Should you sell carbon credits? Maybe, depending on your farm size, type and evolving management practices.

By Debbie Reed

When your business is conducted outdoors, you are particularly vulnerable to global climate change. Such is the case with agriculture, a business that is particularly vulnerable to any change in climate or weather.

But agriculture can play a key role in helping reduce U.S. greenhouse gas (GHG) emissions while offering multiple ancillary environmental and economic benefits.

Policy matters. GHG mitigation policies must specifically reward agricultural mitigation practices and technologies that reduce GHG emissions or increase carbon sequestration (soil carbon absorption) and thereby provide a source of income for farmers. Offset credits represent the best policy option for agriculture in a cap-and-trade program. Offset credits, which are awarded to unregulated (“uncapped”) entities for emissions reductions and can be sold to regulated (“capped”) entities to help them meet emission reductions obligations, can achieve substantial emissions reductions early on at lowest cost for society.

Offsets are particularly important in the early years of cap-and-trade policies, as a transitional strategy, because they produce low-cost GHG emissions reductions while new energy technologies are being developed.

The livestock sector generates GHG from three broad sources: nitrous oxides (N2O) and methane (CH4) from livestock and carbon dioxide (CO2) fluxes from grazing lands. Reduced emissions of these gases and increased soil carbon absorption (carbon sequestration) benefit society and agriculture if they are rewarded as offset credits.

Soil carbon sequestration. On grazing lands, improved management practices can build soil carbon stocks. The use of perennial grasses or legumes, improved grazing management practices, fertilization and irrigation can build and maintain soil carbon. So can converting cropland to grazing land. Grazing lands represent the largest land use category in the United State, and retention and protection of carbon stocks on grazing lands should be a priority. The ancillary benefits of increased soil carbon include improved air and water quality, improved ecosystem services, reduced flooding, and enhanced wildlife habitat and biodiversity.

Nitrogen management. Livestock manure collection, storage and management practices affect how much nitrous oxide is emitted and thus a source of offset credits. Practices that reduce N2O emissions include:

• Using anaerobic lagoons and liquid manure handling systems.
• Targeting land applications of manure to crop nutrient needs and avoiding overapplication.
• Applying manure to cover crops or just after crop planting, not during fallow periods or in fall or winter.
• Managing pastureland to avoid overfertilization, such as avoiding grazing on previously fertilized lands and not overstocking grazing lands.

Methane management. Methane from enteric fermentation in ruminant animals and manure management present additional emissions reductions opportunities.

Enteric fermentation differs by age and type of ruminant and feed quality. Grass- and hay-fed ruminants emit more methane than animals consuming grains, legumes and silage. Some feed additives can inhibit methane production in ruminants. Covered manure lagoons concentrate and capture methane from anaerobic digestion, and solid manure management systems can reduce methane emissions (but increase nitrous oxide emissions). Land application of manure with minimal storage time (i.e., daily hauling) reduces methane production, as does keeping storage tanks cool.

The Chicago Climate Exchange (CCX) awards offset credits to agricultural producers for methane captured by anaerobic digesters for animal manure and for soil carbon sequestration from conservation tillage activities and improved grazing land management. Some climate change policies in other parts of the United States have incorporated some agricultural activities for potential offsets credits, too.

Farmers and agribusiness professionals must engage in the development of policies that include offset credit opportunities for animal agriculture.