Agriculture, Climate Change                                                 and Carbon Sequestration    A Publication of A...
change and irrigation and water manage-                     habitable. Increased levels of greenhouse                     ...
How does climate change                                will likely extend forage production                               ...
from agriculture account for 8 percent                          Greenhouse gases have varying global                      ...
Figure 3. Agricultural greenhouse gas emissions, average from 2001 to 2005. Source: EPA, 2007Inventory report, April 2007....
Figure 4. Carbon pools in forestry and agriculture. Source: EPA.       Atmosphe...
fuel consumption, reduced compaction,            Irrigation and waterincreased planting and harvesting flexibility,reduced ...
Biofuels                                        individual farmer and rancher, as well as                                 ...
Benefits of a carbon tax for                     than the net benefits of an inflexible cap”                                 ...
emit greenhouse gases are issued emission         purchase offsets from groups more capable of                         per...
A limited, privately created and voluntary      Figure 6. Conservation tillage soil offset map. Source: Chicago Climatecap-...
a farmer already engaged in conservation             mitigate greenhouse gas emissions is one                          til...
In the future, conservation programs could        Paustian et al. (2006) estimated that it wouldbe refocused to lower gree...
References                                                           Intergovernmental Panel on Climate Change            ...
Environmental Protection Agency Global Warming            Agriculture and Climate Change: Greenhouse Gas       Impacts on ...
• A signed contract between the landowner and Eligible land and credit-earning potential                                  ...
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Agriculture, Climate Change and Carbon Sequestration - IP338

  1. 1. Agriculture, Climate Change and Carbon Sequestration A Publication of ATTRA—National Sustainable Agriculture Information Service • 1-800-346-9140 • www.attra.ncat.orgBy Jeff Schahczenski Carbon sequestration and reductions in greenhouse gas emissions can occur through a variety ofand Holly Hill agriculture practices. This publication provides an overview of the relationship between agriculture,NCAT Program climate change and carbon sequestration. It also investigates possible options for farmers and ranchersSpecialists to have a positive impact on the changing climate and presents opportunities for becoming involved© 2009 NCAT in the emerging carbon market. Table of ContentsIntroduction............................1Climate change science......2How does climate changeinfluence agriculture? .........3How does agricultureinfluence climatechange? ....................................3Agriculture’s rolein mitigating climatechange ......................................6The value of soil carbon:Potential benefits foragriculture ...............................8Charge systems:Carbon tax ...............................8Cap and trade: A privatemarket for greenhousegas emissions .........................9Subsidizing positivebehavior .................................12Summary ................................13References .............................14Resources ...............................14Appendix:How to get involvedin voluntary privatecarbon markets....................15 An organic wheat grass field. Growing research is showing that organic production systems are one of the most climate-friendly systems of food production. Introduction • lengthen the growing season in regions with relatively cool spring The Earth’s average surface temperature and fall seasons; increased 1.3 degrees Fahrenheit over the • adversely affect crops in regionsATTRA—National Sustainable past century, and is projected by the Inter-Agriculture Information Service where summer heat already limits( is managed governmental Panel on Climate Change to production;by the National Center for Appro- increase by an additional 3.2 to 7.2 degreespriate Technology (NCAT) and isfunded under a grant from the over the 21st century (IPCC, 2007a). These • increase soil evaporation rates; andUnited States Department ofAgriculture’s Rural Business- seemingly slight changes in temperature • increase the chances of severeCooperative Service. Visit the could have profound implications for farm- droughts (2008a).NCAT Web site ( for ers and ranchers. According to the Envi- Innovative farming practices such as conser-more information on ronmental Protection Agency, an increase vation tillage, organic production, improvedour sustainable agri-culture projects. in average temperature can: cropping systems, land restoration, land use
  2. 2. change and irrigation and water manage- habitable. Increased levels of greenhouse ment, are ways that farmers can address gases enhance the naturally occurring climate change. Good management prac- greenhouse effect by trapping even more of tices have multiple benefits that may also the sun’s heat, resulting in a global warm- enhance profitability, improve farm energy ing effect. Figure 1 illustrates the natural efficiency and boost air and soil quality. and enhanced greenhouse effects (Pew Cen- ter on Global Climate Change, 2008). Climate change science The primary greenhouse gases associated Natural shifts in global temperatures have with agriculture are carbon dioxide (CO2), occurred throughout human history. The methane (CH4 ) and nitrous oxide (N20).Related ATTRA Although carbon dioxide is the most prev-Publications 20th century, however, has seen a rapid rise in global temperatures. Scientists attribute alent greenhouse gas in the atmosphere,Conservation Tillage the temp increase to a rise in carbon diox- nitrous oxide and methane have longer ide and other greenhouse gases released durations in the atmosphere and absorbPursuing ConservationTillage Systems from the burning of fossil fuels, deforesta- more long-wave radiation. Therefore, smallfor Organic Crop tion, agriculture and other industrial pro- quantities of methane and nitrous oxide canProduction cesses. Scientists refer to this phenomenon have significant effects on climate change. as the enhanced greenhouse effect. Several excellent resources and fact sheetsEnergy Saving Tipsfor Irrigators The naturally occurring greenhouse effect explain the greenhouse effect and theAnaerobic