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Home , Carbon sequestration, Sustainable agriculture, Total carbon

, Change and Sequestration A Publication of ATTRA—National Sustainable Agriculture Information Service • 1-800-346-9140 • www.attra.ncat.org By Jeff Schahczenski and reductions in gas emissions can occur through a variety of and Holly Hill agriculture practices. This publication provides an overview of the relationship between agriculture, NCAT Program and carbon sequestration. It also investigates possible options for and ranchers Specialists to have a positive impact on the changing climate and presents opportunities for becoming involved © 2009 NCAT in the emerging carbon market.

Table of Contents

Introduction ...... 1 Climate change science ...... 2 How does climate change infl uence agriculture? ...... 3 How does agriculture infl uence climate change? ...... 3 Agriculture’s role in mitigating climate change ...... 6 The value of carbon: Potential benefi ts for agriculture ...... 8 Charge systems: ...... 8 Cap and trade: A private market for emissions ...... 9 Subsidizing positive behavior ...... 12 Summary ...... 13 References ...... 14 Resources ...... 14 Appendix: How to get involved in voluntary private carbon markets ...... 15 An organic grass fi eld. Growing research is showing that organic production systems are one of the most climate-friendly systems of 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 in regions ATTRA—National Sustainable past century, and is projected by the Inter- Agriculture Information Service where summer heat already limits (www.ncat.attra.org) is managed governmental Panel on Climate Change to production; by the National Center for Appro- increase by an additional 3.2 to 7.2 degrees priate Technology (NCAT) and is • increase soil evaporation rates; and funded under a grant from the over the 21st century (IPCC, 2007a). These Department of Agriculture’s Rural Business- seemingly slight changes in temperature • increase the chances of severe Cooperative Service. Visit the could have profound implications for - (2008a). NCAT Web site (www.ncat.org/ sarc_current.php) for ers and ranchers. According to the Envi- Innovative farming practices such as conser- more information on ronmental Protection Agency, an increase our sustainable agri- vation , organic production, improved culture projects. in average temperature can: cropping systems, restoration, change and 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- by trapping even more of tices have multiple benefi ts that may also the sun’s heat, resulting in a global warm- enhance profi tability, improve farm energy ing effect. Figure 1 illustrates the natural effi ciency 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 (CO2), occurred throughout human history. The (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 , Conservation Tillage the temp increase to a rise in carbon diox- nitrous oxide and methane have longer durations in the atmosphere and absorb Pursuing Conservation ide and other greenhouse gases released Tillage Systems from the burning of fossil fuels, deforesta- more long-wave radiation. Therefore, small for Organic tion, agriculture and other industrial pro- quantities of methane and nitrous oxide can Production cesses. Scientists refer to this phenomenon have signifi cant effects on climate change. as the enhanced greenhouse effect. Energy Saving Tips Several excellent resources and fact sheets for Irrigators The naturally occurring greenhouse effect explain the greenhouse effect and the Anaerobic Digestion traps the heat of the sun before it can science behind climate change. See the of Animal Wastes: be released back into space. This allows Resources section for information on how Factors to Consider the Earth’s surface to remain warm and to obtain copies. Biodiesel: The Dimensions Figure 1. The Greenhouse Eff ect Source: The National Academy of Sciences. www.climatechange.ca.gov/publications/faqs.html Opportunities and Questions Natural Greenhouse Eff ect Enhanced Greenhouse Eff ect The greenhouse eff ect is a natural warm- Increasing the amount of greenhouse gases ing process. Carbon dioxide (CO2) and cer- intensifi es the greenhouse eff ect. This side Opportunities 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 Industrial Federal Resources for ing eff ect that has some similarity to the Revolution began. Sustainable Farming warming inside a greenhouse, hence the and Ranching name “greenhouse eff ect.”

Illustration of the greenhouse eff ect (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 eff ect and amplifying the warming of the earth.

