Two new reports – one from Iowa State University Extension economists and another by the Environmental Defense Fund (EDF) – are calling for more clarity on how carbon markets are working and to what extent they help reduce the impact of greenhouse gases.
“Agricultural soils could remove 4% to 6% of annual U.S. emissions. We need credible, consistent and cost-effective measurement and verification to know with confidence that soil carbon credits are moving us toward that target,” said Emily Oldfied, lead report author and agricultural soil carbon scientist at EDF, in a press release.
The report – Agricultural Soil Carbon Credits: Making sense of protocols for carbon sequestration and net greenhouse gas removals – was done by EDF and the Woodwell Climate Research Center. They reviewed the 12 published protocols currently used to generate soil carbon credits through carbon sequestration in croplands.
The report highlights three key findings:
Soil carbon protocols take different approaches to measuring, reporting and verifying net climate impacts, and to managing the vital issues of additionality, reversal and permanence. This variation makes it difficult to ensure climate benefits have been achieved.
Until these variations can be resolved, paying farmers to sequester soil carbon will remain an uncertain approach to greenhouse gas mitigation but can still deliver important benefits for climate resilience, soil health and water quality.
Soil carbon sequestration can become an important mitigation strategy if there is agreed upon, credible, cost effective and consistent measurement, reporting and verification behind the credits.
At Iowa State, Alejandro Plastina, an associate professor in economics and Extension economist, compared 11 private voluntary programs, across 26 characteristics, in a new report, “How to Grow and Sell Carbon Credits in US Agriculture.”
The report was co-written with Oranuch Wongpiyabovorn, a graduate research student at Iowa State.
The programs compared include two carbon and ecosystem services credit entities (Ecosystem Services Market Consortium-ESMC and Soil and Water Outcomes Fund), two carbon credit entities (Indigo and Nori), four input suppliers (Agoro Carbon Alliance, Bayer, Corteva and Nutrien), and three data platforms (CIBO Impact, Gradable and TruCarbon), according to the release.
Comparisons are made on such things as payments per new carbon credit, cost of participation, eligible crops, credit verification and much more.
“What we are seeing so far is more a patchwork than a market,” Plastina said, in the release. “There are different rules, incentives and penalties depending on the program.
“The market is still in its formative stage and is very dynamic, focused on testing protocols through small-scale pilot programs, and lacks transparency and liquidity,” he added.
According to the Iowa State report, programs are offering $15 to $20 per carbon credit for pilot program participation, and each company calculates credits differently based on a different set of conservation or carbon sequestering requirements.
While most programs pay per carbon credit, some pay per farming practice, and others, such as the Soil and Water Outcomes Fund, pays per acre for selected farms in selected counties, that are making improvements related to carbon and water quality.
Many of the current carbon programs are pilot projects. “Once those pilot programs go away it will be up to supply and demand to determine the price,” he said.
Iowa State is hosting a webinar about carbon markets and where they currently stand on Aug. 11. The agenda and access information are available here: July Ag Decision Maker.
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