Digestion traps the heat of the sun before it can science behind climate change. See theof Animal Wastes: be released back into space. This allows Resources section for information on howFactors to Consider the Earth’s surface to remain warm and to obtain copies.Biodiesel:The SustainabilityDimensions Figure 1. The Greenhouse Effect Source: The National Academy of Sciences. Opportunitiesand Questions Natural Greenhouse Effect Enhanced Greenhouse Effect The greenhouse effect is a natural warm- Increasing the amount of greenhouse gasesRenewable Energy ing process. Carbon dioxide (CO2) and cer- intensifies the greenhouse effect. This sideOpportunities on tain other gases are always present in the of the globe simulates conditions today,the Farm atmosphere. These gases create a warm- roughly two centuries after the IndustrialFederal Resources for ing effect that has some similarity to the Revolution began. warming inside a greenhouse, hence theSustainable Farming name “greenhouse effect.”and Ranching Illustration of the greenhouse effect (courtesy of the Marion Koshland Science Museum of the National Academy of Sciences). Visible sunlight passes through the atmosphere without being absorbed. Some of the sunlight striking the earth (1) is absorbed and converted to heat, which warms the surface. The surface (2) emits infrared radiation to the atmosphere, where some of it (3) is absorbed by greenhouse gases and (4) re-emitted toward the surface; some of the heat is not trapped by greenhouse gases and (5) escapes into space. Human activities that emit additional green- house gases to the atmosphere (6) increase the amount of infrared radiation that gets absorbed before escaping into space, thus enhancing the greenhouse effect and amplifying the warming of the earth.Page 2 ATTRA Agriculture, Climate Change and Carbon Sequestration
  3. 3. How does climate change will likely extend forage production into late fall and early spring.influence agriculture? • Climate change-induced shifts inClimate change may have beneficial as well plant species are already under wayas detrimental consequences for agricul- in rangelands. The establishmentture. Some research indicates that warmer of perennial herbaceous species istemperatures lengthen growing seasons and reducing soil water availability earlyincreased carbon dioxide in the air results in the growing higher yields from some crops. A warm-ing climate and decreasing soil moisture can • Higher temperatures will very likelyalso result in production patterns shifting reduce livestock production duringnorthward and an increasing need for irri- the summer season, but these lossesgation. Changes, however, will likely vary will be partially offset by warmersignificantly by region. Geography will play temperatures during the wintera large role in how agriculture might benefit season (Backlund et al., 2008).from climate change. While projections lookfavorable for some areas, the potential of How does agricultureincreased climate variability and extremes C influence climate change? onserva-are not necessarily considered. Benefits to tion tillage,agriculture might be offset by an increased Agriculture’s contribution to organiclikelihood of heat waves, drought, severethunderstorms and tornadoes. An increase greenhouse gas emissions production, coverin climate variability makes adaptation dif- Agriculture activities serve as both sources cropping and cropficult for farmers. and sinks for greenhouse gases. Agriculture rotations can dras- sinks of greenhouse gases are reservoirs ofThe U.S. Department of Agriculture carbon that have been removed from the tically increase thereleased a report in May 2008 that focused atmosphere through the process of biologi- amount of carbonon the effects of climate on agriculture, cal carbon sequestration. stored in soils.specifically on cropping systems, pastureand grazing lands and animal management The primary sources of greenhouse gases in(Backlund et al., 2008). The following find- agriculture are the production of nitrogen-ings are excerpted from the report: based fertilizers; the combustion of fossil fuels such as coal, gasoline, diesel fuel and natural • With increased carbon dioxide and gas; and waste management. Livestock enteric higher temperatures, the life cycle fermentation, or the fermentation that takes of grain and oilseed crops will likely place in the digestive systems of ruminant progress more rapidly. animals, results in methane emissions. • The marketable yield of many hor- Carbon dioxide is removed from the atmo- ticultural crops, such as tomatoes, sphere and converted to organic carbon onions and fruits, is very likely to through the process of photosynthesis. As be more sensitive to climate change organic carbon decomposes, it is converted than grain and oilseed crops. back to carbon dioxide through the process • Climate change is likely to lead to a of respiration. Conservation tillage, organic northern migration of weeds. Many production, cover cropping and crop rota- weeds respond more positively to tions can drastically increase the amount of increasing carbon dioxide than most carbon stored in soils. cash crops. In 2005, agriculture accounted for from • Disease pressure on crops and domes- 10 to 12 percent of total global human- tic animals will likely increase with caused emissions of greenhouse gases, earlier springs and warmer winters. according the Intergovernmental Panel on • Projected increases in temperature and Climate Change (IPCC, 2007b). In the a lengthening of the growing season United States, greenhouse gas ATTRA Page 3