Page 2 ATTRA Agriculture, Climate Change and Carbon Sequestration How does climate change will likely extend production infl uence agriculture? into late fall and early spring. • Climate change-induced shifts in Climate change may have benefi cial as well species are already under way as detrimental consequences for agricul- in rangelands. The establishment ture. Some research indicates that warmer of perennial herbaceous species is temperatures lengthen growing seasons and reducing soil water availability early increased carbon dioxide in the air results in the growing season. in higher yields from some crops. A warm- ing climate and decreasing soil moisture can • Higher temperatures will very likely also result in production patterns shifting reduce production during northward and an increasing need for irri- the summer season, but these losses gation. Changes, however, will likely vary will be partially offset by warmer signifi cantly by region. Geography will play temperatures during the winter a large role in how agriculture might benefi t season (Backlund et al., 2008). from climate change. While projections look favorable for some areas, the potential of How does agriculture increased climate variability and extremes infl uence climate change? onserva- are not necessarily considered. Benefi ts to tion tillage, agriculture might be offset by an increased Agriculture’s contribution to likelihood of heat waves, , severe Corganic thunderstorms and tornadoes. An increase production, cover in climate variability makes adaptation dif- Agriculture activities serve as both sources cropping and crop fi cult for farmers. and sinks for greenhouse gases. Agriculture rotations can dras- sinks of greenhouse gases are reservoirs of tically increase the The U.S. Department of Agriculture carbon that have been removed from the released a report in May 2008 that focused atmosphere through the process of biologi- amount of carbon on the effects of climate on agriculture, cal carbon sequestration. stored in . specifi cally on cropping systems, pasture and lands and animal management The primary sources of greenhouse gases in (Backlund et al., 2008). The following fi nd- agriculture are the production of - ings are excerpted from the report: based ; the combustion of fossil fuels such as coal, gasoline, diesel fuel and natural • With increased carbon dioxide and gas; and . 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 . • The marketable 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 . 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 emissions www.attra.ncat.org ATTRA Page 3 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 Activities

GHG Emissions (CH4 and N2O) Agriculture Soil Managementa 366.9 353.4 376.8 365.1 370.9 Enteric Fermentationb 115.7 120.6 113.5 112.1 115.0 management 39.5 44.1 48.3 50.8 45.6 Cultivation 7.1 7.6 7.5 6.9 7.4 Agricultural Residue Burning 1.1 1.1 1.3 1.4 1.2 Subtotal 530.3 526.8 547.4 536.3 540.1 Carbon Sinks Agricultural Soils (33.9) (30.1) (29.3) (32.4) (31.7) Othernanananana Subtotal (33.9) (30.1) (29.3) (32.4) (31.7) Net Emissions, Agriculture 496.4 496.7 518.1 503.9 508.4

c Attributable CO2 emissions: 46.8 57.3 50.9 45.5 52.6 /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, 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 6,787.1 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, [http://epa.gov/climatechange/emissions/ 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 and /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 stocks and carbon uptake from urban and landfi lled yard trimmings.

Page 4 ATTRA Agriculture, Climate Change and Carbon Sequestration Figure 3. Agricultural greenhouse gas emissions, average from 2001 to 2005. Source: EPA, 2007 Inventory report, April 2007. www.epa.gov/climatechange/emissions/usinventoryreport.html

2. 1. f 1. %NTERIC ERMENTATION#(  3. !GrESIDUEbURNING#( . /  4. 2.   5. management 3. -ANURE ./ 

management 4. -ANURE #( 

c 5. 2ICE ULTIVATION#(  6. s management 6. !G OIL ./ 

Figure 3 illustrates agricultural greenhouse gas Carbon sequestration emissions 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 lands tion in Figures 2 and 3: and to remove carbon dioxide from the atmosphere. Carbon dioxide is absorbed • Despite some improvement in by trees, and crops through photo- certain areas since 1990, the synthesis and stored as carbon in U.S. agricultural production sec- in 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 infl uenced by the addition of car- sector contributes more greenhouse bon from dead plant material and carbon gas emissions from methane (CH ) losses from respiration, the decomposition 4 process and both natural and human dis- and nitrous oxide (N2O) than from carbon dioxide (CO ). turbance of the soil. By employing farming 2 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 fi elds. U.S agricultural production sector. In the United States, forest and croplands Enteric fermentation (flatulence 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). www.attra.ncat.org ATTRA Page 5 Figure 4. Carbon pools in forestry and agriculture. Source: EPA. www.epa.gov/sequestration/local_scale.html

Atmospheric carbon is fi xed 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 . to belowground carbon soils.

