Monday, May 07, 2007

Farming Carbon

The House Committee on Natural Resources recently held a hearing on geological and terrestrial sequestration of carbon dioxide. The House Committee on Energy and Commerce held a similar hearing in March.

Congress' new enthusiasm for technological climate change solutions has spread across both parties and throughout the Washington DC. On Tuesday, May 1 Senator Saxby Chambliss issued a press release on his hopes for voluntary carbon offset trading as a supplement to farm income.

Currently, farmers who wish to profit from the sequestration potential of their soils can sell carbon credits on the Chicago Climate Exchange (CCX). The exchange offers binding contracts to companies and cooperatives that wish to voluntarily offset their emissions. The CCX does not certify individual farms for sequestration. Instead, it relies on third-parties called aggregators who compile databases of farmers willing to adopt carbon-friendly management practices. From those databases, CCX randomly selects farms for field visits. Once an aggregator’s sample farms are certified its entire portfolio is ready for trading.

After an aggregator trades its portfolio, individual farmers receive their allotted share of the sale less a 10 percent administrative fee for the aggregator. There are only two aggregators presently working to certify conservation-minded farmers - the National Farmers Union’s Carbon Credit Program and the Iowa Farm Bureau Carbon Credit Aggregation Program.

Under both NFU and Iowa Farm Bureau aggregation plans all producers willing to adopt conservation tillage best practices are credited with 0.5 metric ton of carbon for each acre of eligible no-till cropping and 0.75 ton per acre for qualifying grass stands each year of the contract.

To be eligible, lands must be classified as "crop land" by the USDA's Farm Service Agency. Producers must also agree to use conservation tillage as defined in the Natural Resources Conservation Service National Handbook of Conservation Practices.

According to the Iowa Farm Bureau these definitions are: No-till/Strip-till - Managing the amount, orientation, and distribution of crop and other plant residue on the surface year-round while growing crops in narrow slots or tilled or residue-free strips in soil previously untilled by full width inversion implements.

Fallow: In areas where non-tillage fallow is an acceptable practice, no credits shall be issued for the year in which the land is fallowed.

Crop Residue Removal: No credits shall be issued on otherwise eligible cropland (row crops and small grains) during any year in which crop residue is removed by harvest or burning. Crop harvest is permitted for alfalfa and grass hay and through grazing of grass.

As the programs have expanded, aggregators have placed additional regional requirements on sequestering farmers. The Iowa Farm Bureau's requirements are available here.

Since 2003, CCX carbon prices have hovered around $4 per ton of sequestered carbon. Assuming a price of $4 per ton, participating farmers will receive $2.00 per acre for no-till and $3.00 per acre for grass stands, minus the aggregation fee.

At present, aggregators don't attempt to gauge the carbon impact of individual farms nor do they quantify counterbalancing emissions of traces gases. Hopefully, ASA/CSSA/SSSA members can play a constructive role in the CCX, providing the scientific basis on which aggregators will improve their climate accounting.