  4. 4. from agriculture account for 8 percent Greenhouse gases have varying global of all emissions and have increased warming potentials, therefore climate since 1990 (Congressional Research scientists use carbon dioxide equivalents Service, 2008). Figure 2 presents recent to calculate a universal measurement of data in carbon dioxide equivalents (CO2e). greenhouse gas emissions.Figure 2. Greenhouse gas emissions and carbon sinks in agricultural activities, 1990-2005 (CO2 equivalent). Avg. 1990 1995 2000 2005 Source 2001-2005 million metric tons CO2 equivalent (MMTCO2-Eq)U.S. Agricultural ActivitiesGHG Emissions (CH4 and N2O)Agriculture Soil Managementa 366.9 353.4 376.8 365.1 370.9Enteric Fermentationb 115.7 120.6 113.5 112.1 115.0Manure management 39.5 44.1 48.3 50.8 45.6Rice Cultivation 7.1 7.6 7.5 6.9 7.4Agricultural Residue Burning 1.1 1.1 1.3 1.4 1.2Subtotal 530.3 526.8 547.4 536.3 540.1Carbon SinksAgricultural Soils (33.9) (30.1) (29.3) (32.4) (31.7)Other na na na na naSubtotal (33.9) (30.1) (29.3) (32.4) (31.7)Net Emissions, Agriculture 496.4 496.7 518.1 503.9 508.4Attributable CO2 emissions: c 46.8 57.3 50.9 45.5 52.6Fossil fuel/mobile combustion% All Emissions, Agricultured 8.5% 8.0% 7.7% 7.4% 8.0%% Total Sinks, Agriculture 4.8% 3.6% 3.9% 3.9% 4.0%% Total Emissions, Forestry 0.2% 0.2% 0.2% 0.3% 0.3%% Total Sinks, Forestrye 94.3% 92.0% 94.8% 94.7% 95.0%Total GHG Emissions, All Sectors 6,242.0 6,571.0 7,147.2 7,260.4 6,787.1Total Carbon SInks, All Sectors (712.8) (828.8) (756.7) (828.5) (801.0)Net Emissions, All Sectors 5,529.2 5,742.2 6,390.5 6,431.9 5,986.1 Source: EPA, Inventory of U.S. Grenhouse Gas Emissions and Sinks: 1990-2005, April 2007, [ usinventoryreport.html]. Table ES-2, Table 2-13, Table 6-1, Table 7-1, and Table 7-3. EPA data are reported i teragrams (tg.), which are equivalent to one million metric tons each. a. N2O emissions from soil management and nutrient/chemical applications on croplands. b. CH4 emissions from ruminant livestock. c. Emissions from fossil fuel/mobile combustion associated with energy use in the U.S. agriculture sector (excluded from EPA’s reported GHG emissions for agricultural activities). d. Does not include attributable CO2 emissions from fossil fuel/mobile combustion. e. Change in forest stocks and carbon uptake from urban trees and landfilled yard trimmings.Page 4 ATTRA Agriculture, Climate Change and Carbon Sequestration
  5. 5. Figure 3. Agricultural greenhouse gas emissions, average from 2001 to 2005. Source: EPA, 2007Inventory report, April 2007. 2. 1. f 1. 3. 4. 2. r b5. 3. management 4. management 5. c 6. 6. s managementFigure 3 illustrates agricultural greenhouse gas Carbon sequestrationemissions by source in the United States. Carbon sequestration in the agriculture sec-The following is evident from the informa- tor refers to the capacity of agriculture landstion in Figures 2 and 3: and forests to remove carbon dioxide from the atmosphere. Carbon dioxide is absorbed • Despite some improvement in by trees, plants and crops through photo- certain areas since 1990, the synthesis and stored as carbon in biomass U.S. agricultural production sec- in tree trunks, branches, foliage and roots tor increased its greenhouse gas and soils (EPA, 2008b). Forests and stable emissions and expanded its role in grasslands are referred to as carbon sinks climate change. because they can store large amounts of • The U.S. agricultural production carbon in their vegetation and root systems sector is a net emitter of green- for long periods of time. Soils are the larg- house gas emissions. That is, est terrestrial sink for carbon on the planet. agricultural production annually The ability of agriculture lands to store or creates more greenhouse gas emis- sequester carbon depends on several fac- sions than it captures, despite the tors, including climate, soil type, type of potential for the sector to seques- crop or vegetation cover and management ter higher levels of carbon with practices. management changes. The amount of carbon stored in soil organic • The U.S. agricultural production matter is influenced by the addition of car- sector contributes more greenhouse bon from dead plant material and carbon gas emissions from methane (CH4) losses from respiration, the decomposition and nitrous oxide (N2O) than from process and both natural and human dis- carbon dioxide (CO2). turbance of the soil. By employing farming practices that involve minimal disturbance • Agricultural soil management is of the soil and encourage carbon sequestra- the single greatest contributor to tion, farmers may be able to slow or even greenhouse gas emissions from the reverse the loss of carbon from their fields. U.S agricultural production sector. In the United States, forest and croplands Enteric fermentation (f latulence currently sequester the equivalent of 12 and belches of ruminants) and percent of U.S. carbon dioxide emissions manure management are also large from the energy, transportation and indus- contributors. trial sectors (EPA, 2008b) ATTRA Page 5
  6. 6. Figure 4. Carbon pools in forestry and agriculture. Source: EPA. Atmospheric carbon is fixed by trees and Carbon is lost back to the atmosphere other vegetation through photosynthesis. through respiration and decompositon of organic matter. Aboveground carbon: • Stem • Branches • Foliage Fallen leaves and branches add carbon to soils. Carbon is lost to the Some carbon is internally atmosphere through transferred from aboveground soil respiration. to belowground carbon soils. Belowground carbon: • Roots Soil carbon: • Litter • Organic Some carbon is transferred from • Inorganic belowground carbon (for example, root mortality) to the soils. Figure 4, adapted from the EPA, illustrates Conservation tillage and the different processes through which trees cover crops and soils can gain and lose carbon. Conservation tillage refers to a number of strategies and techniques for establish- Agriculture’s role in ing crops in the residue of previous crops, mitigating climate change which are purposely left on the soil surface. Reducing tillage reduces soil disturbance Several farming practices and technolo- and helps mitigate the release of soil car- gies can reduce greenhouse gas emissions bon into the atmosphere. Conservation till- and prevent climate change by enhancing age also improves the carbon sequestration carbon storage in soils; preserving existing capacity of the soil. Additional benefits of soil carbon; and reducing carbon dioxide, conservation tillage include improved water methane and nitrous oxide emissions. conservation, reduced soil erosion, reducedPage 6 ATTRA Agriculture, Climate Change and Carbon Sequestration