Belowground carbon: • Roots : • 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 benefi ts of soil carbon; and reducing carbon dioxide, conservation tillage include improved water methane and nitrous oxide emissions. conservation, reduced soil , reduced

Page 6 ATTRA Agriculture, Climate Change and Carbon Sequestration fuel consumption, reduced compaction, Irrigation and water increased planting and harvesting fl exibility, reduced labor requirements and improved management soil 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 a Improved cropping and reduction in operating hours; drip irriga- organic systems tion technologies; and center-pivot irriga- tion systems, can signifi cantly reduce the Recent reports have investigated the potential amount of water and nitrogen applied to of organic agriculture to reduce greenhouse gas emissions (Rodale Institute, 2008). the cropping system. This reduces green- Organic systems of production increase soil house emissions of nitrous oxide and water organic matter levels through the use of com- withdrawals. For more information, see the posted animal and cover crops. ATTRA publication Energy Saving Tips Organic cropping systems also eliminate the for Irrigators. emissions from the production and transpor- tation of synthetic fertilizers. Components of Nitrogen use effi ciency organic agriculture could be implemented onservation with other sustainable farming systems, Improving efficiency through farming practices like precision farming using GPS such as conservation tillage, to further practices tracking can reduce nitrous oxide emis- C increase climate change mitigation poten- that conserve tial. See the ATTRA publication Pursuing sions. Other strategies include the use of moisture, improve Conservation Tillage Systems for Organic Crop cover crops and manures (both green and Production for more information. animal); nitrogen-fixing crop rotations; yield potential and composting and teas; and inte- reduce erosion Generally, conservation farming prac- tices that conserve moisture, improve yield grated pest management. The ATTRA Farm and fuel costs also potential 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 at tices that reduce carbon dioxide emissions the following link: www.attra.ncat.org/farm_ and increase soil carbon include direct energy/nitrogen.html. seeding, fi eld , rotational graz- ing, perennial forage crops, reduced sum- Methane capture mer fallow and proper straw management (Alberta Agriculture and Rural Develop- Large emissions of methane and nitrous ment, 2000). Using higher-yielding crops oxide are attributable to livestock waste or varieties and maximizing yield potential treatment, especially in dairies. Agriculture can also increase soil carbon. methane collection and combustion systems include covered lagoons and complete mix Land restoration and and plug fl ow digesters. Anaerobic digestion land use changes converts animal waste to energy by captur- ing methane and preventing it from being Land restoration and land use changes released into the atmosphere. The captured that encourage the conservation and methane can be used to fuel a variety of improvement of soil, water and air qual- on-farm applications, as well as to gener- ity typically reduce greenhouse gas emis- sions. Modifi cations to grazing practices, ate electricity. Additional benefi ts include such as implementing sustainable stocking reducing odors from livestock manure rates, and seasonal use and reducing labor costs associated with of rangeland, can lead to greenhouse gas manure removal. For more information on reductions. 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 Consider. www.attra.ncat.org ATTRA Page 7 individual and rancher, as well as society at large, is the heart of understand- There is signifi cant scientifi c 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- specifi c 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 specifi c 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- “ reating farm tive to switch to alternative renewable fuels, and forestry Other renewable energy options invest in technology changes to use carbon- systems with Renewable energy opportunities such as based fuels more effi ciently and in general C wind and solar also present significant adopt practices that would lower their level of strong incentives for opportunities for the agriculture sector to greenhouse gas emissions. Thus a carbon or growing soil carbon reduce greenhouse gas emissions. For fur- greenhouse gas emission tax values carbon could well be at the ther information about these options, see in negative terms of tax avoidance. Those center of climate the ATTRA publication Renewable Energy and 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 - The value of soil carbon: ers, a carbon tax would increase the direct Potential benefi ts for and indirect costs of agricultural production. agriculture Farmers and ranchers use carbon-based fuels directly in the forms of and As Mazza (2007) has remarked, “creating and indirectly in the forms of farm and forestry systems with strong incen- carbon-based fertilizers and 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 effi ciency 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 profi t- 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 Benefi ts of a carbon tax for than the net benefi ts of an infl exible cap” farmers and ranchers (Congressional Budget Offi ce, 2008). A major benefi t of a carbon or greenhouse Downside of a carbon tax gas emission tax would be the creation of a stream 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 taxation and technology changes necessary to lower lies and issues of equity. In short, taxation greenhouse gas emissions. For example, is about who pays and who does not. New many 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 logic Quality Incentive Program and the newer to the argument that the burden of a car- Conservation Program, sup- bon or greenhouse gas emission tax should port improvements in soil quality and could be placed fi rst and foremost on those who be funded in part from emission or carbon either create carbon-intensive fuels or those taxes, thereby providing a revenue source who are the largest emitters of greenhouse to subsidize those who adopt or maintain gases. The greatest source of greenhouse gas emissions in the United States is the emission-reduction practices or carbon tax provides combustion of fossil fuels. Since agriculture sequestration activities. See the ATTRA uses a small percentage of U.S. fossil fuels, a clear and publication Federal Resources for Sustain- an argument can be made that the burden stable cost able Farming and Ranching for more infor- A of taxation should not to fall on this sector. mation. Tax revenues could also assist in to current practices. Still, agriculture is heavily dependent on the support of conservation programs like fossil fuels and any carbon or greenhouse the Conservation Reserve Program, which gas emission tax would likely be costly. works to keep sensitive and highly erodible lands out of production since these lands The ability of any individual farmer or sequester soil carbon. rancher to pass on the increased costs of fossil fuels that this kind of taxation would Another benefi t of this approach is that a create is much more limited than in other tax provides a clear and stable cost to cur- sectors of the economy. For instance, if a rent practices. A tax also makes it easier carbon tax is placed on diesel fuel, diesel to determine changes that will be more fuel manufacturers can more easily pass on profi table 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 is sions as expressed by their emission tax, it little product substitution and where a few would be easier for the operation to deter- producers dominate the market. This is not mine alternatives to current practices that the case for farmers and ranchers, given would be cost effi cient. At a high enough tax their relative lack of market concentration rate, installing methane digesters to lower and power. greenhouse gas emission would become economically feasible. Cap and trade: A private market Finally, it has been argued that a carbon for greenhouse gas emissions tax 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 Offi ce report states: “available research suggests that in the near The market is created by a government term, the net benefi ts (benefi ts minus costs) that sets a limit or cap on total greenhouse of a tax could be roughly fi ve times greater gas emissions allowed. Companies that www.attra.ncat.org ATTRA Page 9 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- Benefi ts 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 . 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 total emissions. As the supply of allow- organic system of production, measurable improvements in the ability of the farmer to ances decreases, the value of the allow- sequester carbon could be verifi ed 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.com

Page 10 ATTRA Agriculture, Climate Change and Carbon Sequestration A limited, privately created and voluntary Figure 6. Conservation tillage soil off set map. Source: Chicago Climate cap-and-trade system called the Chicago Exchange. www.chicagoclimateexchange.com Climate Exchange (CCX) has been in oper- ation in the United States since 2003. The emission cap is set by emitting entities that voluntarily sought to limit greenhouse gas emissions. Purchases of agriculture off- sets have been part of this exchange. As can be seen from Figure 5, the price of car- bon dioxide equivalents per ton has varied signifi cantly over the life of the exchange and hit its highest level in 2008 at $7.35 per ton. This price has not yet resulted in an overwhelming participation by farmers and ranchers.

