Emerging Opportunities for Agriculture in Carbon Markets

The views presented in these blogs are those of the authors.

Agriculture has a critical role to play in addressing the challenge of climate change. Exciting opportunities are emerging for farmers and ranchers to engage in greenhouse gas (GHG) emission reduction efforts that benefit the global community, the health of their land, and their bottom line. Progress in this arena is evident in California: the state's cap-and-trade program is the cutting edge of U.S. climate policy, includes growing opportunities for agriculture, and is closely watched all over the globe.

Earlier this month, opportunities for agriculture in California’s carbon market were highlighted during robust discussions and information sharing among 60 stakeholders from across the U.S. and Canada at the Coalition on Agricultural Greenhouse Gases’ (C-AGG) March meeting in Sacramento (one of three meetings held each year). C-AGG is a multi-stakeholder collaborative forum that promotes development of science-based programs, policies, tools, and decision-support systems to incentivize voluntary GHG emissions reductions from the agricultural sector. We engage the agricultural sector as well as policymakers, scientists, project developers, environmental NGOs, the conservation community, and others in order to develop market-based opportunities for agricultural producers to sell ecosystem service and carbon credits.

During the recent C-AGG meeting, participants discussed progress in California’s cap-and-trade program to allow the agricultural sector to get paid to reduce GHG emissions on behalf of regulated entities in the state. Ken Alex of Governor Jerry Brown's office opened the meeting, noting that the state has made progress reducing GHG emissions and is scoping new ways to reduce emissions beyond 2020 goals. The agricultural sector is becoming more important to the state's GHG emissions reductions efforts due to the capacity of working lands and soils to store carbon. With $850 million in proceeds this year from carbon allowances sold under the state's cap-and-trade program, the GHG Reduction Fund was used to allocate $12 million to the Department of Food and Agriculture's (CDFA) Diary Digester R&D Program and $10 million for CDFA's State Water Efficiency and Enhancement Program, which targets on-farm water savings and GHG reductions.

The Air Resources Board (ARB) then presented an update on the state's first crop-based offset protocol, the Rice Cultivation Offset Protocol, which goes to ARB's Board for adoption in June 2015. This milestone for agricultural offsets within the California program represents years of investment by ARB and others, including a great deal of public dialogue and regular discussions during C-AGG's three annual national meetings. Many C-AGG recommendations to help make implementation of the Protocol more cost-effective for farmers and project developers have been incorporated into the latest draft, including the use of process models to cost-effectively measure and monitor GHG emissions reductions, a risk-based and randomized sampling approach for verification, and project aggregation to allow participation of multiple farmers in a single project. These constructs can establish critical precedents for future land and agricultural offset protocols in California, particularly as offset credits are predicted to sell at double the current $11/ton of carbon equivalent in a few short years.

ARB also provided an overview of their new focus on short-lived climate pollutants, including methane, which has led to a fresh look at the role of California dairies in future GHG mitigation efforts. ARB is seeking ways to incentivize the construction of more methane digesters on the approximately 1,500 dairies in the state. C-AGG urged them to explore other voluntary mitigation strategies for dairies and to engage with the Innovation Center for U.S. Dairy, which has been a leader in the U.S. agricultural sector in GHG mitigation and sustainability efforts. ARB's release of a concept paper on the issue next month will be followed by public workshops. The approach taken in California will likely have impacts for other parts of the sector in the future, and C-AGG urges everyone in the sector to submit comments on the concept paper to ARB. A voluntary, diversified approach crafted jointly with the dairy sector that provides funds from the Greenhouse Gas Reduction Fund, harnesses the innovative spirit of farmers, and provides cost-effective, user-friendly technologies and practices to enhance productivity and income is a sure bet for GHG mitigation and an economically viable agricultural sector.

C-AGG looks forward to continuing the dialogue on how farmers and ranchers can be leaders in climate mitigation efforts. To join our efforts, sign up as a stakeholder at www.c-agg.org and engage in our open meetings, including our next meeting on July 14-15, 2015 in downtown Chicago.

Debbie Reed is the Executive Director of C-AGG.