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Agriculture has never been at the center of greenhouse gas reduction efforts. But agricultural emissions – which account for about 10% of the U.S. total – are increasingly monitored as Democrats take the reins of agricultural policy and farmers themselves become aware of the threats of climate change. One strategy in particular is gaining attention this year: encouraging farmers to view emission reductions and carbon sequestration as potential sources of income.

The idea is quite simple. Farmers would take measures to reduce their carbon production, for example by reducing tillage to avoid releasing carbon from the soil, planting cover crops to retain carbon in the soil, applying manure treatments and “digesters” to limit methane emissions and by using nitrogenous fertilizers more precisely for less nitrous oxide emissions. In return, they could sell credits to companies looking to reduce their own climate footprint. Private markets for such credits are already developing, and Congress took steps to encourage similar trade in the 2008 Farm Bill.

But much about this concept remains to be elucidated, including the fundamental question of how to measure the climate value of various agricultural practices. Here, the US Department of Agriculture could help. A Senate bill introduced last year would direct the USDA to create standards to measure the effectiveness of climate protection measures on farms, certify people to help farmers take those measures and verify their value, and to work with the Environmental Protection Agency to monitor private carbon. credit markets.

Such exchanges could go a long way in encouraging farmers to reduce their emissions and sequester carbon. But they will only work if regulators can guarantee that they will actually deliver substantial climate benefits. The danger is that a carbon credit system could instead mainly allow airlines, investment funds, energy companies, agro-industries and other companies to excuse their own greenhouse gas emissions. by buying cheap and largely meaningless compensations.

By setting measurement and verification standards and monitoring private markets, the USDA can maximize the potential of “carbon cultivation”. It can also extend the benefits beyond large farms, which can most easily demonstrate emission reductions, to smaller farms – helping them participate in collective efforts. If such measures prove to be reliable, the Biden administration’s proposal to create a government ‘carbon bank’ – which would buy credits from farmers for a guaranteed price per tonne – could provide a powerful incentive for farmers, large and small. small.

Carbon credits alone will not be enough; they should be seen as a complement to other efforts to encourage climate-friendly agriculture, including existing USDA programs that help farmers finance conservation efforts (which also improve soil health and yields). crops) and Department of Energy research on carbon capture in soils. Congress is also expected to allow improved terms on loans and reduced premiums on crop insurance for farmers that limit emissions (and water pollution) and conserve carbon.

That said, carbon trading holds great promise for limiting on-farm emissions – as long as it is based on verifiable practices that will allow markets to accurately assess credits. The first step is to get the right data.

Bloomberg Notice

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