MONTANA CATTLEMEN PLAY CARBON MARKET

The ranchers profiled in this story aren’t sure how much they’ll get for the offsets they’re selling this year. They’re earning the offsets by using rotation grazing, something they would do anyway to protect their pastures. “It’s not a lucrative trade…but it helps.”

One estimate has the average rancher profiting about $300 for every 100 acres.

But sooner or later the US is going to adopt a mandatory cap-and-trade system (see SENATE STEPS UP TO CAP-AND-TRADE) and when that happens, a lot more ranchers are going to be checking out this carbon trading business.

The Executive Director of the Montana offset trading coalition described here added: “…Some folks see it as a license to pollute, but until someone comes up with something better this is the best tool we have in the tool box.”

Carbon offsets: Landowners wave of the future?
Holly Michels. December 9, 2007 (The Montana Standard)

WHO
Drummond, Montana cattle ranchers Randy and Sue Peterson; Ted Dodge, Executive Director, National Carbon Offset Coalition; John Talbott, deputy director/project manager, Big Sky Carbon Sequestration Partnership



WHAT
The National Carbon Offset Coalition (NCOC) has set up a system to help Montana ranchers and landowners participate in and profit from the international carbon-trading market by selling offset credits on the Chicago Climate Exchange.

WHEN
- National Carbon Offset Coalition was set up in 2001.
- US ranchers, farmers and landowners are just beginning to take advantage of emerging markets.

WHERE
- National Carbon Offset Coalition is based in Butte, Montana
- Chicago Climate Exchange participates in global markets.

WHY
- Offset credits are traded like other commodities, rising and falling in value with events, predictable variations and market vagaries.
- A Montana landowner takes steps to cut carbon emissions. Farmers can go to no-till methods, leaing carbon sequestered in his soil. Ranchers can contain or recycle waste or use rotation grazing.
- 1 ton of carbon emissions saved earns 1 offset credit. NCOC sells the credits via the Chicago Climate Exchange to businesses/industries seeking to be “carbon-neutral” by offsetting all their emissions. Eventually, when the US moves to a mandatory cap-and-trade system, the credits will be more necessary and likely more valuable.
- Offsets currently sell for anywhere between $1.80 to $4.10 a ton. They are only available for projects in the works and are overseen by a third party to insure there is no fraud.

There are a variety of ways land can earn carbon offset credits. (click to enlarge)

QUOTES
- Dodge, NCOC: “At this point carbon markets themselves are emerging…There’s an increasing interest and it’s beginning to appeal in terms of value to a farmer or rancher…It’s a way to reduce carbon dioxide emissions modeled after the stock market…We trade carbon just like other stocks on a stock market…Let’s say Ford (Motor Co.) promises to reduce their carbon emissions by 6 percent…Now they can’t capture all emissions they produce and it might be cheaper for them to buy an offset from a rancher in Montana to meet their goal.”
- Sue Petersen: “We have 12 pastures, and the cattle are rotated through them so they don’t hit certain areas very hard…It’s something we would do anyway…We didn’t have to change our management style to apply. We’re very conservation-minded. That’s one reason we divided our place into all these pastures, so we could grow more grass…It really helps because the cows are always on fresh grass. They do better, there’s more grass for the wildlife, it’s healthier for everyone…”
- John Talbott, Big Sky: “[The money] varies so much by management practice. Crop lands sequester more carbon than rangelands…”