CARBON CORNER: New Carbon Opportunities Coming to Market for Agriculture

November 3, 2010 |

by Dawson Williams and Rick Gilmore, GIC Group

Despite a dim future for climate legislation at the national level, efforts at the regional level and among leading voluntary carbon schemes are opening new GHG reduction avenues for agriculture.  The Climate Action Reserve (CAR), which was chartered by state legislation in California in 2001, has just proposed three new agriculture related offset categories, including:  cropland management, nutrient (fertilizer) management, and rice cultivation.

These categories would be in addition to the already established livestock methane and organic waste management protocols.  Once in place, producers could benefit from changing cultivation practices; optimizing fertilizer applications; adopting new seed technologies, which can produce crops with less fertilizer; and introducing cover crops, among other options.

Similarly, the American Carbon Registry (ACR) and the Voluntary Carbon Standard (VCS) are in the process of finalizing new methodologies covering fertilizer management practices on cropland.  The implementation of these new carbon reduction alternatives for agriculture producers presents another opportunity for industries, such as biofuels producers to profit from reductions in their lifecycle footprint by encouraging farmers to adopt more efficient practices and technologies.

Equally important, these three voluntary regimes are relying on industry standards to set performance benchmarks as a means of determining whether an agricultural carbon offset project is additional.  This is a significant difference from the Kyoto Clean Development Mechanism’s approach, which requires every project to determine whether it is truly additional based on its individual economic merits rather than comparing the project with overall industry business as usual standards.

Finally, CAR’s new activities fit nicely with California’s planned launch of a regional cap and trade scheme, currently slated for 2012, as producers would then have a captive audience of compliance entities to whom they could sell their offsets.

Category: Policy

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