  7. 7. fuel consumption, reduced compaction, Irrigation and waterincreased planting and harvesting flexibility,reduced labor requirements and improved managementsoil tilth. For further information, see the Improvements in water use efficiency,ATTRA publication Conservation Tillage. through measures such as irrigation system mechanical improvements coupled with aImproved cropping and reduction in operating hours; drip irriga-organic systems tion technologies; and center-pivot irriga- tion systems, can significantly reduce theRecent reports have investigated the potential amount of water and nitrogen applied toof organic agriculture to reduce greenhousegas emissions (Rodale Institute, 2008). the cropping system. This reduces green-Organic systems of production increase soil house emissions of nitrous oxide and waterorganic matter levels through the use of com- withdrawals. For more information, see theposted animal manures and cover crops. ATTRA publication Energy Saving TipsOrganic cropping systems also eliminate the for Irrigators.emissions from the production and transpor-tation of synthetic fertilizers. Components of Nitrogen use efficiency Corganic agriculture could be implemented onservationwith other sustainable farming systems, Improving fertilizer efficiency through farmingsuch as conservation tillage, to further practices like precision farming using GPS practicesincrease climate change mitigation poten- tracking can reduce nitrous oxide emis- that conservetial. See the ATTRA publication Pursuing sions. Other strategies include the use of cover crops and manures (both green and moisture, improveConservation Tillage Systems for Organic CropProduction for more information. animal); nitrogen-fixing crop rotations; yield potential and composting and compost teas; and inte- reduce erosionGenerally, conservation farming prac-tices that conserve moisture, improve yield grated pest management. The ATTRA Farm and fuel costs alsopotential and reduce erosion and fuel costs Energy Web site contains information about increase soil carbon.also increase soil carbon. Examples of prac- reducing nitrogen fertilizer on the farm attices that reduce carbon dioxide emissions the following link: increase soil carbon include direct energy/nitrogen.html.seeding, field windbreaks, rotational graz-ing, perennial forage crops, reduced sum- Methane capturemer fallow and proper straw management(Alberta Agriculture and Rural Develop- Large emissions of methane and nitrousment, 2000). Using higher-yielding crops oxide are attributable to livestock wasteor varieties and maximizing yield potential treatment, especially in dairies. Agriculturecan also increase soil carbon. methane collection and combustion systems include covered lagoons and complete mixLand restoration and and plug flow digesters. Anaerobic digestion converts animal waste to energy by captur-land use changes ing methane and preventing it from beingLand restoration and land use changes released into the atmosphere. The capturedthat encourage the conservation and methane can be used to fuel a variety ofimprovement of soil, water and air qual- on-farm applications, as well as to gener-ity typically reduce greenhouse gas emis-sions. Modifications to grazing practices, ate electricity. Additional benefits includesuch as implementing sustainable stocking reducing odors from livestock manurerates, rotational grazing and seasonal use and reducing labor costs associated withof rangeland, can lead to greenhouse gas manure removal. For more information onreductions. Converting marginal cropland anaerobic digestion, see the ATTRA publi-to trees or grass maximizes carbon storage cation Anaerobic Digestion of Animal Wastes:on land that is less suitable for crops. Factors to ATTRA Page 7
  8. 8. Biofuels individual farmer and rancher, as well as society at large, is the heart of understand- There is significant scientific controversy ing the role agriculture can play in carbon regarding whether biofuels — particularly sequestration and climate stabilization. those derived from oilseeds (biodiesel), feed corn (ethanol) or even from cellulosic The two most frequently discussed systems sources — are carbon neutral. To ascer- to create value for offsetting greenhouse gas tain the true climate neutrality of biofuels emissions are known as carbon taxation and requires a careful life-cycle analysis of the cap and trade. Government subsidies are dis- specific biofuel under consideration. Also, cussed less often, but will also play a role in an analysis is needed to understand what greenhouse gas emission reductions. the global land use change implications will be if farmers grow more of a specific biofuel Charge systems: Carbon tax feedstock. For further information on biofu- By taxing every ton of carbon in fossil fuels els, see the ATTRA publications Biodiesel: or every ton of greenhouse gas companies The Sustainability Dimensions and Ethanol emit, entities that emit greenhouse gases or Opportunities and Questions. use carbon-based fuels will have an incen- tive to switch to alternative renewable fuels,C“ reating farm and forestry Other renewable energy options invest in technology changes to use carbon- systems with Renewable energy opportunities such as based fuels more efficiently and in general wind and solar also present significant adopt practices that would lower their level ofstrong incentives for opportunities for the agriculture sector to greenhouse gas emissions. Thus a carbon orgrowing soil carbon reduce greenhouse gas emissions. For fur- greenhouse gas emission tax values carboncould well be at the ther information about these options, see in negative terms of tax avoidance. Thosecenter of climate the ATTRA publication Renewable Energy farms and ranches that emit or use less car-stabilization.” Opportunities on the Farm. bon-intensive fuels pay a smaller tax.(Mazza, 2007) From the perspective of farmers and ranch- The value of soil carbon: ers, a carbon tax would increase the direct Potential benefits for and indirect costs of agricultural production. agriculture Farmers and ranchers use carbon-based fuels directly in the forms of petroleum and As Mazza (2007) has remarked, “creating natural gas and indirectly in the forms of farm and forestry systems with strong incen- carbon-based fertilizers and pesticides and tives for growing soil carbon could well be fuel-intensive inputs. Thus, a carbon tax at the center of climate stabilization.” could move farmers and ranchers to shift to Thus, a new crop that farmers and ranchers systems of production that either eliminate may grow in the future is carbon. The Natural the use of fossil fuels and inputs or at least Resources Conservation Service, part of the improve the efficiency of their use. USDA, has long been a promoter of managing However, proponents of carbon taxes have carbon in efforts to improve soil quality. generally sought to exclude the agriculture As with any crop, farmers and ranchers sector from such taxation. For the most need a market for this new crop, as well part, carbon tax proponents have been as a price that will make it more profit- more interested in placing greenhouse gas able to grow. From a broader social con- emission taxes on upstream producers of text, the questions of who will purchase the original source products. This includes this new crop and what is a fair price are coal, petroleum and natural gas produc- also of private and public importance. Vol- ers and major emitters such as large elec- untary private carbon markets exist in the tric utilities. Nonetheless, as people work United States. Federal government markets to reduce greenhouse gas emissions, the are expected to be created soon. How to potential to place a carbon tax on sectors value carbon from the perspective of the like agriculture may become more likely.Page 8 ATTRA Agriculture, Climate Change and Carbon Sequestration
