Money from Trees

Rising support for carbon caps means new choices for farmers and landowners.

Growing food and raising livestock contribute more carbon dioxide to the Earth's atmosphere than does transportation, according to the United Nations. Agriculture is one of the leading causes of deforestation, a key global warming contributor. By some estimates, 35% of the Earth's surface (not under ice) is devoted to food production, primarily to livestock cultivation. Bio-waste from cows, goats, pigs and other livestock accounts for roughly 37% of the methane in the atmosphere. Yet, farmers and ranchers will probably be among the first to profit from tomorrow's low-carbon economy.

In a new Duke University report titled Harnessing Farms and Forests in the Low-Carbon Economy, scientists from universities across the United States provide a guide to help farmers and landowners tap into and trade their lands' precious carbon-storing properties.

"Farmers can remove carbon dioxide from the atmosphere and sequester it as soil carbon by changing tillage practices," the editors write in the introduction. "If farmers and forest landowners can be compensated for their actions to reduce emissions or sequester greenhouse gases, they can benefit economically from these efforts."

Using low-till or no-till farming practices and raising smaller animals that produce less waste (such as sheep instead of cows) have measurable impacts on reducing carbon output. Today's farmers and ranchers also have the option of converting their land to carbon depositories or "sinks," by allowing trees to grow larger before logging or by replanting grasslands and forests.

But is there any money in it?

"Recent studies by Kansas State University and others have indicated that carbon [offsets] could be an $8 billion market for agriculture," reports Dick Wittman, a member of the Agricultural Carbon Market Working Group.

The Low-Carbon Economy

However slowly or subtlety, the transition toward a low-carbon economy is already underway. Some 35 developed countries have ratified the Kyoto Protocol, vowing to reduce their carbon output by 5 % to 8% below 1990 levels. One of the most popular methods for meeting reduction goals is the cap-and-trade system, wherein regulators set a total carbon allowance or "cap" for carbon emitters such as electric utilities, factories, or, in the case of the Kyoto Protocol, entire nations. The carbon emitters can then turn to the free market to meet their cap by:

• Investing in cleaner technology or more-efficient business practices to reduce their emissions.

• Purchasing allowances from other emitters that have reduced their CO2 output.

• Buying carbon "offsets," which remove carbon from the air from individuals or entities such as forest owners and carbon-sink operators.

The potential profit for landowners from cap-and-trade may be big. In 2005, the Environmental Protection Agency found that, as the price of offsets rose, the number of farmers and landowners who expressed interest in participating in the offset market grew steadily. But for a trade system to work, governments must enact and enforce CO2 caps. While several individual U.S. (e.g., California, Maryland, and New York) have adopted mandatory carbon reduction goals, neither China nor the United States, the world's two largest emitters of CO2 respectively, has yet adopted caps on carbon emissions at the national level. Observers believe that mandatory emissions caps are a near certainty in the future. In a recent Stanford University poll, 85% of Americans surveyed said that they believed global warming was probably happening, and 73% favored mandatory restrictions on power generators, even if those restrictions resulted in a $10 rise in their monthly electric bill. Only 47% supported the somewhat more lenient cap-and-trade solution. The Duke researchers suggest that, if cap-and-trade were better understood and more rigorously enforced, carbon markets would realize greater public support.

"A comprehensive cap on carbon will guarantee reductions in global warming pollution while stimulating new technologies. Designed well, it will move people to sequester in carbon in the ground and in forests," they conclude.—Patrick Tucker

Source: Harnessing Farms and Forests in the Low-Carbon Economy: How to Create, Measure, and Verify Greenhouse Gas Offsets, edited by Zach Willey and Bill Chameides. The Nicholas Institute for Environmental and Policy Solutions. Duke University Press. 2007. Web site www.dukeupress.edu

Environment
January-February 2008. Vol 42. No. 1

Money from Trees