American Farmland Trust, Sierra View Solutions Release Report on Carbon Market Programs

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August 09, 2023

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(American Farmland Trust/Morning Ag Clips) The world needs agriculture to reduce emissions to avoid the worst effects of climate change, farmers need carbon market programs to work for farming -- Carbon market programs could be key to emission reductions, but agricultural carbon reductions from these programs currently represent just 1% of the global carbon market according to the Voluntary Registry Offsets Database developed by the Berkeley Carbon Trading Project. Farmer participation is low in the 22 U.S. agricultural carbon programs created over the last 28 years (more than half created in just the last 5 years) -- despite intense marketing and communications efforts

American Farmland Trust and Sierra View Solutions release Agricultural Carbon Programs: From Chaos to Systems Change at the meeting of the Soil and Water Conservation Society annual conference in Des Moines, IA. Lead authors Michelle Perez, AFT Water Initiative Director and Robert Parkhurst, President of Sierra View Solutions will present their analysis of 22 agricultural carbon market programs and recommended changes that would help these programs succeed.

Over the next decade, the current agricultural system will need to fundamentally transform in order to produce enough food for 9.8 billion people, mitigate and adapt to climate change, protect water resources, and support farmers. According to the U.S. Environmental Protection Agency, agriculture is the fifth largest source of GHG emissions in the nation accounting for 9.4% of the nation’s emissions. According to World Resources Institute, GHG emissions from agriculture must be reduced by more than 75% compared to projected 2050 levels to prevent global emissions from increasing by more than 1.5°C above pre-industrial temperatures. Leading scientists have determined that improved cropland and grassland management practices have the potential to store more than 250 MtCO2e annually in the U.S. alone; equal to about 4% of total annual U.S. GHG emissions.

Carbon market programs could be key to emission reductions, but agricultural carbon reductions from these programs currently represent just 1% of the global carbon market according to the Voluntary Registry Offsets Database developed by the Berkeley Carbon Trading Project. Farmer participation is low in the 22 U.S. agricultural carbon programs created over the last 28 years (more than half created in just the last 5 years) — despite intense marketing and communications efforts.

The challenge was underscored by USDA Secretary Tom Vilsack at the Agri-Pulse Communications annual Ag & Food Policy Summit in March 2021 when he stated that the “carbon market is not designed and set up for farmers.”

“Among the many reasons why farmers are not enrolling in ag carbon programs, one of the most obvious reasons is that the payments being offered are too low. The highest paying carbon programs and pilots have paid producers up to $30 per acre for implementing no-till and cover crops which is far less than the $50 per acre that federal and state conservation financial assistance programs pay,” said Parkhurst.

Farmers also do not flock to participate because the ag carbon programs do not adequately define what a “new practice” is, and they are setting arbitrary caps on participation in areas where adoption of no-till or cover crops reaches what they call a “common practice baseline.” A third problem area is that carbon programs originally designed for forestry projects are being applied to farmers creating unrealistic requirements to sequester carbon for 40 to 100 years. Finally, the enrollment data requirements can be quite difficult for the 79 percent of farmers who use non-structured data management systems and/or have poor rural internet access.

The paper offers an in-depth analysis of the above challenges and more issues which are organized into the four critical barriers we think are preventing widespread farmer participation:

the economics of the programs,
concerns about additionality (whether a practice is new to the farmer or already in place),
requirements for permanence (the permanence standard, i.e., length of time, also ways to handle unintentional and intentional reversals), and
data and technology barriers for agriculture.

“In our analysis, we focus on cropland and grasslands practices because they have the smallest adoption rate. If implemented, we hope the recommendations in this paper lead to systemic change that will transform agriculture from a source of greenhouse gas emissions to a sink,” said Parkhurst.

Below are recommendations to address each of the four barriers to producer participation in agricultural carbon programs. The following changes would serve to attract and retain producers in agricultural carbon programs.

Economics

Support policies that increase the price of carbon
Create data standards for agricultural carbon programs and associated data
Design and implement insetting programs that eliminate free riding and double counting
Pay early adopters to provide peer-to-peer training

Additionality Concerns

Improve definitions of “new” practices
Adopt crediting practices that account for the variability in agriculture
Eliminate common practice ceilings
Create additional opportunities to reward early adopters

Permanence Requirements

Include buffers for intentional reversals in agricultural carbon programs

Data and Technology Barriers for Agriculture

Expand producers’ broadband access
Modernize USDA data collection and management systems and create a national model calibration dataset
Adopt national agricultural data policies

“If implemented, we hope the recommended changes will provide the public and producers with the assurance that the emerging agricultural carbon programs are a credible and cost-effective approach to climate mitigation and adaptation,” said Perez. “Agricultural practices (cover crops, low-till and no-till, and nutrient management) that are the primary focus of the newly emerging ag carbon programs have the potential to not only reduce GHG emissions and sequester carbon in the soil but also increase food production resilience to more extreme weather events by increasing soil health and reducing water, soil, and fertilizer runoff. We hope our analysis will help farm trade associations, environmental groups, carbon program developers, and policymakers better understand some of the specific barriers to enrollment that agriculture faces and embrace changes that could lead to widespread adoption of farm conservation practices.” READ MORE

Agricultural Carbon Programs: From Chaos to Systems Change (American Farmland Trust and Sierra View Solutions)

How Biden’s green farming program is gaining conservative support (Politico Energy Podcast)

Ag Policy Blog: Looking for Ways to Transform the Chaotic Carbon Market for Ag (DTN Progressive Farmer)

Climate-Smart Ag and Carbon Credits -- As Climate-Smart Projects Seek to Enroll Farmers, Additionality Question Still Unanswered (DTN Progressive Farmer)

Why should farmers care about carbon? Cover cropping combined with no-till is an ideal fit for carbon markets and other incentives. (Successful Farming)

Excerpt from Politico Energy Podcast: The Agriculture Department is pouring $3 billion into a program that pays farmers to test out climate-friendly practices instead of forcing them to pay for excessive carbon emissions. The initiative has gained widespread support within the conservative farming industry, but some climate advocates aren’t convinced it will help. POLITICO’s Garrett Downs details why the program is popular with farmers and the pushback from those climate activists. ... POLITICO. Garrett Downs is a food and agriculture reporter for POLITICO. Nirmal Mulaikal is a POLITICO audio host-producer. Annie Rees is a senior audio producer-host at POLITICO. Gloria Gonzalez is the deputy energy editor for POLITICO. Matt Daily is the energy editor for POLITICO. LISTEN

Excerpt from DTN Progressive Farmer: As Agriculture Secretary Tom Vilsack spoke at the Farm Progress Show late last month, he highlighted the ways farmers could generate more income from their operations.

Using a whiteboard, the secretary pointed to the 141 climate-smart pilot projects, noting they cut across "every major commodity and every state in the country participating." Vilsack touched on how the practices implemented would give farmers the tools to enroll in an ecosystem service market, such as carbon markets, "where people in industry will pay farmers for the sequestration of carbon and reduction of greenhouse gases." Pointing to sequestering carbon in the soil, Vilsack highlighted the value of forestry and agriculture.

"There are significant resources to increase farm income," Vilsack said.

Yet, USDA rolled out the $3.1 billion Partnership for Climate-Smart Commodities without solving one of the vexing problems that has affected farmers with carbon credit programs: How to deal with the question of "additionality," which means the farmer is taking steps to sequester carbon or reduce emissions that would not happen without the sale of the carbon credits.

That additionality question still hangs out there as projects around the country look to enroll as many as 60,000 farms and more than 25 million acres. READ MORE