  9. 9. Benefits of a carbon tax for than the net benefits of an inflexible cap” (Congressional Budget Office, 2008).farmers and ranchersA major benefit of a carbon or greenhousegas emission tax would be the creation of a Downside of a carbon taxstream of tax revenue that the government The introduction of any tax results in dis-could use to further induce the practice cussions of where the burden of taxationand technology changes necessary to lower lies and issues of equity. In short, taxationgreenhouse gas emissions. For example, is about who pays and who does not. Newmany of the current agriculture conserva- taxes also often result in a public discus-tion programs, such as the Environmental sion of the fairness of the tax. There is logicQuality Incentive Program and the newer to the argument that the burden of a car-Conservation Stewardship Program, sup- bon or greenhouse gas emission tax shouldport improvements in soil quality and could be placed fi rst and foremost on those whobe funded in part from emission or carbon either create carbon-intensive fuels or thosetaxes, thereby providing a revenue source who are the largest emitters of greenhouseto subsidize those who adopt or maintain gases. The greatest source of greenhouseemission-reduction practices or carbon gas emissions in the United States is the A tax provides combustion of fossil fuels. Since agriculturesequestration activities. See the ATTRA a clear and uses a small percentage of U.S. fossil fuels,publication Federal Resources for Sustain- an argument can be made that the burden stable costable Farming and Ranching for more infor- of taxation should not to fall on this sector. to current practices.mation. Tax revenues could also assist in Still, agriculture is heavily dependent onthe support of conservation programs like fossil fuels and any carbon or greenhousethe Conservation Reserve Program, which gas emission tax would likely be to keep sensitive and highly erodiblelands out of production since these lands The ability of any individual farmer orsequester soil carbon. rancher to pass on the increased costs of fossil fuels that this kind of taxation wouldAnother benefit of this approach is that a create is much more limited than in othertax provides a clear and stable cost to cur- sectors of the economy. For instance, if arent practices. A tax also makes it easier carbon tax is placed on diesel fuel, dieselto determine changes that will be more fuel manufacturers can more easily pass onprofitable in a new cost environment. For the tax burden to the consumers of the die-instance, if a concentrated animal feeding sel. The ability to pass on costs to consum-operation understood the cost of their emis- ers is greater in industries where there issions as expressed by their emission tax, it little product substitution and where a fewwould be easier for the operation to deter- producers dominate the market. This is notmine alternatives to current practices that the case for farmers and ranchers, givenwould be cost efficient. At a high enough tax their relative lack of market concentrationrate, installing methane digesters to lower and power.greenhouse gas emission would becomeeconomically feasible. Cap and trade: A private marketFinally, it has been argued that a carbon for greenhouse gas emissionstax approach is cost effective in imple-mentation, at least when compared to the A government-sponsored cap-and-trade sys-cap-and-trade method of achieving green- tem would create a new market for green- house gas emissions by creating a new prop-house gas emissions reductions. As recent erty right — the right to emit.Congressional Budget Office report states:“available research suggests that in the near The market is created by a governmentterm, the net benefits (benefits minus costs) that sets a limit or cap on total greenhouseof a tax could be roughly five times greater gas emissions allowed. Companies ATTRA Page 9
  10. 10. emit greenhouse gases are issued emission purchase offsets from groups more capable of permits that allow a certain amount of emis- reducing emissions. sions. Companies and groups that exceed their allowed emissions must purchase off- Benefits for farmers and sets from other entities that pollute less than their allowance or from entities that seques- ranchers ter carbon. Depending on the practices adopted, farmers and ranchers could be a source These exchangeable emission permits, often of inexpensive carbon reduction and cap- called allowances, are measured in tons of ture the value of these allowances as off- carbon dioxide equivalents per year. Carbon sets. In short, the value of offsets would dioxide equivalents provide a common mea- become the market price of carbon equiva- sure for all greenhouse gas emissions and are calculated by converting greenhouse gases lents. This would become the value of the into carbon dioxide equivalents according to new crop — carbon — that farmers and their global warming potential. ranchers could grow. Over time, the government will continu- From the May 26, 2008 issue of High ally lower the total level of allowances to Country News: meet an established level of acceptable For example, if a farmer shifted to an organic system of production, measurable total emissions. As the supply of allow- improvements in the ability of the farmer to ances decreases, the value of the allow- sequester carbon could be verified and the ances will rise or fall depending on demand farmer could sell this sequestered carbon at and on the ability of emitters to make nec- the current carbon market price set in the essary changes to reduce emissions or new emissions market (Ogburn, 2008).Figure 5. Chicago Climate Exchange daily report. Source: Chicago Climate Exchange. www.chicagoclimateexchange.comPage 10 ATTRA Agriculture, Climate Change and Carbon Sequestration
