How green you grow it could earn some green
Time to broaden that energy portfolio and begin thinking about all things related to greenhouse gases generally and carbon specifically. While corn and soybean growers gnash their collective teeth over the administration’s painfully absent biofuels policy and EPA’s seeming continuing love affair with small refinery exemptions (SRE), Congress is shifting gears to take on climate change, carbon recapture and how to pay producers for getting on board.
Forward-looking producers need to recognize future marketing won’t be just product-quality based, but will also depend on the environmental friendliness of the practices used to produce the product, whether plant or animal. There’s no lack of ideas on how to make a buck off being environmentally friendly. From carbon credits sold by farmers and ranchers to government-blessed transferable tax credits on carbon sequestration, all ideas are on the legislative table.
Sen. Debbie Stabenow (D, MI), ranking ag committee member, enlisted Sen. Mike Braun (R, IN), in throwing down the first bipartisan climate change marker, capitalizing on increasing agriculture and environmental group support of the notion of “carbon credits.” Two House Agriculture Committee members – Rep. Amy Spanberger (D, VA) and Rep. Don Bacon (R, NE) said this week they’re getting ready to drop a companion bill to the Stabenow/Braun “Growing Climate Solutions Act.”
Over 10 years ago, Congress battled and ultimately surrendered in a very partisan war to enact carbon “cap-and-trade” legislation. That defeat was in part because critics argued such practices victimized farmers and ranchers. This new approach permits farmers to amass and sell on a regulated federal market credits for the carbon they recapture or the carbon they never emit. Credits can be purchased by companies and other entities working to lower their carbon footprints as offsets to emissions.
The bill would create at USDA “a program that will jump-start climate-smart projects on farms, ranches and private forests across the country,” Stabenow said. The department would be authorized to federally certify third-party “verifiers” and technical service providers. Those certified entities could then certify the validity of carbon credit-qualifying on-farm practices.
Enjoying the support of over 50 national, regional and local ag groups, several environmental groups and a bunch of Fortune 500 companies, the bill puts USDA squarely in the driver’s seat in running and regulating carbon credit generation and marketing. A Stabenow press release said the bill is supposed to “help break down barriers for farmers and foresters interested in participating in carbon markets so they can be rewarded for climate-smart practices.”
Last week the full Senate Agriculture Committee met to talk about its bill and hear from those who like the idea of getting paid for recapturing all things carbon. It was the full panel’s first hearing since March.
The American Farm Bureau Federation (AFBF) praised the bill’s intent and strongly supported USDA’s key oversight role in the ultimate success of the venture. The National Farmers Union (NFU) told the panel “the bill allows farmers to help reduce their own impact on the climate while providing income during tough times like we face now.”
The Stabenow/Braun bill would create new USDA “producer-friendly resources” and will help farmers and foresters scale up sustainable practices. Specifically, the bill envisions the following actions: Creating a USDA online “one-stop shop” for producers to teach them about the carbon credit system and credits; establishing a USDA certification for the “private parties” hired to help generate and ultimately sell producer carbon credits; organizes an advisory council to keep the department updated on new developments in the rapidly-expanding carbon market arena, and would a regular report to lawmakers on barriers to market entry, producer challenges, market performance and opportunities for USDA to contribute to the further adoption of voluntary carbon sequestration.
Sen. John Boozman (R, AR), who ascends to the top GOP role next year after Chair Pat Roberts (R, KS) retires, warned any carbon credit generation and marketing system must be guarded so that farmers and ranchers benefit the most, not the major companies who buy the credits or the financial institutions who play in the market.
While there’s little time to get so ambitious a plan through Congress this year, 2021 and the next Congress will likely see some version emerge. Farmer/rancher contributions to carbon sequestration/recapture and mitigating climate change could be a major driver for the next iteration of a Farm Bill, say some lawmakers.