Agriculture has to take a chunk of the blame for climate change. In the USA, farmers and ranchers contribute about ten per cent of the nation’s carbon emissions, and around 36 per cent of total methane emissions. Within this, crop cultivation, which involves tilling the soil and which leads to the release of some of the carbon locked within, is the most significant contributor of greenhouse gases (GHGs).
Livestock methane emissions are second. Modern industrial methods have, according to the authors of a 2020 technical paper Regenerative Agriculture and the Soil Carbon Solution, ‘accelerated the depletion of soil carbon stocks’. Most agricultural soils have lost 30–75 per cent of their original carbon to the atmosphere; most corn and wheat croplands contain less than 2 per cent of soil organic carbon; the overuse of nitrogen fertilisers has led to rising nitrous oxide emissions; and the intensification of livestock and rice production has increased global methane emissions.
But what was once the problem is now being sold as part of the solution, through the use of so-called 'soil carbon credits'. With the terrestrial soil carbon store estimated to be 3.5 times greater than the carbon found in all living terrestrial plants, agricultural soils are a prime asset for governments seeking to meet the targets of the 2015 Paris Agreement.
The idea is simple. Farmers would be encouraged to adopt greener practices that keep carbon in the soil – this might include planting cover crops to stabilise carbon-rich soils; preventing overgrazing to keep carbon locked in; covering bare earth with mulch to help soils retain water; or encouraging tree growth in pastures. Third-party regulators would verify the amount of carbon sequestered as a result of these practices and then award farmers with soil carbon credits accordingly. Each credit represents a one metric tonne reduction in CO2 or equivalent in another GHG. These can then be sold to private companies seeking to offset their own emissions.
Agri-tech company Indigo Ag is already developing soil carbon programmes in the USA. The investment bank JPMorgan Chase, apparel brand The North Face and retailer Shopify have all recently partnered with the company to purchase agricultural carbon credits. In one article on Bloomberg Green, the soil carbon credit market was described as a ‘gold rush’. In October 2020, protocols for soil carbon credits were approved and published by two of the world’s leading offset standard-setting bodies.
Heavyweight investment bank JPMorgan Chase, the apparel brand The North Face and the retailer Shopify have all recently partnered with Indigo Ag to purchase agricultural carbon credits. Interest is booming, and Bloomberg Green describes the soil carbon credit market as a ‘gold rush’.
Political and regulatory developments have helped the market launch. In the past, it has been difficult to establish standards for soil carbon credits, and so their popularity has paled in comparison to credits from forestry projects. In October 2020, detailed protocols for soil carbon credits were approved and published by two of the world’s leading offset standard-setting bodies, Verra and the Climate Action Reserve. ‘These protocols unlock the industry’s potential to become an immediate part of the climate solution,’ says a spokesperson from Indigo Ag.
In his first address before Congress in April, Joe Biden spoke of paying farmers to grow cover crops to reduce carbon emissions. Nori, a Seattle-based carbon marketplace, says that the Biden administration’s focus on removing carbon from US agriculture has resulted in increased interest from soil carbon projects in the last few months.
There are currently limitations for farmers with smaller acreage, however. Scale adds feasibility to soil carbon projects, and so the market is mostly flourishing in the US and Australia, where farms range from 2000 hectares up to highs of 20,000 hectares. Farmers in Europe – where farms are smaller – have been slower to jump on the bandwagon. Start-up costs can still be impossible for small farms to fork out, meaning there is the danger of larger farms squeezing out smaller ones. Indigo estimate that adding a cover crop costs at least $20 per acre for the seeds, and $15 an acre for planting. Carbonsync, an Australian carbon offset project developer, says that the cost of soil sampling to setup and monitor a project can have an initial cost of $15,000, often requiring more than two decades of commitment to yield credits.
Some governments are creating support mechanisms. This year, the Morris administration in Australia laid out its 2021–22 budget, and promised to deliver $233 million in new funding to improve and protect Australia’s soil. That is helping Australian farmers to cover upfront costs of offset schemes. In the US, the Biden administration has put forward the Growing Climate Solutions Act, which would pay farmers to deliver soil carbon gains to offset emissions elsewhere in the economy. The UK Government includes ‘protecting or improving the quality of soil’ within the stated list of public goods within the Agriculture Act. While scepticism abounds for government-assisted carbon offsetting schemes, a private market for soil carbon is emerging, and it is being nourished by governments seeking to become climate leaders.