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Carbon initiatives bring more dollars to the pocket

Heather Smith Thomas for Progressive Forage Published on 27 November 2019
Josh Zimmerman bags a soil sample

Carbon is one of the most abundant chemical elements, forming millions of compounds including carbon dioxide (CO2), carbon monoxide, etc. Carbon occurs in all known forms of organic life and is a component of fossil fuels.

The amount of carbon on earth is constant. Paths of carbon in the environment form the carbon cycle. Plants draw CO2 from the air and through photosynthesis combine it with other elements and build biomass. Dead plant or animal matter may eventually become petroleum or coal, which releases carbon when burned.

CO2 is one of several “greenhouse gases” which also include methane, nitrous oxide and water vapor. Concentrations of greenhouse gases in the atmosphere are determined by the balance between sources (emissions from human activities and natural systems) and sinks (removal from the atmosphere by conversion to a different chemical compound or absorption by land or water). CO2, for instance, can be captured by plants and converted into biomass, and some of that carbon can be sequestered in the soil as organic matter.

Dr. Mark Liebig, Research Soil Scientist, USDA Agricultural Research Service in Mandan, North Dakota says agricultural practices play an important role in taking up CO2. “If farmers/ranchers have healthy, productive pastures, the plants can take up CO2 through photosynthesis and translocate it into the soil, where it can become part of the stabilized pool of organic matter,” Liebig says.

“Soil organic matter is about 58% carbon. When we build organic matter, we remove a greenhouse gas from the atmosphere and improve soil health, making the land more resilient to external stresses like drought,” he says. Increased organic matter in the soil, coupled with plant cover as “soil armor” can capture and retain more moisture, rather than having runoff and erosion.

“Whether you are a livestock producer or crop farmer, the principle is the same: You want to take up CO2 with plants and transfer it to soil organic matter. If the carbon accruals are greater than the losses, over time you’ll see improvements in soil health,” Liebig says.

Carbon initiative programs give farmers and ranchers more incentive to sequester carbon. “Their contracts specify adoption of a specific management practice. For some producers, these management commitments are something they’ve already been doing, but this is additional encouragement for them to stay the course,” he says.

Carbon credits

A marketplace has developed around CO2 mitigation, enabling companies and industries which emit CO2 to purchase carbon credits from businesses engaged in offsetting activities, such as production of renewable energy through wind farms or biomass energy, energy-efficiency projects, etc.

Money the company pays for these credits is utilized to support projects and businesses (including agriculture) that help sequester carbon. In general, a carbon credit allows the purchaser to claim reductions of 1 ton of CO2. There is a voluntary carbon offset market, but some larger companies are required by law to purchase carbon credits to offset their carbon-producing activities in a “compliance market.”

Kirsten McKnight, manager of development at NativeEnergy (a carbon credit provider in Burlington, Vermont), says one misunderstanding about the carbon market is people thinking companies who purchase credits then have the “right to emit” CO2. She says companies don’t buy credits so they can keep emitting. “They buy carbon credits when they set carbon reduction goals, and when there are certain emission sources they aren’t able to reduce,” she says.

“For example, transportation creates emissions that aren’t easily reduced and can’t be eliminated entirely in our fossil fuel economy, regardless of how motivated a business might be in trying to reduce these. Carbon offsets is the only tool to verifiably and effectively offset those emissions,” says McKnight.

Where grazing fits

Well-managed rotational grazing can qualify for the voluntary carbon credit market, according to Chris Mehus, ranching program director at Western Sustainability Exchange (WSE). WSE’s Montana Grasslands Carbon Initiative investigates and promotes ways farmers and ranchers can create healthy soil by increasing carbon content through regenerative agricultural practices.

When ag producers enroll in one of these programs, the fine print may be hard to understand. “Many of these initiatives read like a legal document; it’s important to review them carefully,” says Liebig. “I had experience with a carbon initiative about 12 years ago with the National Farmers’ Union and Chicago Climate Exchange. Skeptical perceptions from crop and livestock producers spurred dialogue between initiative managers, scientists and producers.

An improved understanding of agriculture’s effect on the carbon cycle, along with the long-term benefits of carbon sequestration on soil health, was a lasting impact of the initiative. The intent was to find ways to boost farm economy and do good things for the environment,” says Liebig.

Dr. Jason Rountree at Michigan State University is part of a group doing a wide-scale project on carbon sequestration and the amount of carbon regenerative farms and ranches are actually putting into soil. He says carbon trading goes back to about 2008 when legislation came very close to creating carbon marketing. “Then, because of the economic downturn, this effort got tabled and has never returned via policy channels. Over the past dozen years there have been discussions to identify opportunities to look at carbon as a monetary equivalent in some level of trade. It’s been slow to start, for many reasons, including the cost of monitoring,” he says.

A new company, Indigo Ag, is trying to launch an initiatives program and looking at potentially paying $15 per metric ton of carbon for a sequestration value. “But it isn’t just about being paid for an action to put carbon in the soil. The real payoff is improved profitability from better soil health and increased production. A number of programs pay producers for carbon sequestration. The Noble Foundation in Ardmore, Oklahoma is looking at ecosystem service markets. There are some large-scale entities interested,” says Rountree.