Downsides of cap and trade For farmers and ranchers to provide carbon offsets for greenhouse gas emitters, farmers and ranchers must be willing to make long- term, or even permanent, changes in not only practices but perhaps whole systems doubtful that the actual carbon storage levels of production. These changes also need to allocated can be achieved across areas that provide verifi able changes that result in true are so large. Finally, the CCX does not offsets of greenhouse gas emissions. The verify the actual carbon storage as a result issues of verifi ability, permanence and what of the practice change, but only monitors is known as additionality are critical to the that the practice is maintained during the success of agriculture’s role in the cap-and- life of the contract. Thus, it is doubtful the trade system and the ultimate reduction of truly matches actual carbon greenhouse gas emissions. sequestered. Verifi ability 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 rancher able 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 then cultivation practice is thought to result in decides to change practices and potentially soil with higher carbon sequestration capac- release the carbon that he or she was paid ity. However, there is continuing scientifi c 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 a additional 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 of The CCX divided the United States into production already in place. For instance, zones and allocated specifi c levels of car- if a rancher developed a permanent wind bon sequestration to each acre farmed in shelter belt, that change in land use would a particular zone under continuous no-till likely result in new, or additional, car- practices, as illustrated in Figure 6. bon sequestration. However, a rancher While 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 offset soil carbon sequestration project related because the rancher would not be providing to tillage practice change, it is very additional carbon sequestration. Likewise, www.attra.ncat.org ATTRA Page 11 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- specifi c 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 benefi ts. Source: NRCS. http://soils.usda.gov/survey/global_climate_change.html

Conservation Practice GHG Objectives Additional Benefi ts CROPS Conservation tillage and reduced Sequestration, emission reduction Improves soil, water and air quality. fi eld pass intensity Reduces and fuel use Effi cient 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 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 effi cient use of feed.

