Agriculture, Climate Change and Carbon Sequestration - IP338

Agriculture, Climate Change
and Carbon Sequestration
A Publication of ATTRA—National Sustainable Agriculture Information Service • 1-800-346-9140 • www.attra.ncat.org
By Jeff Schahczenski Carbon sequestration and reductions in greenhouse 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 climate change and carbon sequestration. It also investigates possible options for farmers 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
influence agriculture? .........3
How does agriculture
influence climate
change? ....................................3
Agriculture’s role
in mitigating climate
change ......................................6
The value of soil carbon:
Potential benefits for
agriculture ...............................8
Charge systems:
Carbon tax ...............................8
Cap and trade: A private
market for greenhouse
gas 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 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 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
funded under a grant from the over the 21st century (IPCC, 2007a). These • increase soil evaporation rates; and
United States 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 farm- droughts (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 vation tillage, organic production, improved
our sustainable agri-
culture projects. in average temperature can: cropping systems, land restoration, land use

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 absorb
Pursuing Conservation
Tillage Systems from the burning of fossil fuels, deforesta- more long-wave radiation. Therefore, small
for Organic Crop tion, agriculture and other industrial pro- quantities of methane and nitrous oxide can
Production cesses. Scientists refer to this phenomenon have significant effects on climate change.
as the enhanced greenhouse effect. Several excellent resources and fact sheets
Energy Saving Tips
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 Sustainability
Dimensions Figure 1. The Greenhouse Effect
Source: The National Academy of Sciences. www.climatechange.ca.gov/publications/faqs.html
Ethanol Opportunities
and Questions Natural Greenhouse Effect Enhanced Greenhouse Effect
The greenhouse effect is a natural warm- Increasing the amount of greenhouse gases
Renewable Energy
ing process. Carbon dioxide (CO2) and cer- intensifies the greenhouse effect. 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 effect that has some similarity to the Revolution began.
warming inside a greenhouse, hence the
Sustainable 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

How does climate change will likely extend forage production
into late fall and early spring.
influence agriculture?
• Climate change-induced shifts in
Climate change may have beneficial as well
plant 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 livestock 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
significantly by region. Geography will play temperatures during the winter
a large role in how agriculture might benefit 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

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influence climate change? onserva-
are not necessarily considered. Benefits to tion tillage,
agriculture might be offset by an increased Agriculture’s contribution to organic
likelihood of heat waves, drought, severe
thunderstorms and tornadoes. An increase greenhouse gas emissions production, cover
in climate variability makes adaptation dif- Agriculture activities serve as both sources cropping and crop
ficult for farmers. and sinks for greenhouse gases. Agriculture rotations can dras-
sinks of greenhouse gases are reservoirs of
The U.S. Department of Agriculture carbon that have been removed from the
tically increase 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 soils.
specifically on cropping systems, pasture
and 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 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
Manure management 39.5 44.1 48.3 50.8 45.6
Rice 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)
Other na na na na na
Subtotal (33.9) (30.1) (29.3) (32.4) (31.7)
Net Emissions, Agriculture 496.4 496.7 518.1 503.9 508.4

Attributable CO2 emissions: c 46.8 57.3 50.9 45.5 52.6
Fossil 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 6,787.1
Total 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, [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 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.


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.
3.
4. 2. r b

5.
3. management

4. management

5. c
6.
6. s management

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 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).

Figure 4. Carbon pools in forestry and agriculture. Source: EPA. www.epa.gov/sequestration/local_scale.html

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, reduced


fuel consumption, reduced compaction, Irrigation and water
increased planting and harvesting flexibility,
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 significantly 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 manures 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 efficiency

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organic agriculture could be implemented onservation
with other sustainable farming systems, Improving fertilizer efficiency through farming
such as conservation tillage, to further practices like precision farming using GPS
practices
increase climate change mitigation poten- tracking can reduce nitrous oxide emis-
that conserve
tial. See the ATTRA publication Pursuing sions. Other strategies include the use of
cover crops and manures (both green and moisture, improve
Conservation Tillage Systems for Organic Crop
Production for more information. animal); nitrogen-fixing crop rotations; yield potential and
composting and compost 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, field windbreaks, 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 flow digesters. Anaerobic digestion
converts animal waste to energy by captur-
land use changes
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. Modifications to grazing practices, ate electricity. Additional benefits include
such as implementing sustainable stocking reducing odors from livestock manure
rates, rotational grazing 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.


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,

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“ 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 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 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.

Benefits of a carbon tax for than the net benefits of an inflexible cap”
(Congressional Budget Office, 2008).
farmers and ranchers
A major benefit of a carbon or greenhouse
gas emission tax would be the creation of a
Downside of a carbon tax
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 Stewardship 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
emission-reduction practices or carbon gas emissions in the United States is the

A
tax provides
combustion of fossil fuels. Since agriculture
sequestration 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 cost
able 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 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 benefit 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
profitable 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 efficient. 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 Office report states:
“available research suggests that in the near The market is created by a government
term, the net benefits (benefits minus costs) that sets a limit or cap on total greenhouse
of a tax could be roughly five times greater gas emissions allowed. Companies that


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.com


A limited, privately created and voluntary Figure 6. Conservation tillage soil offset 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
significantly 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 verifiable 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 verifiability, 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 carbon offset truly matches actual carbon
greenhouse 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 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 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 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 specific 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,

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. http://soils.usda.gov/survey/global_climate_change.html

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.


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-
modifications 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 five 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
specific 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 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 sufficiently funded with outreach and

T
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- 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
can be prioritized to different regions of the higher than the Paustian estimate. While
determining how
country 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 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- significant 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
significant 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 field 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 modified cap-and-trade sys-
no-till cultivation operation result in greater tem with the expectation that the agriculture
carbon sequestration? If the scientific 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 base of future climate change
subsidization offer the least expensive way to improvements, there is little doubt that agri-
achieve a specific outcome? culture will play some role in the effort.


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
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pubs/2/519/RR%2008-03.pdf Fourth Assessment Report of the Intergovern-
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resources, water resources, and biodiversity
in the United States. www.climatescience.gov/ 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. 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, Ecosystems and Environment. 118: 1-5.
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Climate Change. www.pewclimate.org/docUp-
jsf?id=102
loads/Agriculture%27s%20Role%20in%20GHG
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for Reducing CO2 Emissions, Congressio-
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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 Organic
Farming: A Solution to Global Warming.
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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
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and Agriculture. www.epa.gov/sequestration/ Soil and Water Conservation. 62(6):367-375.
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Brochure. http://carboncredit.ndfu.org/pdfs/
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to the Fourth Assessment Report of the www.epa.gov/sequestration

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Impacts on Agriculture, http://epa.gov/ Mitigation Opportunities and the 2007 Farm
climatechange/effects/agriculture.html Bill. Evan Branosky and Suzie Greenhalgh.
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Management Practices Can Affect Greenhouse
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258&refID=29793 03wp326.pdf

Appendix
How 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 remains
to be seen. Currently, farmer payments from carbon Eligibility
offsets alone are not substantial enough to rationalize
decisions 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 (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.


• 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).

Verification
Finding an aggregator Once a project is approved, the aggregator is responsible
Several aggregators are located across the country for obtaining independent verification by an approved
to help farmers and ranchers enroll in carbon offset verifier 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 verification
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
Agriculture, Climate Change and
• Pacific Northwest Direct Seed Association,
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
IP338
• Document of management practices, such as
Slot 336
program forms for croplands, grass and forest Version 012309
management.
Page 16 ATTRA

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