Congress and Corporations Push Private Carbon Markets, But Equity and Accuracy Concerns Loom Large
Cover crops made a rare appearance in a presidential address last night. When talking about the climate crisis to a joint session of Congress, President Joe Biden proposed paying farmers to adopt techniques, like planting cover crops, that sequester carbon in the soil.
Agriculture accounts for some 10% of U.S. greenhouse gas emissions. Techniques such as agroforestry, cover cropping, and minimum tillage can reduce emissions by taking carbon dioxide from the air and storing it in the ground. Few disagree that more farms should use climate-friendly practices, but just which practices to use and how to enact them is a major debate.
In the first 100 days of the Biden administration, Congress and the U.S. Department of Agriculture have focused on voluntary carbon trading markets, where polluters looking to offset their emissions can buy credits representing carbon sequestered by farmers. Last week, Sens. Mike Braun (R-Ind.) and Debbie Stabenow (D-Mich.) reintroduced the Growing Climate Solutions Act, which would create USDA systems to connect farmers with federally certified carbon traders.
The bill, which has been revised since last June and has gained broader support, is poised to pass the Senate with 42 bipartisan co-sponsors and endorsements from more than 60 nonprofits and corporations, ranging from the Environmental Defense Fund and the Farm Bureau to Cargill, Bayer, McDonald’s, and even Microsoft. But other farmer and environmental groups fear that carbon markets will not reduce overall emissions and will advantage corporations and the largest farms in the process.
“There’s great skepticism that this is just going to prop up Big Ag and be another pot of money to pay the biggest players in agriculture for making minor tweaks,” says Patty Lovera, policy adviser for the Campaign for Family Farms and the Environment. “This just feels really speculative, like the latest silver bullet that doesn’t change agriculture in the way it needs to be changed.”
Unlike cap-and-trade systems, which also involve trading carbon credits, the Growing Climate Solutions Act would not require anyone to participate or to reach a set emission reductions goal. It would merely facilitate existing private programs run by companies such as Indigo, Nori, and Bayer, that pay farmers for each metric ton of carbon they sequester in the soil through practices such as no-till or cover cropping. These companies then sell credits for farm-sequestered carbon to polluters, often charging a fee for the transaction. They’re banking on growing corporate demand for carbon offsets. A fifth of the world’s largest corporations, including food corporations such as General Mills, Smithfield, and JBS, have made voluntary commitments to reach net-zero greenhouse gas emissions and buying offsets will help them get there.
Proponents argue that carbon markets create new financial incentives for farmers to adopt carbon sequestering practices without substantial government spending or regulation. “This bill empowers farmers to help solve the climate change problem,” Heather Reams, executive director of Citizens for Responsible Energy Solutions, said in a press release. “If enacted, it would provide not only additional revenue streams to our struggling agriculture sector … but also would be a model framework of thoughtful, limited government policy for other industries.”
But opponents say voluntary carbon markets are a dubious and inequitable way to promote climate-friendly farming. For one, there isn’t strong science to reliably quantify agriculture carbon sequestration in order to back up carbon credits. Companies use annual soil tests and models to estimate how much carbon farmers sequester, but this leaves a lot of room for error and overestimation. For instance, studies show that just measuring the top foot or so of soil might overestimate the amount of carbon stored by no-till farming. It is also not clear how long sequestered carbon stays in the soil after a credit is sold. An extreme weather event or plowing land just once can release years of soil carbon back into the atmosphere. These systems may also end up channeling free money to some landowners; for instance forest owners may be paid to preserve trees they never intended to cut down.
Equity is another concern. Opponents argue that carbon markets may benefit only the largest farms and agribusinesses. Most carbon market programs and models are currently designed for larger, monoculture farms – which pose inherent environmental challenges. In 2020, the average farm selling carbon credits to Indigo had 1,300 acres and grew commodity grains or cotton. Indigo did not respond to an interview request.
While these programs could eventually accommodate smaller, more biodiverse farms, the price of commodity carbon is also a concern. If it drops too low, small farms may not be able to generate enough income to cover the cost of joining these programs or implementing carbon sequestering practices.
“What we would be afraid of is essentially the re-creation of another commodity that relies entirely on economies of scale to be profitable, such that small producers generating a couple credits on a hundred acres of land will simply not derive anywhere near the benefit as the giant monoculture [operation] farming ten, twenty thousand acres,” says Jason Davidson, senior agriculture campaigner at Friends of the Earth.
The current going price for carbon is about $15 per ton, which advocates say is not enough for small farms to benefit. The price could drop even further as more farmers enter the market. In fact, a previous attempt to start a private carbon market for farmers, called the Chicago Climate Exchange, collapsed in 2010 when an oversupply of credits crashed prices. But proponents believe there’s more corporate demand for offsets than in 2010.
Either way, agribusinesses stand to gain, especially if credits are cheap. Buying carbon credits allows large corporations to continue polluting and greenwash their products, misleading consumers and competing directly with producers that make more valid sustainability claims. “I think we can envision a future in which some of the biggest meat companies operating [concentrated animal feed operations] stamp net-zero and climate-friendly labels on their meat,” Davidson argues. “This could have impacts on the market as they promote their food as climate friendly, and at the end of the day that leaves that frontline community with no meaningful cleanup.” This especially harms frontline communities of color that disproportionately live near pollution hotspots in both urban and rural areas.
The program could also increase the dominance of agribusinesses by making them government-sanctioned middlemen in private carbon markets. While USDA leaders have expressed interest in creating a federal carbon bank in the future, the Growing Climate Solutions Act would create USDA structures to certify and legitimize private digital agriculture corporations that buy and sell carbon credits. These corporations could use their privileged position to push their other products. For instance, Bayer requires farmers to buy its Climate FieldView digital agriculture platform in order to participate in its carbon market. This could help the dominant agrichemical corporation collect more data on more acres of farmland, furthering its consolidation of the burgeoning digital agriculture industry.
“A large agrichemical company could use a carbon market as a way to get farmers enrolling in their data platform,” explains Davidson. “We’re going to be handing over tremendous data to very powerful companies that have hurt producers and the environment for a very, very long time.”
Davidson and Lovera argue that fixing and expanding existing federal programs, such as the Environmental Quality Incentives Program and the Conservation Stewardship Program, would be a better way to fund sustainable agriculture practices. There’s already high demand for these programs, which support a wider range of sustainable farming techniques with broader benefits beyond just carbon sequestration, including improved water quality and biodiversity.
Other critics reject the very idea of voluntary environmental incentives for farmers and argue that USDA should just regulate farm pollution or make federal farm supports contingent on using sustainable farming techniques. But these policies have become political non-starters against the powerful agricultural lobby. “It is just not culturally possible evidentially to talk about regulating agriculture when it comes to greenhouse gas emissions,” Lovera says. “That didn’t happen overnight; that’s decades of investment by Big Ag in how they will be dealt with by the government.”
What We’re Reading
The world’s largest meatpacking corporation JBS recently bought a Dutch plant-based protein company, Vivera, for $408 million. (Reuters)
The Harvard Food Law and Policy Clinic published a brief with suggestions for reforming USDA’s long-criticized civil rights enforcement. (Harvard Law School)
Critics say Secretary Tom Vilsack’s past failures to stamp out corporate corruption in USDA check-off programs reflect a larger unwillingness to stand up to Big Ag. (The Food & Environment Reporting Network)