Page 12 ATTRA Agriculture, Climate Change and Carbon Sequestration In the future, conservation programs could Paustian et al. (2006) estimated that it would be 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- modifi cations of the Conservation Steward- bon) per year to offset 70 million metric tons ship Program and the Environmental Qual- (MMT) of carbon dioxide equivalents. This ity Incentive Program could allow for lon- would be a total public cost of close to $1 ger contracts (currently a maximum of fi ve billion dollars per year for perhaps as long years) so that outcomes are reached and as 40 years. Also, this represents an offset of maintained. Also, the programs could add only 4 percent of total U.S. greenhouse gas specifi c 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? Benefi ts of subsidies For instance, what if public dollars were com- There is an immediate benefi t to farmers mitted to a research program to improve the and 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 suffi ciently funded with outreach and are correct in their estimation of the incen- he public technical assistance, efforts can be made tive needed to change farming and ranch- sector will to assure that all farmers and ranchers — ing practices? Recently, Sperow (2007) esti- play an regardless of their situation — take advan- T mated an average cost to sequester carbon at tage of these programs. Finally, resources important role in $261 per ton of carbon. This is considerably determining how can be prioritized to different regions of the higher than the Paustian estimate. While to engage the agri- country or to specifi c practices or systems of the difference between these studies can production so programs can be cost-effec- be explained by the fact that there is a wide culture sector in the tive 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 be Subsidies are a public cost, and this is a con- signifi cant to achieve greenhouse gas emis- siderable downside. Furthermore, subsidies sion reductions through subsidization. are based on the idea that the government can know and assure that the practices it Summary pays for achieve the intended outcomes. For example, the federal government provides The public sector will play an important role signifi cant 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 greenhouse price of fi eld corn and increased costs for gas emissions. The government can use its people 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. This sions. Will subsidizing a shift to a continuous bill proposes a modifi ed cap-and-trade sys- no-till cultivation operation result in greater tem with the expectation that the agriculture carbon sequestration? If the scientifi c under- sector will provide at least 15 percent of the standing of the relationship between carbon offsets needed to reduce greenhouse gas sequestration and no-till is simply in error, emissions 71 percent from 2005 levels by then public dollars spent to change farmer 2050. Whether this or future legislation will behavior would be wasted. Furthermore, will become the of future climate change subsidization offer the least expensive way to improvements, there is little doubt that agri- achieve a specifi c outcome? culture will play some role in the effort. www.attra.ncat.org ATTRA Page 13 References Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning (eds)]. Agricultural and Food Policy Center. 2008.Carbon http://ipcc-wg1.ucar.edu/wg1/wg1-report.html Markets: A Potential Source of Financial IPCC. 2007b. Climate Change 2007: Agriculture. Benefi ts for Farmers and Ranchers, Contribution of Working Group III to the A&M University System. www.afpc.tamu.edu/ 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 Alberta's Meyer (eds)]. www.ipcc.ch/pdf/assessment-report/ Cropping Industry – Things You Need to ar4/wg3/ar4-wg3-chapter8.pdf Know. www1.agric.gov.ab.ca/$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 http://harvestjournal.squarespace.com/ Global Change Research May 2008. The journal/2007/11/12/growing-sustainable- effects of