Dealing in Dirt
It's been said that money makes the world go 'round, and now it can also make it more environmentally friendly. Farmers who practice no-till or any other tillage-limiting production technique can earn a few extra dollars by carbon trading - the latest push for a greener environment that rewards growers who sequester, or keep carbon in the soil. Carbon trading efforts have been expanding across the United States and involve energy industries paying no-till farmers through bilateral agreements, or agricultural groups working in the open market on farmers' behalf.
The Chicago Climate Exchange (http://www.chicagoclimateexchange.com )is a voluntary rules-based greenhouse gas emission and trading system, and the place to go to trade carbon credits in the open market. Currently, carbon is trading at $1.70 per ton of carbon dioxide, which roughly translates into a dollar-per-acre for the farmer. On average, Ohio soils can sequester about 500 pounds of carbon per acre. "Currently, the financial returns aren't that great, but at that rate a farmer with 1,000 acres of no-till could earn $1,000 annually for merely continuing his established practices," said Mark Wilson, president of Land Stewards LLC in Columbus, Ohio. Wilson spoke about carbon trading to no-till farmers during the recent Ohio State University Extension Ohio No-Till Conference in Plain City, Ohio. "No-till in and of itself is a carbon credit," Wilson said. "If someone is willing to pay you to do what you've been doing, then why not get involved? You are just leaving money on the land if you don't."
Examples of carbon trading efforts throughout the United States and elsewhere include: Pacific Northwest Direct Seed Association, which works with Entergy, an electric company based in Louisiana, to "lease" carbon credits to Washington state farmers. Greenhouse Emissions Management Consortium, a Canadian company whose efforts to trade carbon with farmers has expanded into the western United States. World Bank in Washington, D.C., which has mobilized the BioCarbon Fund to alleviate poverty and promote biodiversity conservation by aiding farmers in developing countries to practice no-till. In Iowa, more than 80,000 acres of cropland have been enrolled and the Iowa Farm Bureau is looking to expand the project outside of the state.
Though carbon trading varies at the Chicago Climate Exchange, credits can reach more than $2 a ton. Some industries have rewarded farmers with as much a $5 a ton for sequestered carbon. However, carbon trading in the U.S. holds no candle to the revenue European farmers generate - in some instances as high as $58 per ton. It's conservatively estimated that the European Union will trade as much as $1 billion worth of carbon emissions annually by 2010. The Kyoto Protocol is driving the higher prices in Europe. The Kyoto Protocol is an international agreement to mandate industry reduction of greenhouse gas emissions. The United States is not part of the agreement. (AgAnswers, 1/6/06).
