CARBON TRADING: GOOD FOR THE FARMERS...

Environmental carbon trades offer farmers potential cash
Mike Stark, January 4, 2007 (Billings Gazette)
- Someday soon, farmers in Montana may get extra cash for their environmental good deeds.

- Those that don't till their fields or take other steps that keep carbon in the ground - thus reducing carbon dioxide contributing to global warming - should soon be able to sell those "carbon credits" at the Chicago Climate Exchange.
- No one will get rich, but the practice will set the stage for the day when the United States places a mandatory cap on carbon dioxide emissions and more corporations look for ways to buy credits to offset emissions…the Chicago Climate Exchange will soon allow Montana, Wyoming and Colorado farmers to bundle their carbon credits for sale…
- about 20 Montana farmers have shown interest…Most are wheat farmers who already are planting crops without tilling the soil, which can be more labor-intensive and sometimes involves cutting slots in the field and dropping in seeds…

- Part of the difficulty is that prices are still relatively low and fluctuating, and describing exactly what a carbon credit is - a unit equal to 1 metric ton of carbon - can seem a little abstract…under current prices, a farmer could get $250 to $350 a year for 100 acres that meet carbon sequestration standards…

How it works:

- The Chicago Climate Exchange, operating since 2003, is an attempt at a market-based approach to reducing carbon dioxide…More than 200 corporations, cities and other entities buy carbon credits at Chicago Climate Exchange. Most use the credits to offset emissions in countries operating under the Kyoto Protocol…

- The United States is not a signatory to Kyoto, but increasingly American agriculture is looking to be a bigger player in sequestering carbon and selling credits…

Why it works:

- In Montana, the focus is on storing carbon dioxide deep in underground geologic seams or keeping it in farm soils.
- Plants get carbon dioxide from the air and use the carbon to grow leaves, limbs and other body parts and release the oxygen during photosynthesis.
- Carbon compounds stay in the soil after the plants die and material breaks down. When a plow runs through the soil, it speeds up the decomposition, and the carbon combines with oxygen in the area, releasing carbon dioxide.

- Farming without tilling allows the carbon to stay in the ground. Certain forestry practices and planting alfalfa, grasses and other perennials can also keep carbon from escaping into the atmosphere…
- Right now, the price for a ton of carbon dioxide is around $4. In Europe, prices are dramatically higher where carbon trading is more active.
- No one knows for sure when there will be a mandatory cap on carbon emissions in this country, but most expect it will eventually happen…Montana could be in a good position to sell its carbon credits as demand and price go up…