Farming and ranching have significant carbon footprints, certainly. But the crops produced every day across America also draw carbon from the air and store it in the earth, helping offset and reduce greenhouse gas emissions and regenerating healthy soil. Few if any other sectors have the opportunity to help battle climate change – or to do so through practices that will help reduce costs, improve yields and boost profits on the farm.
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When President Joe Biden announced his goal of making the United States carbon neutral by 2050, a lot of eyes immediately turned to the agricultural sector.
After all, farming and ranching accounts for about 38 percent of land usage worldwide – more than 12.4 billion acres – with the land in the United States alone using about 44% in some form of agriculture and food production. Farming and ranching have big carbon footprints, certainly.
But the good news is that crops produced every day on this land also draw carbon from the air and store it in the earth, helping offset greenhouse gas emissions and regenerating healthy soil. The cattle on the range help enrich the soil, which grow the grasses that sequester carbon. In fact, we need carbon for our plants and trees to grow, giving ag a promising opportunity to help battle climate change through practices that will reduce costs, improve yields and boost profits on the farm.
A Solution – Carbon Trading
Here is how it works. Those businesses that emit carbon will buy carbon credits from those who sequester carbon, avoid carbon, or capture emissions. In the case of agriculture, a farmer naturally pulls carbon out of the air just by growing crops or raising cattle on the range.
Let’s say a corn farmer with 1,000 acres wants to participate in this program. The conversion is approximately 0.5 tonnes of carbon per acre, but it depends on whether the farmer utilized no-till, reduced fertilizer, restores wetlands, plants, trees, etc. They would sell their carbon credits to a broker who would then sell it to a company, such as Microsoft, or an individual who emitted carbon and wants to offset it.
What’s the story behind carbon sequestration?
The overall effort is referred to as “carbon sequestration” – a systematic approach to expanding on-farm efforts to lock carbon in the soil through better farming practices. No-till and low-till farming, use of cover crops, smart crop rotation, expanded plantings of perennials, rotation of cropping, and animal grazing all contribute to keeping or pulling carbon into the ground and out of the atmosphere. The result: less of the carbon dioxide (CO2) that many scientists say too much promotes rising global temperatures.
Today, more and more farmers and ranchers are embracing the idea of carbon sequestration, both as a responsible environmental practice and a means of improving their own economic sustainability. The government, various academic institutions, and some important private enterprises are establishing practical methods of measuring the results of on-farm carbon sequestration efforts and building an effective marketplace to establish a value for their results.
The challenge here will be to ensure a verification process that works for each farm in each state with different types of farming practices and soil health.
But the benefits to farmers and society don’t end with reduced CO2. Science also shows that these practices are important to the entire “regenerative agriculture” movement, which seeks to promote an improved and sustainable approach to generating and maintaining the healthy, vital soil needed to feed this and future generations.
It all remains very much a work in progress, but the initial efforts have proven highly appealing to the farm community and all others with an interest in a better environmental future.
A recent study by the University of Missouri’s Division of Applied Science found very encouraging results of efforts to date. Rising food production levels over recent decades have indeed raised the overall greenhouse gas emissions from agriculture, the study found. But expanded use of cover crops, no-till, and other carbon-capturing techniques have helped fuel a decline in the per-unit emissions for both crops and beef. In plain English, “we are producing more units of food at less greenhouse-gas emission per unit of food than before,” according to authors Ray Massey and Cammy Willett.
Analysis done at the 2015 Paris climate conference contended that even a small increase in the levels of carbon in soil would have a major environmental benefit. Called the “4 per 1000” initiative, scientists argued that increasing soil carbon by just 0.4 percent annually would offset an entire year’s increase in CO2 emissions from fossil fuel emissions.
What’s the Value of Sequestered Carbon?
Carbon sequestration in agriculture is in many respects an extension of a well-established environmental principle encompassing energy, industrial and other sectors. As far back as 1990, the Environmental Protection Agency (EPA) sought to reduce the emission of sulfur gas – and resulting “acid rain” — from coal-fired power plants.
Credits for reduced emissions helped spur the needed transition to more environmentally friendly practices – and helped usher in the idea of a marketplace for these “carbon credits.” The industry could use these credits to offset actual emissions, in effect buying time to make costly changes while still advancing the larger goal of lowering harmful emissions.
A “carbon credit” typically represents one metric ton of CO2. The prices paid for carbon credits vary widely, based upon the industry or sector involved and changing market factors. A carbon credit within agriculture currently is in the range of $30 per metric ton and remains fluid as more and more organizations enter the marketplace.