  11. 11. A limited, privately created and voluntary Figure 6. Conservation tillage soil offset map. Source: Chicago Climatecap-and-trade system called the Chicago Exchange. www.chicagoclimateexchange.comClimate Exchange (CCX) has been in oper-ation in the United States since 2003. Theemission cap is set by emitting entities thatvoluntarily sought to limit greenhouse gasemissions. Purchases of agriculture off-sets have been part of this exchange. Ascan be seen from Figure 5, the price of car-bon dioxide equivalents per ton has variedsignificantly over the life of the exchangeand hit its highest level in 2008 at $7.35per ton. This price has not yet resulted inan overwhelming participation by farmersand ranchers.Downsides of cap and tradeFor farmers and ranchers to provide carbonoffsets for greenhouse gas emitters, farmersand ranchers must be willing to make long-term, or even permanent, changes in notonly practices but perhaps whole systems doubtful that the actual carbon storage levelsof production. These changes also need to allocated can be achieved across areas thatprovide verifiable changes that result in true are so large. Finally, the CCX does notoffsets of greenhouse gas emissions. The verify the actual carbon storage as a resultissues of verifiability, permanence and what of the practice change, but only monitorsis known as additionality are critical to the that the practice is maintained during thesuccess of agriculture’s role in the cap-and- life of the contract. Thus, it is doubtful thetrade system and the ultimate reduction of carbon offset truly matches actual carbongreenhouse gas emissions. sequestered.Verifiability is critical because the system The issue of permanence is also critical.or practice change must result in a measur- What happens after a farmer or rancherable change in the amount of carbon stored. changes to a practice or system of produc-For example, the adoption of a no-till tion, is paid for carbon stored and thencultivation practice is thought to result in decides to change practices and potentiallysoil with higher carbon sequestration capac- release the carbon that he or she was paidity. However, there is continuing scientific to sequester to offset emissions?debate over whether the practice of contin-uous no-till does in fact lead to long-term Additionality refers to the issue that aadditional storage of carbon in the soil farmer or rancher can only offer and be(Baker et al., 2007). paid for an offset for a new sequestration of carbon, not for a practice or a system ofThe CCX divided the United States into production already in place. For instance,zones and allocated specific levels of car- if a rancher developed a permanent windbon sequestration to each acre farmed in shelter belt, that change in land use woulda particular zone under continuous no-till likely result in new, or additional, car-practices, as illustrated in Figure 6. bon sequestration. However, a rancherWhile there may be some need to sim- who already developed a similar shel-plify the implementation of a nationwide ter belt would not be eligible for an offsetsoil carbon sequestration project related because the rancher would not be providingto tillage practice change, it is very additional carbon sequestration. Likewise, ATTRA Page 11
  12. 12. a farmer already engaged in conservation mitigate greenhouse gas emissions is one tillage would not provide additional carbon that is already well known — a direct sub- storage by maintaining that practice. sidy. Many federal conservation programs However, the current USDA Conservation provide incentives, known as cost shares, Stewardship Program provides a possible that help farmers and ranchers make payment structure that pays farmers to changes in practices to conserve natural maintain practices. resources. For more information, see the Additionality is also important because ATTRA publication Federal Resources for of the possibility that perverse incentives Sustainable Farming and Ranching. For may be created that encourage farmers or example, data in Figure 7, adapted from ranchers to release carbon so that they can a Natural Resources Conservation Service get paid to store it. For example, a farmer bulletin, indicates various crop and animal practicing no-till farming may decide to management practices that can either lower abandon the practice because of the new availability of per-acre payments and switch greenhouse gas emissions or increase car- back to no-till at a later time. To address bon sequestration. Under the Conservation this and stop additional greenhouse gas Stewardship Program and the Environmen- emissions, the idea of offsets would need tal Quality Incentive Program, farmers and to be expanded to include farmers and ranchers can receive incentives to adopt ranchers already undertaking a practice or new practices or receive support to main- specific land use that stores soil carbon. tain such practices. Though not designed to address climate change issues specifi- Subsidizing positive behavior cally, many federal conservation programs A final mechanism that could expand already provide public incentives to reduce the ability of the agriculture sector to greenhouse gas emissions.Figure 7. Agricultural practices and benefits. Source: NRCS. Conservation Practice GHG Objectives Additional Benefits CROPS Conservation tillage and reduced Sequestration, emission reduction Improves soil, water and air quality. field pass intensity Reduces soil erosion and fuel use Efficient nutrient management Sequestration, emission reduction Improves water quality. Saves expenses, time and labor. Crop diversity through rotations and Sequestration Reduces erosion and water require- cover crops ments. Improves soil and water quality. ANIMALS Manure management Emission reduction On-farm sources of biogas fuel and possibly electricity for large opera- tions, provides nutrients for crops. Rotational grazing and improved Sequestration, emission reduction Reduces water requirements. Helps forage withstand drought. Increases long- term grassland productivity. Feed management Emission reduction Reduces quantity of nutrients. Improves water quality. More efficient use of feed.Page 12 ATTRA Agriculture, Climate Change and Carbon Sequestration