“McDonalds, Tyson, General Mills, JBS and others have made pledges to lower their CO2 emissions by 30% in the next 30 years. These opportunities are probably some of the largest in terms of how to offset overall emissions of the food production system. General Mills is investing millions of dollars to develop more regenerative oat supplies for their cereals,” he says.

Measuring carbon

It’s hard to accurately measure carbon levels in soil. To put a monetary value on carbon, there must be third-party investment to measure it, since people must be assured that what they are purchasing is actually there.

“Costs of measuring or monitoring must come down and technologies need to be better. We are very close to having less-expensive technologies to measure soil carbon; there is excellent work being done at Yale University in carbon monitoring, with their program called Quick Carbon. Another group that’s just starting, called Openteam, is trying to get these technologies adapted faster. New funding through FFAR (Foundation for Food and Agriculture Research) and other groups is helping launch this,” explains Rountree.

“There are better technologies already available, like ultrasound-type sonar, but they are more expensive. A large ranch in the western U.S. has great variation in soil types and must be able to account for all these differences. That means digging a lot of holes to test soil and probably a six-figure investment to do that. Better ability to monitor soil carbon is coming, but it must be less expensive,” he says.  end mark

PHOTO: Josh Zimmerman bags a soil sample to measure carbon sequestration in Montana. Photo by Chris Mehus.

Heather Smith Thomas is a freelance writer based in Salmon, Idaho.

Western Sustainability Exchange

Chris Mehus, ranching program director at WSE, says this nonprofit organization is now in its 25th year. “We have always been working to help innovative producers generate better and more diverse income from innovative practices that are better for the environment – and more efficient and effective for themselves. We’ve been involved with a lot of programs to help farmers and ranchers with better grazing practices,” he says.

WSE is partnering with carbon project developer and credit provider NativeEnergy to create a program to pay ranchers and other land stewards for sequestering carbon on grasslands through regenerative grazing practices. NativeEnergy provides upfront funding for fencing and water developments to facilitate rest and rotation. Contracts include 20 years of payments for carbon sequestered.

“NativeEnergy approached us four years ago to discuss creating financial incentives for ranchers to adopt rotational grazing and make a 30-year commitment to practices that sequester carbon,” says Mehus. “We’ve entered a pilot project with NativeEnergy. They have been involved with renewable energy and reduced carbon emissions for many years with their energy products/methane projects and some alternative cropping. They are looking at many ways to reduce energy consumption and help companies address their carbon footprint and sustainability issues,” he says.

“The current project involves sequestering more carbon in soil through healthier plant communities, healthier root systems and healthier soils. The carbon sequestration model we’re using was developed by a professor at Syracuse University, Mark Ritchie. His soil science organization is called Soils for the Future. We had interns out here this summer taking soil samples on 170 sites across the eastern two-thirds of Montana. This model is being validated with data collection by this study, through all of these sites, to apply directly to our specific environment, growing conditions and soil types,” says Mehus.

All this data, as well as site-specific factors like moisture, soil type and vegetation type, will be used to compare the amount of carbon in the soil (and relative soil health) with the past grazing management. “Once that model has been validated, it will be used to estimate the amount of carbon that the rancher could sequester on his ranch by changing grazing practices.” This is how the amount of carbon credits that can be sold is calculated.

“We are currently in the trial phase, but we had eight companies come out here in June interested in possibly purchasing these credits. They met the ranchers who are currently doing different grazing practices to understand how it is changing their operations and witness the wildlife species and diversity of animals and plants,” Mehus says. This was a way to connect the people at both ends.

Since that meeting, some of those companies have stepped forward to participate. “At this point, NativeEnergy has signed contracts with four ranches, totaling about 35,000 acres, with 30-year contracts. These are business arrangements and not any kind of an easement. It is a legal contract, however, and states the rancher intends to improve grazing management on his/her property, keep records of that management and submit those records to NativeEnergy each year. It also gives permission for them to come and test the soil periodically. In exchange, the rancher will be paid for the carbon actually sequestered as a result of the improved grazing practices,” says Mehus.

“NativeEnergy (the project developer) has an agreement with the landowner to sell the credits on their behalf to companies that purchase carbon credits. They work with the companies and contract with us to recruit and work with landowners on all the documentation that needs to be provided in order to make these contracts valid and verify the carbon reductions to the carbon standards,” he explains.


A number of carbon credit seekers (foundations, nonprofit groups, businesses) are looking for programs like this to buy carbon credits. The more organizations purchasing carbon credits from the project, the greater the number of ranchers who can participate in the program to sequester more carbon. WSE hopes to enroll 100,000 acres by July 2020. Farmers can adopt rotational grazing practices voluntarily, but the added bonus of financial capital to help them transition their farming operations could help them decide to utilize regenerative agriculture and make it become more mainstream.