Carbon Is Agriculture’s Latest Money-Maker. But Is It Enough to Combat Climate Change?

by Dana Cronin (KCUR/NPR/All Things Considered) ... Jason (Lay) is part of Bayer’s pilot carbon program, which pays him $10 for every acre of cover crops he plants. Acting as the intermediary, Bayer then sells those carbon offset credits to companies looking to reduce their carbon emissions.

More and more big agriculture companies like Bayer are experimenting with carbon markets amid a push for the agriculture industry to capture climate-warming greenhouse gases. Canada-based fertilizer company Nutrien has about 225,000 acres enrolled in their pilot program. Cargill recently announced they’ll also cash in on carbon trading beginning this year.

Even the Biden administration is looking to agriculture to help offset the country’s emissions. And the industry is uniquely poised to do so.

“Right now, we can get every farmer on Earth to change their behavior if we incentivize it correctly,” said Chris Harbourt, chief strategy officer for Boston-based start-up Indigo. “They have the infrastructure, the equipment, they're already dispersed across the globe to make that happen immediately. And that would cause a measurable change to our atmosphere.”

Planting cover crops, for example, is both time consuming and expensive for farmers. The crop has to be planted right after a cash crop field (corn or soybeans) is harvested, and the seed alone can cost a farmer tens of thousands of dollars.

That’s why Indigo offers its farmers some of the shortest contracts of any carbon program. While most contracts are about 20 years, Indigo offers five-year contracts to avoid scaring farmers off with long-term commitments. Harbourt says that can especially entice farmers who rent their land and operate on short-term lease agreements.

Plus, she (Giana Amador, co-founder of Carbon180) says, while storing carbon in the soil is undoubtedly an important part of the climate change solution, there’s still a lot we don’t know about how it works. Carbon180 is advocating for more federal funding to research soil carbon sequestration in order to better understand it.

“In the long run, we need to … continue to improve on the science before we design incentives for the agriculture sector,” she said.

Even though regenerative farming has benefits on the farm beyond carbon sequestration, many farmers are still hesitant to make the transition for financial reasons.

Whether it’s lucrative enough for farmers at this point is still an open question. Jason Lay, for example, is paid $10 per acre of cover crops. At 2,700 acres planted this year, he can potentially gross $27,000, which just barely offsets the cost of planting covers crops and is only a small fraction of his total gross income this year.

That number could indeed go up significantly if the carbon marketplace continues to grow. As companies around the world continue to make carbon reduction pledges, carbon credits will become an increasingly common way to meet those goals — especially for companies that can’t get away from emitting carbon — airlines, for example. And, according to Chris Harbourt, there’s only so much agricultural land available to offset it.

“When the demand for carbon credits is that high, the cost is going to go up,” he said. “It's going to become a pure economic concept.”

If that does happen, Lay says — without a doubt — more farmers will get on board with carbon farming. READ MORE