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Know the West

Climate cash-in

Western farmers and ranchers use crops - and cows - to tap into the carbon market


Seibert, Colo., farmer Curtis Sayles isn't sure what he thinks about global warming.

He practices eco-friendly no-till farming on his 5,000-acre spread because he believes it's good for his soil. Wary of most "environmental" causes, he says, "I'm not about saving the whales."

Nonetheless, last year Sayles enrolled in a program designed to help curb greenhouse gas emissions. He sells the rights to the 1,000 metric tons of carbon his farming methods keep in the ground (and out of the air) through the Chicago Climate Exchange, whose members purchase carbon credits to offset their own pollution. At about $5,000 annually, he isn't getting rich off the deal. But with federal carbon regulations on the horizon, Sayles is betting that prices will rise. If so, he - and a growing number of farmers and ranchers around the West who choose soil-saving practices - may be able to cash in. "We believe this is going to be the world's largest commodity market," says Ted Dodge, director of the National Carbon Offset Coalition, a Montana-based group that gathers and sells farm and ranch offsets to the CCX. In theory, better land-use practices in the West could keep over 19 million metric tons of carbon dioxide out of the atmosphere per year, according to Colorado State University ecologist Richard Conant.

But because switching land-management styles can be expensive, most farmers and ranchers are unlikely to be interested unless carbon prices start rising. And some analysts worry that including farmers like Sayles - who are just continuing to do business as usual - in any market-based system may not lead to real reductions in new carbon emissions.

Agriculture is responsible for about 8 percent of the United States' greenhouse gas emissions. But farmers and ranchers can alter that equation - and create other environmental benefits - by changing how they use their land. Practices such as no-till, where crops are planted without disturbing the soil, slow decomposition and keep more carbon in the ground and out of the atmosphere, says Conant. No-till also reduces compaction and erosion, helping build more biodiverse soils that in turn support added plant growth.

Ranchers can do the same, mostly by reducing the number of cows on their land and rotating them frequently through pastures. This allows the return of native grasses, which suck carbon from the air and store it in their roots. The new grasses also help restore ecosystems punished by years of overgrazing. "The time is now to embrace some of these new approaches that will hopefully encourage sustainable rangeland management in the future," says Newkirk, N.M., rancher Jim Thorpe, whose rotational grazing practices earn him about $15,000 per year for the 3,375 tons of carbon stored in his 12,500-acre spread. "Certainly the opportunity to have another income source is welcome," he adds.

An increasing number of Western farmers and ranchers agree. By April 2008, carbon offsets from at least 2.1 million Western acres were for sale on the CCX, representing about 570,000 metric tons of carbon dioxide kept out of the air per year. (The United States would need to reduce carbon dioxide emissions by approximately 1 billion metric tons to get to 1990 emissions levels.)

There is a catch: Thorpe, Sayles and most of the others enrolled in the current agricultural offset market are not actually making a dent in new emissions. Rather, they're getting paid to do something they've been doing for years. And finding new recruits may be difficult: With carbon prices at only $6 a metric ton, plow-happy farmers and heavy-handed ranchers have little incentive to change their ways.

No-till equipment is expensive, says Sayles, and many farmers are resistant to change. Sayles, who refers to his own carbon credit earnings as "beer money," estimates farmers will need to be paid at least $10 an acre (equivalent to nearly $40 per metric ton of carbon) in order to convert. That could happen, says Dodge. Prices in the European Climate Exchange, which trades carbon under the mandatory European Union Emissions Trading Scheme, are nearing that figure, and the U.S. is inching toward its own carbon cap-and-trade scheme.

But EcoSecurities consultant Mark Trexler, who has worked in the carbon offsets industry for over 20 years, is uncertain whether farmers like Sayles should even be included in the carbon market. Offsets need to be verifiable (meaning the amount of carbon stored can be scientifically confirmed) and permanent. And, he believes, they should be "additional." That means the extra income from selling carbon offsets is what actually enables a farmer or rancher to change land-use practices.

"You do want to have real reductions in carbon emissions," agrees Boise State University economist Sian Mooney. "And paying people to just continue their current practices obviously doesn't result in any additional reductions in emissions."

A strict offset market, which is necessary if the U.S. is serious about combating climate change, might have farmers sign contracts to practice no-till for at least 60 years. That could be a tough swallow for farmers who currently sign five-year contracts. It also probably wouldn't let folks like Sayles and Thorpe, who already employ soil-saving practices, into the system. And farmers and ranchers might have trouble meeting the high standards needed to verify exact emissions, since figuring out exactly how much carbon is stored in various agricultural soils across the country requires detailed, expensive and still-imprecise science.

"It's just not clear how effective carbon markets will be in changing land-management practices," says Trexler. "(But) we absolutely need to find ways to incentivize farmers and ranchers to take carbon into account."

Trexler thinks it might be a good idea to simply pay farmers and ranchers directly to use progressive methods, rather than involve them in the whole carbon market.

"Everybody wants to cash in on this," he says. "(But) at the end of the day, if you let everybody cash in on this in ways that don't actually increase the amount of carbon being avoided, you could have a real problem."

Stephanie Paige Ogburn is a staff writer for the Cortez Journal in Colorado.