climate change on agriculture, land biofuels-producing--on-the-farm.html resources, , and in the United States. www.climatescience.gov/ Ogburn, Stephanie Paige. Climate cash-in: West- Library/sap/sap4-3/fi nal-report/default.htm ern farmers and ranchers use crops — and cows — to tap into the carbon market. High Baker, J.M., et al. 2007. Tillage and Soil Carbon Seques- Country News, May 26, 2008. www.hcn.org/ tration — What Do We Really Know? Agricul- issues/371/17713 ture, 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 Verifi cation. www.chicagoclimatex.com/content. Climate Change. www.pewclimate.org/docUp- jsf?id=102 loads/Agriculture%27s%20Role%20in%20GHG Congressional Budget Offi ce. 2008. Policy Options %20Mitigation.pdf

for Reducing CO2 Emissions, Congressio- nal Budget Offi ce study. www.cbo.gov/doc. Pew Center on Global Climate Change. 2008.Climate cfm?index=8934 Change 101 – The Science and Impacts. www.pewcenteronthestates.org/uploadedFiles/ Congressional Research Service. 2008. Climate Climate%20Change%20101,%20The%20Science Change: The Role of the U.S. Agriculture %20and%20Impacts.pdf Sector. Renee Johnson. http://fpc.state.gov/ documents/organization/81931.pdf Rodale Institute. 2008. Regenerative : A Solution to Global Warming. EPA. 2008a. Agriculture and Food Supply. www.rodaleinstitute.org/fi les/Rodale_Research_ http://epa.gov/climatechange/effects/agriculture.html Paper-07_30_08.pdf EPA. 2008b. Carbon Sequestration in Agriculture and Sperow, M. 2007. The Marginal Costs of Forestry. www.epa.gov/sequestration/index.html Carbon Sequestration: Implications of One EPA. 2008c. Local Scale: Carbon Pools in Forestry Greenhouse Gas Mitigation Activity. Journal of and Agriculture. www.epa.gov/sequestration/ Soil and . 62(6):367-375. local_scale.html Farmers Union. 2008. Program Resources Brochure. http://carboncredit.ndfu.org/pdfs/ ccbrochure.pdf Web sites IPCC. 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 www.epa.gov/sequestration Page 14 ATTRA Agriculture, Climate Change and Carbon Sequestration Environmental Protection Agency Global Warming Agriculture and Climate Change: Greenhouse Gas Impacts on Agriculture, http://epa.gov/ Mitigation Opportunities and the 2007 Farm climatechange/effects/agriculture.html Bill. Evan Branosky and Suzie Greenhalgh. World Resources Institute Policy Note. March Pew Center on Global Climate Change, 2007. http://pdf.wri.org/ www.pewclimate.org agricultureandghgmitigation.pdf Consortium for Agricultural Soil Mitigation Soil Carbon Sequestration in Agriculture: Farm of Greenhouse Gases (CASMGS), Management Practices Can Affect Greenhouse www.casmgs.colostate.edu Gas Emissions. Dept. of Land Resources and Climate Friendly Farming, Washington State Environmental Sciences, Montana State University Center for Sustaining Agriculture University Extension Service. Perry Miller, and Natural Resources, http://cff.wsu.edu Rick Engel, and Ross Bricklemyer. http://msuextension.org/publications/ Pacifi c Northwest STEEP - Solutions to Environmental AgandNaturalResources/MT200404AG.pdf and Economic Problems, http://pnwsteep.wsu.edu Using Agricultural Land for Carbon Sequestration. ClimateandFarming.org, Purdue University. Andrea S. Bongen. www.climateandfarming.org www.agry.purdue.edu/soils/Csequest.PDF Soil Carbon Center at State University, Contracting for Soil Carbon Credits: Design and Costs www.soilcarboncenter.k-state.edu of Measurement and Monitoring. Department of Agricultural Economics and Economics, Reports Montana State University Department of Soil Harnessing Farms and Forests in the Low-Carbon and Crop Sciences and Natural Resource Economy: How to Create, Measure, and Verify 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 www.climate.montana.edu/pdf/mooney.pdf Defense. Duke University Press. Durham & Multiple Benefi ts of Carbon-Friendly Agricultural London. 2007 Practices: Empirical Assessment of Addressing 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. www.iatp.org/iatp/publications.cfm?accountID= iastate.edu/publications/DBS/PDFFiles/ 258&refID=29793 03wp326.pdf

