Understand your options in the carbon market arena
Will carbon farming yield diamonds or charcoal for farmers? The verdict might still be out, but it’s an issue farmers can’t afford to ignore, says Ray Massey, University of Missouri Extension economist.
“There is pressure to restrict emissions from agriculture and/or charge for the emissions of the products you pur-chase, such as fuel, chemicals and fertilizer,” he says. “You want to stay on top of this discussion.”
Carbon markets are exploding, which is creating a competitive marketplace for farmers, adds Steve Cubbage, vice president of services for Farmobile.
“That’s a good thing but be careful,” he says. “This is a long-term contractual commitment that holds tremendous promise, but it is also legally and financially binding. Please, please read the fine print, and please understand that retaining control of the digital data associated with that field is what truly gives it value in this new marketplace.”
Questions to Ask Before Your Sign Any Contracts
What changes will you have to make to participate?
How much time and historical documents will you need?
What is the term of the commitment?
Who has access to my data to prove carbon sequestration?
Can you move credits from one entity to another?
What if you have already implemented practices?
What happens if you don’t meet contract requirements?
Can terms or standards change during the contract?
Will rented land be treated differently than owned land in a carbon market?
How much will I be paid and in what payment form?
Under what, if any, circumstances would I have to return payments received for carbon credits?
Are there force majeure clauses? What happens if weather prevents planting cover crops or compaction requires till-age of a field?
Does a lien attach to my property when entering in a contract?
What happens if the carbon registry goes bankrupt?
Visit our Carbon Innovation Center, which offers details on 14 different carbon markets.
