Carbon Farming and Carbon Credits

March 29, 2022

Carbon farming and carbon credits

Why Carbon Farming?

Land management is among the largest contributors to climate change.

Agriculture is the ONE sector that has the ability to transform from a net emitter of CO 2 to a net sequester of CO 2 — there is no other human-managed realm with this potential. Common agricultural practices, including driving a tractor, tilling the soil, over-grazing, using fossil fuel-based fertilizers, pesticides, and herbicides results in significant carbon dioxide release.

Alternatively, carbon can be stored long-term (decades to centuries or more) beneficially in soils in a process called soil carbon sequestration. Carbon Farming involves implementing practices that are known to improve the rate at which CO 2 is removed from the atmosphere and converted to plant material and/or soil organic matter. Carbon farming is successful when carbon gains resulting from enhanced land management and/or conservation practices exceed carbon losses. The following list represents practices that score will in carbon markets. However, Nutrient Management is perhaps the easiest to implement without increasing risk, adding equipment of changing crops:

(The majority of these practices were selected from the USDA-NRCS GHG Ranking Tool)

Mulching/compost application

Residue and Tillage Management, No-Till/Strip-Till/Direct Seed

Anaerobic Digester

Multi-Story Cropping

Windbreak/Shelterbelt Establishment

Silvopasture Establishment

Forage and Biomass Planting

Nutrient Management

Tree/Shrub Establishment

Forest Stand Improvement

Contour Buffer Strips

Riparian Restoration

Riparian Forest Buffer

Vegetative Barrier

Windbreak/Shelterbelt Renovation

Alley Cropping

Riparian Herbaceous Cover

Range Planting

Herbaceous Wind Barriers

Critical Area Planting

Residue and Tillage Management

Forest Slash Treatment

Filter Strip

Grassed Waterway

Hedgerow Planting

Cross Wind Trap Strips Conservation Cover

Wetland Restoration

Carbon Credits

Now President Biden is proposing to create a carbon bank at USDA that would buy and sell carbon credits from farmers using a reverse action technique in which farmers bid the prices they want to be paid. The credits would then be sold to corporations such as energy companies that need to offset their greenhouse gas emissions. The concept has won the endorsement of a new coalition of farm, food, forestry, and environmental groups called the Food and Agriculture Climate Alliance. The coalition includes the American Farm Bureau Federation, National Farmers Union, the National Council of Farmer Cooperatives as well as two major environmental groups, the Environmental Defense Fund and The Nature Conservancy. Other alliance partners include FMI — The Food Industry Association, National Alliance of Forest Owners, and the National Association of State Departments of Agriculture.

The group calls for one-time government payments to “early adopters,” farmers that have already

undertaken carbon-sequestration practices. The group also endorsed making farmers eligible to earn transferable tax credits for emission reductions, but that would require congressional approval, and tax legislation could be especially difficult to move through a closely divided Congress over the next two years.

A nationwide cap and trade program hasn’t been on the legislative horizon since the idea died in

Congress in 2010, but Biden and private market developers are counting on there being a robust

demand for carbon offsets from a host of corporations, including energy companies, airlines, and even

major food companies, that need to offset their emissions. Many have set emission targets to meet or

exceed the Paris climate agreement’s goals for limiting global warming.

Economics

Standards must be developed that accurately capture emissions of carbon at the farm level and the

amount of carbon sequestration permanently into the soil. The difference between those two measurements will be the net carbon that a farm producer will be paid. The market will rise and fall based on pressures for purchasing carbon off-sets and the ability and willingness of farmers to participate in the carbon markets, but we can assume the price range will be in the $10-$85 per ton range. The emissions are coming from crop residue decomposition, applied inorganic N and phosphorus fertilizers, N leaching losses, application of pesticides, fuel used in various farming operations (such as planting, spraying pesticides, harvesting, and so on); and fossil energy used during the manufacture, transportation, storage, and delivery of these crop inputs to the farm gate.

Carbon Farming with Terreplenish

Terreplenish will replace 40-60 lbs of fossil fuel-based nitrogen. Most soils have more than

adequate phosphorous fertilizer, but it is not available to plants because of the bonding with clay particles. Terreplenish includes phosphorous solubilizing bacteria (PSB’s) that will release immobile phosphorous reducing the need for fossil fuel phosphorous.

Terreplenish eliminates the need for fossil fuel-based fungicides as soil-applied Terreplenish will prevent most soil-borne pathogens such as phytophthora, septoria, pythium, and many others. Reducing or eliminating these inputs not only lowers on-farm carbon emissions but also reduces the emissions from the manufacture and delivery of these fossil fuel inputs. These reductions will result in healthier soil capable of sequestering significantly more carbon.

Therefore, a realistic assessment of these carbon gains should be in the 1-3 ton range. This should result in a carbon payment in the $25-$50 per acre range. But the real economic gain is the savings from not purchasing the additional nitrogen, phosphorous, and fungicides. This economic measure does not include the many other benefits from applying Terreplenish such as moisture retention and accelerated maturity.