Appendix How to get involved in voluntary contract expectations and verifi cation policies. Review private carbon markets all of these items with carbon aggregators before decid- ing to enroll. The future of the voluntary carbon market remains to be seen. Currently, farmer payments from carbon Eligibility offsets alone are not substantial enough to rationalize decisions for 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 specifi c projects (Farmers ing in any type of carbon credit program, however, it Union, 2008). Different aggregators might have different is important to understand eligibility requirements, requirements for eligibility, enrollment and contracts. www.attra.ncat.org ATTRA Page 15 • 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 ap propriate management practices commit to continuous conservation tillage on enrolled land (Agricultural and Food Policy Center, 2008). for at least fi ve 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. or other hayed Contracts are based on a fi ve-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 fi ve 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 aggrega tor 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 is intended. point or pay for the same amount of carbon at mar- Methane off set: 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). Verifi cation Finding an aggregator Once a project is approved, the aggregator is responsible Several aggregators are located across the country for obtaining independent verifi cation by an approved to help farmers and ranchers enroll in carbon offset verifi er to ensure the actual greenhouse gas sequestra- projects. The following aggregators provide Web sites with detailed information on contracts and enrollment. tion. A project is subject to initial and annual verifi cation For a full list of carbon aggregators for the Chicago for the duration of its contract with the Chicago Climate Climate Exchange, visit their Web site at www. Exchange (Chicago Climate Exchange, 2009). chicagoclimatex.com. • National Farmers Union Carbon Credit Program, http://carboncredit.ndfu.org • National Carbon Offset Coalition, www.ncoc.us • Pacific Northwest Direct Seed Association, Agriculture, Climate Change and Carbon Sequestration www.directseed.org/carbontrading.html By Jeff Schahczenski and Holly Hill NCAT Program Specialists How to enroll © 2008 NCAT You will need to provide the following information to Holly Michels, Editor enroll 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 www.attra.ncat.org/attra-pub/carbonsequestration.html or the tract. www.attra.ncat.org/attra-pub/PDF/carbonsequestration.pdf • Document of management practices, such as IP338 Slot 336 program forms for croplands, grass and forest Version 012309 management.

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