Carbon Farming: Cause for Cautious Optimism
No-till and cover cropping are agricultural practices that increase permanent soil carbon sequestration when implemented over multiple years, and as a result can be eligible to earn carbon credits for offsetting GHG emissions. Aggregators- companies who manage pools of carbon offsets- collect and synthesize data in order to quantify an estimate of soil carbon sequestration. After offsets are verified and accredited, the aggregator sells the resulting credits to interested parties such as activists or corporations seeking carbon neutrality.
According to Ecosystem Marketplace, the global voluntary carbon offsets market saw an exchange of about $1 billion in carbon credits in 2021 and could expand to tens of billions by the next decade. Even as the buzz around “carbon farming” intensifies, so far only 1% of carbon offsets currently originate on farms. From this standpoint, there is a great opportunity for putting billions of carbon dollars into the agriculture industry in a matter of years. With 400 million acres of cropland in the U.S., the market of farmers and land enrolled in carbon programs is limited primarily by their confidence in committing to cover cropping and no-tillage practices they may be unaccustomed to.
Elephant in the Room
Some aggregators are beginning to pay growers right away for carbon credits that won’t be verified until years down the road. Programs like the CDFA’s Healthy Soils Program were designed to remove some of the costs of adopting cover cropping in the hopes that growers will continue the practice even after that money has been paid out. The promise of frontloaded payments for back loaded commitments is one way to gain immediate traction, but it will present lingering questions years down the road when aggregators or governments need growers to keep managing their cover crops and no-till operations in order to maintain the integrity of the offsets that have been accumulated. The trouble with soil carbon is that unlike some other forms of carbon capture or mitigation, it can be undone with something as simple as a plow. Carbon stored in 2021 can be re-released into the atmosphere in 2026 if growers revert to tilling or have to dramatically disrupt the soil.
These long-term stipulations must be reconciled with the fact that few growers have ever looked at cover cropping or tilling in such far-future terms or been under contract to see them through. With so many variables threatening to disrupt the longevity of farm-based carbon projects, there is doubt as to weather such projects truly provide the benefits claimed in a way that is transparent, structured, and lacking conflicts of interest.
Questions around pricing and contract structure in the overall carbon market were of prevailing interest to attendees of the recent Almond Conference in Sacramento, CA. Growers boil carbon credits down to a numbers game; if there is money available now, take it and see what happens, with some likening such payments to “interest-free loans.” From the standpoint of innovating the business side of farming and carbon offsets, the exchange of money is promising. But from the standpoint of securing the sustainability of carbon farming at scale a decade or two from now, it serves as a reminder that changing the industry cannot happen overnight. Cover cropping can absolutely be profitable and feasible at a large scale, but nobody should mistake the carbon market as a shortcut to profitability without commitment.
