areas, pricing structures aren’t well regulated, and participation is restrictive, especially for smaller parties like farmers.
A nationwide, government-regulated carbon market would hopefully alleviate this issue, allowing farmers and landowners to join in and leverage their carbon-storing potential.
What Farms Have to Offer the Carbon Market
In addition to earning credits by reducing emissions and fossil fuel use, participants in the carbon market can also earn credits by actively storing carbon. Up to this point, most carbon offsetting has been done either through tree planting and forest management or geological sequestration. Geological sequestration can be effective and long-lasting, but it’s also expensive and complex, making it an unrealistic option for many.
Woody sequestration through trees and forests is certainly more accessible, but it isn’t a perfect solution either. In addition to being vulnerable to wildfires, trees take decades to reach their true potential. There are also a growing number of experts who believe the carbon-storing effectiveness of forests may be exaggerated. Instead, they believe a greater emphasis should be placed on herbaceous carbon sequestration.
This is where farmers have a lot to offer.
Unlike woody sequestration, herbaceous sequestration can be established in a few years. In addition to storing carbon, the native grasses and forbs used for herbaceous sequestration help improve soil health. Healthy soil, in turn, stores more carbon.
The Future of Farmers in the Carbon Market
Though farmers can participate in the current carbon markets, it’s expensive and complicated, requiring them to go through larger organizations. The hope is that a government-regulated market could streamline this process and encourage more farmers to join.
A new bill was proposed in June that would establish a USDA certification program that would allow private farming parties to generate and sell carbon credits. This bipartisan bill known as the Growing Climate Solutions Act would provide the opportunity for farmers to be financially rewarded for the sustainable steps that many are already taking. The bill would also create an advisory council comprised of agriculture experts, scientists, conservationists, and producers to keep up to date on carbon market developments and attend to the needs of farmers and other participants.
“America’s farmers and ranchers have made tremendous strides in reducing our carbon footprint, with overall greenhouse gas emissions under 10% for our industry,” said Zippy Duvall, president of American Farm Bureau Federation. He went on to praise the new bill, believing it will further inspire the ag community to take action.
Another bill currently proposed that advocates farmer participation in carbon markets is the Agriculture Resilience Act (ARA). This bill supports the creation of infrastructure for ecosystem service markets including carbon trading and water-quality trading programs. It also supports increasing the acreage cap for the Conservation Reserve Program, creating a pilot program for grasslands at risk of reverting to traditional crop land or development.
While we wait to see if and when these bills are passed, farmers can still receive compensation for herbaceous sequestration through the Conservation Reserve Program. CRP offers market-based rental payments in exchange for taking marginal land out of active production and establishing native vegetation. Not only does this help store carbon, but it improves soil health, provides habitat for wildlife, and protects local water supplies.
If you’re interested in enrolling in CRP, FDCE can help. We provide full-service CRP solutions that handle buying CRP seed, planting, herbicide application, and report submission to FSA for cost-share reimbursement. Our team of CRP service contractors can also help you understand and explore opportunities currently available for sequestering carbon, harvesting and selling biofuel, and more.