A bill making its way through the Indiana Legislature could soon help farmers and foresters make money from the lands that have fed man and beast for countless generations while helping reduce climate change.
Senate Bill 373, which establishes a carbon market registration program that facilitates carbon market trading in the state, was approved by the Indiana Senate and now heads to the Indiana House of Representatives for consideration.
“Indiana has approximately 5 million acres of forest land and has many, many millions of acres of farm land that can be used for sequestration of carbon dioxide in the atmosphere,” said Sen. Susan Glick, one of the bill’s authors before the Senate vote. “This is an opportunity for us to establish a program that would allow the farmers and the forest owners to have a financial benefit for the creation of these carbon offset or carbon credit programs.”
Carbon dioxide is a greenhouse gas that traps heat in the atmosphere, making the planet warmer and changing its climate. Sequestration involves storing the gas underground and thus removing it from the atmosphere.
Major corporations like Amazon, Microsoft, Apple and Unilever have announced their intentions to become carbon neutral, or basically pledge to offset the amount of carbon dioxide or carbon dioxide equivalents they emit by undertaking other actions that reduce carbon dioxide elsewhere.
One of the easiest ways companies can do that is by buying carbon credits, a certificate worth a ton of carbon dioxide emissions, in a carbon market. A carbon market acquires those carbon credits from farmers and foresters who make a deal with the market to adopt certain climate-friendly farming methods in order to maintain the carbon capturing potential of the land.
Carbon offset trading is becoming a lucrative business, both for the farmers providing the carbon credits and the markets selling them. Even fossil fuel giants like BP and Shell have decided to invest in the multi-billion-dollar carbon trading business as their former cash cow, oil, has been providing diminishing returns.
SB 373 seeks to help farmers and foresters enter the carbon market and to address one of the main criticisms of carbon trading — whether carbon credits really offset the amount of carbon dioxide they promise to.
“Think in terms of a clearinghouse whereby certified verifiers would go out and inspect forested lands and also farm grounds to establish whether or not they have carbon offset properties. They would be certified and those people would be listed on a website for those individuals to go to and enter into carbon contracts,” said Glick. “Basically, to have the verifiers go out, look at their ground and their forests, and establish whether or not they have benefit.”
The bill would establish a “Climate-Friendly Farming and Forestry Registration Program” to register the technical advisers teaching farmers about climate-friendly farming practices and the verifiers who measure the carbon sequestration potential of land.
Currently, there is no standard for carbon offset project validation, although some businesses have created their own standards that have been adopted by states like California.
If the bill eventually becomes law, it could open a new revenue stream for Indiana’s embattled farmers, who have had extremely productive years but shrinking markets due to federal policy shifts.
In the past decade, the state has reported corn harvests of less than 5 million acres only once, with a dip occurring in 2019, when heavy spring rain forced weeks of delay in planting.
Soybean crops have also fared well over the decade, with production falling in 2012 and 2013, when summer dry spells damaged soybean crops.
But despite the production, according to the U.S. Department of Agriculture’s Economic Research Service the value of feed crop production in Indiana has fallen by 28% since 2012, outpacing the 21% crop production value loss for the entire U.S. in that same time period.
The USDA also forecasts that farmers are more likely to be in debt this year. The Federal Reserve Bank of Kansas City said small dairy farms and smaller corn and soybean growers could be especially at risk for bankruptcies.
The added income that verified carbon credits could bring Indiana’s growing small farm population could help them survive and thrive.
“The landowners would be able to be listed on [a state] website, and people who are seeking carbon neutrality, that would be multinational corporations or corporations within the state of Indiana or other states in the Union who want to be carbon neutral, could enter into contracts,” said Glick. “Those contracts can achieve almost $6,000 a year per acre in some areas and in some grounds.”
The bill is sponsored in the House by Rep. Donald Lehe and Rep. David Abbott.