  13. 13. In the future, conservation programs could Paustian et al. (2006) estimated that it wouldbe refocused to lower greenhouse emissions take a price of at least $13 per ton of car-or increase carbon sequestration. Perhaps bon dioxide equivalent ($50 per ton of car-modifications of the Conservation Steward- bon) per year to offset 70 million metric tonsship Program and the Environmental Qual- (MMT) of carbon dioxide equivalents. Thisity Incentive Program could allow for lon- would be a total public cost of close to $1ger contracts (currently a maximum of five billion dollars per year for perhaps as longyears) so that outcomes are reached and as 40 years. Also, this represents an offset ofmaintained. Also, the programs could add only 4 percent of total U.S. greenhouse gasspecific validation procedures to assure cli- emissions in 2004. Is this the least expen-mate targets are met and sustained. sive way to reduce greenhouse gas emissions compared to alternative public expenditures?Benefits of subsidies For instance, what if public dollars were com-There is an immediate benefit to farmers mitted to a research program to improve theand ranchers willing to make changes that gas mileage of automobiles?meet the challenges of climate stabilization. Finally, how do we know that Paustian et. al.If sufficiently funded with outreach and T are correct in their estimation of the incen- he publictechnical assistance, efforts can be made tive needed to change farming and ranch- sector willto assure that all farmers and ranchers — ing practices? Recently, Sperow (2007) esti- play anregardless of their situation — take advan- mated an average cost to sequester carbon attage of these programs. Finally, resources important role in $261 per ton of carbon. This is considerablycan be prioritized to different regions of the higher than the Paustian estimate. While determining howcountry or to specific practices or systems of the difference between these studies can to engage the agri-production so programs can be cost-effec- be explained by the fact that there is a wide culture sector in thetive in reaching climate change goals. regional variation in carbon sequestration reduction of green- capacity and how sequestration is accom- house gas emissions.Downside of subsidies plished, public costs would nonetheless beSubsidies are a public cost, and this is a con- significant to achieve greenhouse gas emis-siderable downside. Furthermore, subsidies sion reductions through subsidization.are based on the idea that the governmentcan know and assure that the practices it Summarypays for achieve the intended outcomes. Forexample, the federal government provides The public sector will play an important rolesignificant subsidization of corn ethanol pro- in determining how to engage the agricul-duction. Many argue that this changed the ture sector in the reduction of greenhouseprice of field corn and increased costs for gas emissions. The government can use itspeople who use corn as animal feed and power to tax, subsidize or create a new mar-for other countries that import corn to feed ket mechanism to do this. In 2008, the U.S.people. There are also questions about how Senate debated climate change legislation,subsidies can reduce greenhouse gas emis- including the Lieberman-Warner bill. Thissions. Will subsidizing a shift to a continuous bill proposes a modified cap-and-trade sys-no-till cultivation operation result in greater tem with the expectation that the agriculturecarbon sequestration? If the scientific under- sector will provide at least 15 percent of thestanding of the relationship between carbon offsets needed to reduce greenhouse gassequestration and no-till is simply in error, emissions 71 percent from 2005 levels bythen public dollars spent to change farmer 2050. Whether this or future legislation willbehavior would be wasted. Furthermore, will become the base of future climate changesubsidization offer the least expensive way to improvements, there is little doubt that agri-achieve a specific outcome? culture will play some role in the ATTRA Page 13
  14. 14. References Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning (eds)].Agricultural and Food Policy Center. 2008.Carbon Markets: A Potential Source of Financial IPCC. 2007b. Climate Change 2007: Agriculture. Benefits for Farmers and Ranchers, Texas Contribution of Working Group III to the A&M University System. pubs/2/519/RR%2008-03.pdf Fourth Assessment Report of the Intergovern- mental Panel on Climate Change. [B. Metz,Alberta Agriculture and Rural Development. 2000. O.R. Davidson, P.R. Bosch, R. Dave, L.A. Greenhouse Gas Emissions and Albertas Meyer (eds)]. Cropping Industry – Things You Need to ar4/wg3/ar4-wg3-chapter8.pdf Know.$department/ deptdocs.nsf/all/cl3010 Mazza, Patrick. 2007. Growing Sustainable Biofuels — Common Sense on Biofuels, Part 2.Backlund, P., et al. 2008. U.S. Climate Change Harvesting Clean Energy Journal (online). Science Program and the Subcommittee on Global Change Research May 2008. The journal/2007/11/12/growing-sustainable- effects of climate change on agriculture, land biofuels-producing-bioenergy-on-the-farm.html resources, water resources, and biodiversity in the United States. Ogburn, Stephanie Paige. Climate cash-in: West- Library/sap/sap4-3/final-report/default.htm ern farmers and ranchers use crops — and cows — to tap into the carbon market. HighBaker, J.M., et al. 2007. Tillage and Soil Carbon Seques- Country News, May 26, 2008. tration — What Do We Really Know? Agricul- issues/371/17713 ture, Ecosystems and Environment. 118: 1-5. Paustian, et al. 2006. Agriculture’s Role in Green-Chicago Climate Exchange. 2009. Offset Project house Gas Mitigation. Pew Center on Global Verification. Climate Change. jsf?id=102 loads/Agriculture%27s%20Role%20in%20GHGCongressional Budget Office. 2008. Policy Options %20Mitigation.pdf for Reducing CO2 Emissions, Congressio- nal Budget Office study. Pew Center on Global Climate Change. 2008.Climate cfm?index=8934 Change 101 – The Science and Impacts. Research Service. 2008. Climate Climate%20Change%20101,%20The%20Science Change: The Role of the U.S. Agriculture %20and%20Impacts.pdf Sector. Renee Johnson. documents/organization/81931.pdf Rodale Institute. 2008. Regenerative Organic Farming: A Solution to Global Warming.EPA. 2008a. Agriculture and Food Supply. Paper-07_30_08.pdfEPA. 2008b. Carbon Sequestration in Agriculture and Sperow, M. 2007. The Marginal Costs of Forestry. Carbon Sequestration: Implications of OneEPA. 2008c. Local Scale: Carbon Pools in Forestry Greenhouse Gas Mitigation Activity. Journal of and Agriculture. Soil and Water Conservation. 62(6):367-375. local_scale.htmlFarmers Union. 2008. Carbon Credit Program Resources Brochure. ccbrochure.pdf Web sitesIPCC. 2007a. Climate Change 2007: The Physical Environmental Protection Agency – Carbon Science Basis. Contribution of Working Group I Sequestration in Agriculture and Forestry, to the Fourth Assessment Report of the 14 ATTRA Agriculture, Climate Change and Carbon Sequestration
