Brent Sohngen, Professor of Environmental and Natural Resource Economics, Ohio State University.
These days, it seems, farmers can get paid for all kinds of stuff.
While it’s most common for Ohio farmers to earn a living by growing corn and soybeans, farm revenues have diversified in recent years as increasingly, farm and forest land is used to produce natural gas and renewable energy.
These uses are growing, but they still occupy only a small fraction of Ohio’s 22 million acres of farm and forest land, and they benefit only a small number of farmers.
A new alternative, however, is catching on.
Nowadays farmers can be paid to take carbon out of the atmosphere through practices like conservation tillage, cover crops and tree planting, and hold it on their farms.
These natural climate solutions aren’t new, but a market for them is growing rapidly.
To achieve net zero emissions, it turns out these land-based options are pivotal. Furthermore, they are cheap, and they provide other benefits that society wants, like wildlife habitat, erosion reduction, and water quality improvements.
Because companies like Amazon, Microsoft, and Apple want to become carbon neutral quickly they are investing millions in efforts to increase the capacity of America’s landscape to store carbon. The market is already bigger than $50 million per year, and it’s poised to grow into the billions over the decade.
Excitement about natural solutions doesn’t look like an empty promise, after all US farms and forests already remove over 770 million tons of CO2 per year, or about 10% of our emissions, from the atmosphere.
Current studies suggest that we can increase this by 200 to 300 million tons with an investment of $10 to $20 billion per year.
The big question, though, is whether private markets should be left alone, or whether the government should get involved. The case for private markets is compelling. Today, consumers are driving companies to become green, and the resulting effort to reduce carbon footprints is driving companies to buy carbon credits from landowners.
Sure, the government has experience with programs like this.
After all, they already spend $2 to $3 billion per year on water quality, soil erosion and habitat protection on farms. But creating a new government program that spends $10 to $20 billion per year is a whole different scale. Besides, if government pays for the carbon, don’t they have to create a new program to sell it to businesses?
It’s better to leave the carbon in the hands of farmers and let them sell their carbon to companies if they wish and to let the companies buy it if they want? The private sector seems much better suited to exploit this opportunity.
Some people complain that these nature-based solutions aren’t real at all and that they’ll never work. For over 20 years, a large group of scientists in governments, academics, NGOs and private companies have worked together to develop a strong set of industry standards to guide their development.
Regulatory markets in California, Canada, New Zealand, and Colombia are allowing nature-based carbon credits to offset other emissions using these standards. New government regulation could stifle innovation by companies, landowners, and other market participants, which ultimately will hinder our effort to reduce net emissions.
It’s truly an exciting time to be a farmer these days. Not only are there many new options for profit, but it’s become abundantly clear that today more than ever, the pathway to net zero emissions runs straight through the farm.