While “carbon farming” continues to be touted, the current payment schemes, combined with uncertainties about measurements, have kept most farmers hesitant and on the sidelines. That was the conclusion of a recent virtual webinar, “Opportunities and challenges of storing carbon in agricultural soils,” that was hosted in early January by Purdue University’s Center for Commercial Agriculture.
Shalamar Armstrong, associate professor of soil conservation and management at Purdue, observed four potential pools or carbon sinks that can absorb or store carbon: vegetation, the atmosphere, the ocean and soil. Of these four, the soil has the most capacity. However, the soil can also return carbon to the atmosphere through microbial respiration. While soils contribute 3% of total United States carbon emissions, they contribute 25% of all agricultural emissions.
The three ways to maximize carbon capture in soils include no-till practices, minimally disturbing the soil and returning crops residues, and reducing soil erosion, Armstrong said. These practices can increase carbon retention by up to 27%. If we assume carbon retention of 10% to a depth of 3 meters, that amounts to 10 tons of carbon per hectare. Citing a Brazilian study, Armstrong said carbon storage in no-till acres was five or six times greater than in areas using continuous tillage.
Cover crops convert carbon dioxide gas to glucose, but all cover crops are not created equal, Armstrong said. Frost-intolerant crops that are killed by winter frost will release that carbon back into the atmosphere.
While carbon sequestration in soil could theoretically last for up to 100 years, studies indicate that most of the storage effects occur in the first or second decades. This raises issue of measurement and payment for participating farmers.
As Nathan Thompson, associated professor of agricultural economics at Purdue, pointed out, different soils exhibit a wide range of sequestration. They could even lose carbon. Armstrong said heat maps could be developed for different soils and geographies.
Carson Reeling, associate professor in the Department of Agricultural Economics at Purdue, laid out the mechanics of the different types of carbon markets. There are two basic types: regulatory and non-regulatory carbon offset markets. In the first type, a regulator caps total emissions and issues permits, leaving it to emitting industry to figure out how to cap or reduce emissions within the cap. Emitters buy permits or offsets, which they can trade or sell, from farmers who reduce emissions. The buyers would pay farmers to store carbon and measure their storage via a third party. California has this type of market, the second-largest cap-and-trade system, along with the mid-Atlantic and northeast states. Historically, said Reeling, regulatory carbon markets have not allowed row crop farmers to be part of offsets.
Non-regulatory markets are driven by private entities like large corporations that want to lessen their carbon footprints along their supply chains. They are served by firms like Indigo Ag, Nori and Bayer.
Even in non-regulatory markets, Reeling said the government has a role to play by setting rules and measurement standards.
All this is theoretical, however, unless growers can be persuaded to take part in these carbon reduction efforts. Thompson said that in a study of 1,600 producers, 36% were aware of carbon-storage opportunities. About 16% of those (or 6% of all producers) had actually sat down and talked with a company about carbon storage opportunities, and 1% had signed contracts to store carbon.
Why aren’t more farmers participating? According to 61% of those polled, payment levels offered were too low. Current prices range between $10 and $20 per metric ton of carbon stores. Some farmers were being offered $40 an acre to switch from conventional tillage to no-till, but they said they needed at least $80 an acre to make it worthwhile. Another 37% cited concerns about legal liability in case of non-compliance with targets. Twenty-seven percent cited skepticism over the viability of carbon sequestration, and 33% cited “other” concerns.
In short, “We have a long way to go on price,” Thompson concluded. Another concern is that payments could be revoked if the carbon sequestration is reversed. Carbon storage effects also lessen over time; Australia’s Emissions Reduction Fund reduced 100-year contracts to 25 years for this reason.
Significantly, 22% of polled growers said they worried that they could be debarred because they already used carbon-storing or carbon-reducing practices. “Carbon credit stacking” remains an issue for regulators—i.e., paying farmers for practices they are already doing. Buyers of offsets want growers who switch to new practices like no-till, which actually works as a reverse incentive against no-till. However, “I do know some people who have managed to grandfather in their pre-existing practices, and that’s great,” said Thompson. There may be some opportunities for short-term payments for farmers who are already using no-till.
The bottom line, though, Thompson said is “do not let carbon markets drive your decision; the payments are not large enough yet to be more than a supplementary income source.”
David Murray can be reached at [email protected].
