A Game Changer for Carbon Farming?

Today’s commercial farming practices are based on mono-cropping, heavy use of fertilizers, tilling, and irrigation. These practices have tripled food production since 1960 and have kept food affordable.

As important as this is, agriculture generates 11%[1] of the U.S.’s GHG emissions and 31% worldwide. Industrial agriculture also destroys the health of our soils, releasing tons of carbon, and producing even more nitrous oxide from the fertilizer, an intense climate warming gas nearly 300x the potency of CO2. To add to this tally, the vast amounts of methane produced by cows and other livestock through their burps and manure amount to 7.1 Gigatonnes of CO2e per year in the U.S. alone. If we are going to meet our emissions reduction target, that number must be reduced substantially – at least 33% by 2030.

But how will we do that and keep feeding a population expected to reach 9.7Bn by 2050? Thankfully, we know how to reduce these emissions. The agricultural practices we need are collectively known as regenerative agriculture, the latest buzzword in climate and agriculture. There is no single definition for Regen Ag. Still, in practice, it involves no-till farming, intercropping, cover-cropping, crop rotation, agroforestry (trees on pasture or fields), and reducing dependence on fertilizer and pesticides, among other applications. These practices focus on improving soil health and, in the process, help store carbon in soils in organic matter and reduce the use of nitrogen- and phosphorus-based fertilizers and pesticides. Many proponents believe that by implementing these farming practices, our soils can create a net carbon sink. They can also help manage water, increase biodiversity, and increase climate resilience to our food system.

But there’s a caveat: transitioning to regenerative practices requires an investment of time (it can take several years to see increased productivity), money, new skills, knowledge, and equipment adapted to the needs of these techniques.

Seeing an opportunity, entrepreneurs have invented several market-based mechanisms to stimulate the transition to “carbon farming” and pay farmers for soil carbon storage services. Organizations such as Regen Organics, Indigo Ag, Nori, and Ecosystem Services were pioneers in setting up experimental programs engaging the farmers in innovative pilots. There are currently over a dozen privately developed standards.

This innovation has created a problem. How do farmers choose which certification to go with? Which standards will investors trust? Measuring soil carbon is complex and variable based on soil composition, vegetation, climate, geography, and a dozen other variables. The science around it is far from settled. In this wild west of carbon farming, too much risk will stall the much-needed transition to regenerative agriculture.

Enter the Growing Climate Solutions Act, a bi-partisan bill supported by over 75 companies, trade organizations, and environmental nonprofit groups. Passed in December 2022, the law aims to achieve the following goals:

• Facilitate participation in environmental credit markets.
• Ensure fair distribution of revenues.
• Increase access to resources and information on environmental credit markets.

Rep. Spanberger states, “Our bill would break down longstanding barriers for farmers, ranchers, and foresters — and it would reward them for embracing smart practices that are good for the land and good for their bottom lines.”

But why not allow the market to continue to invent the best systems? In a capitalist system, the role of competition is to spur innovation, with the best options rising to the top. However, there are times when this innovation gets in the way of functioning markets. Governments set or oversee standards for many things, like the length of an inch, the weight of a pound, the time zone you’re in, and other standards we use every day and never notice. Without these standards, markets gum up, and massive inefficiency ensues. In the case of soil carbon measurement, innovation has created value but also confusion, which could prevent the advancement of one of the highest-priority transformations when we must move ahead with speed and scale.

That’s when standards can be enormously helpful. The last time the USDA created a standard was in 2002: the USDA Organic label, a highly recognized food label (Link), and a tremendous market of USD 188.35 billion and growing at a CAGR of 13%. While having its detractors, without this shared understanding of what defines “organic,” consumers and farmers would be faced with probably dozens of standards competing for the market, ultimately benefiting neither.

Transitioning our entire farming system to Regen Ag is a massive undertaking that must be taken on urgently. However, this relies on farming families to take on both substantial investment and risk. The Growing Climate Solutions Act is one way that the U.S. government can remove a crucial barrier to creating an efficient marketplace for the critical ecosystem services only farmers can provide. If successful, this standard will reduce the risk for farmers and investors and facilitate the needed transition to a regenerative agriculture sector. This could create a prototype or blueprint for others to learn from beyond the U.S. borders.

[1] According to the EPA, agriculture accounts for around 12 percent of U.S. greenhouse gas emissions but can sequester carbon through improved soil practices.

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The next step in getting the Act passed is setting up an Advisory Council to help the USDA guide the program. At least 51% of the Advisory Council must be farmers, ranchers, and private forest landowners, including beginning, socially disadvantaged, limited resource, and veteran members. Other members of the Advisory Council would include representatives from agencies, the agricultural and forestry industries, the scientific research community, non-governmental organizations, and professionals and private sector entities involved in credit markets.