Many of you may have read about the emerging carbon markets and ways to get rich. There are policies in place like California’s AB-32 and the United Nation’s Clean Development Mechanism, however even if you earn a mitigation credit and bring it to the market today; there is not too much money to make. The Chicago Climate Exchange, like many global markets, has recently lost much of its value.
What does this mean for farmers and ranchers?
If you own land in agricultural production there are many opportunities to mitigate greenhouse gases. Reduced tillage, planting trees or woody farmscapes, and more efficient nitrogen fertilizer-use are just a few. Many researchers have suggested carbon sequestration as a role for agriculture, but the “elephant in the room” is nitrous oxides (gaseous vapors from N fertilizer application) are 300 times more potent greenhouse gases than carbon dioxide.
Is it worth a management change to mitigate for greenhouse gases?
The answer to this question depends on your operation and market. If a ton of carbon dioxide equivalents continues to trade at $1.25/ton, it is probably not worth it. Many economists predict at $30/ton there will be more activity. This doesn’t matter right now; adopting sustainable practices and banking your credits is a better idea. In the future, it may prove profitable to advertise alternative management, earn and save credits, and explore alternative markets.
Do consumers and the general public see value in alternative management?
The answer to this question remains to be seen. Many people value alternative farming systems such as a number of certified methods. But, the vast majority of agriculture is commodity-based so consumers and the general public have little interaction with industry (outside of the marketplace). On the other hand, there are a growing number of scientists that research the role of agriculture plays in our modern world. It is safe to say consumers and the general public are becoming more educated.