  15. 15. Environmental Protection Agency Global Warming Agriculture and Climate Change: Greenhouse Gas Impacts on Agriculture, Mitigation Opportunities and the 2007 Farm climatechange/effects/agriculture.html Bill. Evan Branosky and Suzie Greenhalgh. World Resources Institute Policy Note. MarchPew Center on Global Climate Change, 2007. agricultureandghgmitigation.pdfConsortium for Agricultural Soil Mitigation Soil Carbon Sequestration in Agriculture: Farm of Greenhouse Gases (CASMGS), Management Practices Can Affect Greenhouse Gas Emissions. Dept. of Land Resources andClimate Friendly Farming, Washington State Environmental Sciences, Montana State University Center for Sustaining Agriculture University Extension Service. Perry Miller, and Natural Resources, Rick Engel, and Ross Bricklemyer. Northwest STEEP - Solutions to Environmental AgandNaturalResources/MT200404AG.pdf and Economic Problems, Using Agricultural Land for Carbon, Purdue University. Andrea S. Bongen. Carbon Center at Kansas State University, Contracting for Soil Carbon Credits: Design and Costs of Measurement and Monitoring. Department of Agricultural Economics and Economics,Reports Montana State University Department of SoilHarnessing Farms and Forests in the Low-Carbon and Crop Sciences and Natural Resource Economy: How to Create, Measure, and Verify Ecology Laboratory, Colorado State University. Greenhouse Gas Offsets. The Nicholas Institute May 2002. Siân Mooney, John Antle, for Environmental Policy Solutions. Edited by Susan Capalbo, and Keith Paustian Zach Willey & Bill Chameides, Environmental Defense. Duke University Press. Durham & Multiple Benefits of Carbon-Friendly Agricultural London. 2007 Practices: Empirical Assessment ofAddressing Climate Change and Providing New Conservation Tillage. Center for Agricultural Opportunities for Farmers. Institute for Agri- and Rural Development, Iowa State University. culture and Trade Policy. Mark Muller, Cath- Lyubov A. Kurkalova, Catherine L. Kling, erine Hofman, Paul Hodges. September 2000. Jinhua Zhao. February 2003. www.card. 258&refID=29793 03wp326.pdfAppendixHow to get involved in voluntary contract expectations and verification policies. Review all of these items with carbon aggregators before decid-private carbon markets ing to enroll.The future of the voluntary carbon market remainsto be seen. Currently, farmer payments from carbon Eligibilityoffsets alone are not substantial enough to rationalizedecisions for land management changes. However, it The following table was developed by the National Farm-is important that the farm sector be included in solu- ers Union Carbon Credit Program to help farmers deter-tions for mitigating climate change. Before enroll- mine eligibility for enrollment in specific projects (Farmersing in any type of carbon credit program, however, it Union, 2008). Different aggregators might have differentis important to understand eligibility requirements, requirements for eligibility, enrollment and ATTRA Page 15
  16. 16. • A signed contract between the landowner and Eligible land and credit-earning potential the Chicago Climate Exchange or an aggrega- No-till: Carbon credits are issued at the rate of 0.2 to 0.6 metric tons of carbon per acre annually to participants who tor for the appropriate management practices commit to continuous conservation tillage on enrolled land (Agricultural and Food Policy Center, 2008). for at least five future years. In most cases, credit can be earned for the previous year. Enrolled acres may be planted in low-residue crops, such as beans, peas and lentils, no Contracts more than three of the contract years. Alfalfa or other hayed Contracts are based on a five-year period for crop forage will be considered as no-till for these contracts. production and rangeland projects. At the end of the Seeded grass stands: Carbon credits are earned at a rate of 0.4 metric tons to 1 metric ton per acre annually, even contract, producers are free to renew the contract for if enrolled in Conservation Reserve Program. Grass stands another five years or let the contract expire. Once a seeded prior to January 1, 1999, are not eligible for enroll- contract expires, landowners have no more obligations ment in the program. Credits can be earned back to 2003 with proper documentation. to the CCX or to the aggregator. However, if a land- Native rangeland: Grassland with a formal grazing plan owner discontinues the approved sequestration produc- may earn up to 0.52 tons per acre annually. Credits can be tion practice prior to the end of the contract, the CCX earned back to 2003 with proper documentation. or aggregator will ask the owner to return the amount Forestry: Trees planted after 1990 can earn carbon credits of carbon that would have been sequestered up to that annually, provided no harvest is intended. point or pay for the same amount of carbon at mar- Methane offset: Methane captured or destroyed can earn carbon credit. Animal waste systems, including anaero- ket price. Additionally, the project owner will not be bic digesters and covered lagoons, can be enrolled. Each allowed to further participate in the CCX (Agricultural ton of methane captured earns 21 tons of carbon credits and Food Policy Center, 2008). (Farmers Union, 2008). VerificationFinding an aggregator Once a project is approved, the aggregator is responsibleSeveral aggregators are located across the country for obtaining independent verification by an approvedto help farmers and ranchers enroll in carbon offset verifier to ensure the actual greenhouse gas sequestra-projects. The following aggregators provide Web siteswith detailed information on contracts and enrollment. tion. A project is subject to initial and annual verificationFor a full list of carbon aggregators for the Chicago for the duration of its contract with the Chicago ClimateClimate Exchange, visit their Web site at www. Exchange (Chicago Climate Exchange, 2009) • National Farmers Union Carbon Credit Program, • National Carbon Offset Coalition, Agriculture, Climate Change and • Pacific Northwest Direct Seed Association, Carbon Sequestration By Jeff Schahczenski and Holly Hill NCAT Program SpecialistsHow to enroll © 2008 NCATYou will need to provide the following information to Holly Michels, Editorenroll in carbon sequestration programs: Amy Smith, Production • Land maps to document ownership of a given This publication is available on the Web at: tract of land, including the legal description of or the tract. IP338 • Document of management practices, such as Slot 336 program forms for croplands, grass and forest Version 012309 management.Page 16 ATTRA