There is a question as to what the price has to be in order for the farmer to make a profit after incorporating some sequestering practices. It could be as high as $35 per ton. Studies on the subject provide varying estimates of just how much carbon can be sequestered per acre, depending upon the production techniques employed, soil types, water conditions, and numerous other factors. One study found no-till alone could sequester an average of 0.3 metric tons per acre per year – or roughly an extra $10 for every acre of cropland.
Sounds great. So what’s the problem?
Part of the challenge facing the carbon sequestration efforts rests in the sheer complexity of the task.
The first challenge is to collect enough data to deliver precise result metrics. The effectiveness of carbon sequestration in farming varies by several factors — soil types, soil health, climate conditions, water presence, to name a few. Fine-tuning the analytical process demands extensive data collection and careful analysis by agronomic experts. That work will be critical to developing a better understanding of the most effective practices in each production area or individual farming situation.
But an aggressive effort on that front is already underway across many leading universities and private institutions. Coupled with advances in data analysis services available to farmers, this work promises to help refine the assessment process and lower the costs of current expensive analysis.
Another big task is the development and refinement of carbon credit markets. How will farmers and ranchers be rewarded for their success in locking away more and more of the carbon blamed for climate change?
As with any new economic phenomenon, the emergence of carbon markets has produced what may seem to be a complex and fragmented marketplace.
The government, private enterprise, and opportunistic market players all seem to be working to create markets attractive to producers, while Congress and the Biden Administration continue to wrangle over the development of comprehensive and cohesive policies and regulations for a major agricultural economic frontier. Amid all the discussion and debate, Economist J. David Aiken of the University of Nebraska-Lincoln calls the current environment “the wild, wild west.”
One major market has emerged for industries subject to stringent environmental regulations. The coal-fired energy plants that once dominated energy production helped pave the way for the development of the markets needed to buy carbon credits.
Today, energy, chemical production, waste management, forestry and lumbering, industrial manufacturing interests, and other non-agricultural enterprises actively seek to purchase carbon credits, most often through private agreements.
Efforts by the Obama Administration in the wake of the Kyoto climate accord to develop the Chicago Climate Exchange showed the difficulties that come with such an ambitious undertaking. The exchange sought to create a market for greenhouse gas credits but died amid congressional opposition to the Obama approach to GHG regulation.
Legislation to create a carbon bank through the U.S. Department of Agriculture remains before Congress, with bipartisan support from farm-state and other legislators with a genuine concern about climate change and the positive role to be played by the agricultural sector in dealing with it. Progress in advancing the bill, however, remains complicated by the larger political logjam regarding legislation deemed by political leaders as having higher national priority.
Many private and commercial entities have entered the market space, seeking to develop networks of producers willing to help build the needed data banks in exchange for financial payments based on acceptable measurement standards and techniques.
The challenge will be for companies to add up all their carbon emissions and figure out how much they need to offset with a carbon credit. This will be a time-consuming and arduous process. Economists like Aiken predict dramatic growth in these “voluntary carbon markets,” citing the work of Stephen Donofrio at Forest Trends, who projects growth of 1,500 percent by 2030 for them. McKinsey predicts a $50 billion market by 2030.
What comes next?
The role of carbon sequestration within U.S. agriculture is increasing – but the road ahead will be long and winding.
A large part of the frustratingly slow pace can be traced directly to Washington, D.C., and more specifically, Capitol Hill. Clear direction in the form of agreed policies, standards, and regulatory guidelines would do much to advance the adoption of the environmentally friendly practices important to dealing with the climate change challenge.
But there’s good news, despite the frustration with Washington. The agricultural sector isn’t waiting for D.C. legislators and bureaucrats to find the answers needed for a climate solution.
Farmers and ranchers recognize the value of exactly the practices at the core of carbon sequestration – and the broader set of practices that contribute to soil health and comprehensive regenerative agriculture. Environmentally smart practices already are part of the production and land stewardship approach taken by farmers today. Creation of carbon markets will serve to speed and expand adoption of such practices. Not to mention offer another income source for farmers.
The farming and ranching community already is one of the most environmentally aware and committed sectors of our society. Its members know that responsible environmental practices aren’t just the right thing to do but the smart thing to do as well. They know we all have a role to play in dealing with the climate change that threatens all of us. And they know that these practices can have a major positive effect on their own economic survival, beyond an additional income stream.
Soil sequestration practices cut costs. Over time, they enhance yields. And maybe most important in an era of rising costs and smaller margins, they mean a stronger bottom line — and their own operational sustainability.
The Bottom Line
Agriculture can be a significant contributor to an aggressive approach to dealing with climate change. Locking carbon in the soil and reducing the amount released into our air can help stem the creation of greenhouse gases – and in the process, help farmers and ranchers earn much-needed rewards for their aggressive efforts to embrace the production practices important to a sustainable food system – and a sustainable planet.