Carbon Market Standardization Bill Advances in Congress, But Will It Help Fight Climate Change?

July 1, 2021

A bipartisan bill seeking to lay the foundation for carbon market participation has advanced through the U.S. Senate, but new research indicates that getting farmers to participate in the voluntary program may be difficult.

The Growing Climate Solutions Act, introduced by Sen. Mike Braun of Indiana and Sen. Debbie Stabenow of Michigan, passed the Senate by a vote of 92 to 8.

The bill seeks to standardize the verification process for carbon markets, and create a clearinghouse that would make participation easier for farmers, ranchers and foresters.

Carbon markets basically allow companies to pay others to reduce greenhouse gas emissions for them.

Companies can buy certificates called carbon credits that are promises that a specific amount of carbon dioxide will be stored in the ground and kept from entering the atmosphere. The process, called carbon sequestration, is accomplished by undertaking certain farming practices like no-till farming or planting cover crops for years.

Currently, farmers can participate in several independent carbon markets farmers, but all have their own rules and verification processes.

The Growing Climate Solutions Act would make the U.S. Department of Agriculture the main agency in charge of certifying both the third-party verifiers who assess the amount of carbon stored or emissions reduced and the technical assistance providers who can help farmers design and implement projects that can produce a tradable carbon credit.

“Farmers have always led the way on protecting our environment, and the Growing Climate Solutions Act helps them get paid for their sustainable practices through voluntary carbon credit markets,” said Braun. “Hoosiers and Americans want real-world solutions, and Growing Climate Solutions is a bipartisan, common-sense, pro-jobs win that farmers, industry leaders and conservationists can all support – all without growing our government or our deficit.”

Sen. Mike Braun

The bill is supported by more than 175 organizations and agricultural business interests and progresses at a time when Americans are feeling the dangerous effects of climate change.

A deadly heatwave in the Pacific Northwest that melted power cables and caused roads to buckle has been linked to hundreds of deaths in Oregon, Washington and western Canada.

Wildfires are ravaging California, Arizona and the entire western part of the country as far as Texas and the Dakotas, save for empty desert where there is literally nothing to burn.

Drought is spreading across the upper Midwest just a few weeks after historic flooding fell in Indiana and Michigan. Bloomington, Indiana experienced the largest rainfall event in over 100 years in mid-June, with 6 inches of rain falling over eight hours. Officials in Detroit said climate change caused the city to receive two months of rain, more than 6 inches, in just five hours.

The bill’s authors said the legislation would help more people take on the climate crisis.

“Addressing the climate crisis is one of the most urgent challenges we face, and our farmers and foresters are an important part of the solution,” said Stabenow, chair of the U.S. Senate Committee on Agriculture, Nutrition and Forestry. “The bipartisan Growing Climate Solutions Act is a win-win for farmers, our economy and for our environment. Our bill is a perfect example of how we can work across the aisle and find common ground to address a critical issue affecting all of us and our future.”

Sen. Debbie Stabenow

Carbon sequestration through natural means, like farming, or through manual means, like injecting liquified carbon dioxide into the ground, has been touted as a politically acceptable way to reduce the amount of carbon dioxide that enters the atmosphere.

Carbon sequestration allows companies and government entities, through offsets, to achieve net zero emissions, meaning the companies achieve a balance between greenhouse gases produced and the amount prevented from reaching the atmosphere.

Critics said that the method is popular because it allows polluting industries to continue emitting the greenhouse gases that drive climate change, diminishing the sense of urgency to curb emissions now.

“We have arrived at the painful realization that the idea of net zero has licensed a recklessly cavalier ‘burn now, pay later’ approach which has seen carbon emissions continue to soar,” a trio of British climate scientists wrote in a treatise calling net zero a “dangerous trap” for humanity. “It has also hastened the destruction of the natural world by increasing deforestation today and greatly increases the risk of further devastation in the future.”

Braun’s bill encourages carbon sequestration without discouraging greenhouse gas emissions.

Researchers at Purdue University found that even with full participation across the country, all U.S. cropland could sequester only a small portion of U.S. greenhouse gas emissions through change in tilling techniques.

“If we put all U.S. cropland acres into no-till, how much carbon could we sequester then?” said Nathan Thompson, associate professor of agricultural economics at Purdue. “That would be about 123 million metric tons of carbon a year. And putting that on a different scale, U.S. carbon emissions, that's about 2% of total U.S. carbon emissions from all sectors. And, so, you can see that while there is a positive impact that can be had, we need to be a little more realistic about what the role of agriculture can be in the broader kind of climate change discussion as it relates to carbon sequestration.”

Currently, half of all U.S. farmers already practice no-till or other forms of conservation tillage, according to the USDA.

Greater gains could be made by getting more farmers to plant cover crops. Only about 4% of U.S. cropland acres are planted in cover crops, but if all farmers adopted the practice, 147 million metric tons of carbon dioxide equivalent, or 3% of all U.S. greenhouse gas emissions in a year, could be sequestered.

Surveys conducted by Purdue’s Center for Commercial Agriculture point to carbon market participation being much less than full under current programs.

Between February and April, researchers for Purdue’s Ag Economy Barometer asked 1,200 farmers across the nation about carbon markets, and found a large majority were not aware carbon sequestration opportunities existed.

The survey found that only 39% of farmers were aware they could get paid to capture carbon.

Of all farmers surveyed, only 16 farmers had signed a contract to capture carbon on their farm and 85 were in discussions to enter into carbon capture programs.

Private carbon markets currently pay between $10 to $20 per metric ton of carbon sequestered. Every acre of farm land is estimated to sequester between half and one metric ton per acre.

The average farm size in Indiana is 264 acres, meaning farmers can currently earn between $2,640 and $5,280 for farming in a climate-friendly way.

A large majority of farmers surveyed, 64%, said that amount is not enough to justify the commitment.

A 2018 survey found that Indiana farmers would have to be offered $40 an acre in order to get them to switch to no-till farming.

“With current commodity prices, you know, we're looking at corn revenue at $800, easily $1,000 an acre. So, $10, $20 is just a really small number when you think about the broader scheme of the farm economy. And, so, I think that's something that these companies are going to have to wrestle with,” Thompson said.

Farmers also said the potential legal liability of carbon market contracts, which could last a decade or more, have made them think twice about taking part. Other farmers expressed skepticism about the viability of carbon sequestration.

Another major issue to overcome in order to maximize farmer participation in carbon markets is solving the issue of additionality, or whether farmers will get paid for climate-friendly practices they are already practicing or whether only newly practicing farmers will get compensated.

Despite the challenges present to getting farmers to participate in carbon markets, researchers believe the Growing Climate Solutions Act is a positive first step to making participation viable.

“This is an effort, basically, to give the USDA the ability to standardize and verify carbon markets, and, in my own personal opinion, that would be a huge step forward in terms of adding some legitimacy to these and some longevity to these types of markets,” said Carson Reeling, associate professor of agricultural economics at Purdue. “Every company has a different way of measuring these things, and if there was some standardization of this procedure that might be attained under a bill like this, that would go a long way in giving the people who are buying these permits the confidence that they are getting a high quality permit or offset in exchange for their money.”

The bill now heads to the U.S. House of Representatives for consideration.

Carbon Market Standardization Bill Advances in Congress, But Will It Help Fight Climate Change?