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A once popular program to pay farmers for battling air pollution is waning as industries pass on carbon credits and Congress looks at other options.
Carbon dioxide credits were boosting farm profits a year ago as polluters paid farmers to capture greenhouse gasses through no-till farming or by planting grasses and trees. By not tilling land, farmers leave carbon undisturbed in the ground. The crops they plant over untilled stubble clean the air by consuming carbon dioxide and releasing oxygen.
Payouts to Montana farmers for past years exceed $1 million, but those profits came as credits traded for $7 a metric ton on the Chicago Climate Exchange, a commodities-style market dealing in pollution offsets.
Credits are currently selling for about 40 cents a metric ton, a price that isn’t attracting new farmers. Credits created last year aren’t selling, according to the National Farmers Union, which a year ago touted a program enrolment of 2.8 million acres-enough to offset the pollution of more than 300,000 cars.
Now just a few days away, this year’s deadline for enrolling land in the credit program will go unnoticed by many.
“This is just a guess, but I’m going to say we did around 100 acres of carbon credits last year,” said Scott Kulbeck of the Montana Farm Bureau Federation. “There’s no interest now.”
To date, buying carbon credits to offset pollution has been voluntary for U.S. industries. Hurt by the economy, some of those businesses now see carbon credits as an expense they can do without. Others need fewer credits because factories that aren’t running at full steam don’t pollute as much.
Traders assumed that at some point the government would make credits mandatory, which drove up the carbon credit price on speculation. Congress is working on clean-air legislation, but not knowing what the government will do in the long run has made traders cautious. Proponents say agriculture has a key role in capturing greenhouse gasses.
A year ago, credit interest was high. Cities trying to get in the act were capturing methane from landfills. Livestock producers were installing equipment to capture methane from manure.
“I don’t think anybody’s really interested right now,” said Lola Raska, of the Montana Grain Growers Association. “It’s available, but there’s not much interest.”
There’s still money to be made for the right party, said Ted Dodge of the Butte-based National Carbon Offset Coalition. The business arranges carbon credit deals for the Montana Grain Growers Association and other groups.
“We’ve been in this 12 years. We see this as not getting rich, but getting ready,” Dodge said. “I completed a trade yesterday, generated $60,000 for some people in New Mexico and Texas. Those are real dollars.”
Dodge said he’s confident the carbon credits for agriculture and forest land will have a role in the final version of whatever climate change legislation Congress passes.
Last month, as the House approved its main climate change bill, roles for farmland and forests were added to entice congressional votes. What’s grabbed headlines, though, is congressional focus on cap and trade, which sets limits on polluters, and then allows those who underpollute to sell their unused pollution capacity to others who are over the cap.
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