馃攳
Why Carbon Credits Are The Next Opportunity For Farmers - YouTube
Channel: CNBC
[1]
This is a good friend of mine's
field. And he's doing the same
[4]
thing I'm doing, growing corn,
right, for harvest. He's just
[7]
doing it a lot differently.
You've got the contrast of the
[10]
the soil versus the corn. You've
got the beautiful rows straight
[14]
down. This is what I envisioned
when I was a kid, of doing when
[18]
I was older is farming just like
this. And when you get into
[22]
regenerative ag, you've got
chaos.
[24]
On Trey Hill's farm in Maryland,
the fields look a lot different
[27]
than the clean, orderly rows of
crops that his friend is
[29]
growing. Unlike his friend, who
tills his fields after fall
[33]
harvest and leaves them barren
for the winter, Hill plants rye,
[36]
turnips, clover and a few other
species of plants in the off
[39]
season so that his fields stay
covered year-round. Known as
[43]
'cover cropping,' this practice
is just one piece of a movement
[46]
called 'regenerative farming.'
The approach focuses on
[49]
replenishing the soils nutrients
and also includes things like
[51]
no-till cultivation, rotational
cattle grazing and using less
[55]
synthetic fertilizers.
[56]
What we do is, after we harvest
our corn or soybeans in the
[59]
fall, we plant a subsequent crop
called a cover crop.
[62]
And that's what we're standing
in right now. But then, when we
[64]
go to plant corn, our planters
will go right directly through
[68]
this and put the seeds in the
ground in the middle of all of
[72]
these flowers, and then we'll
spray the cover crop off, and
[76]
it'll die and decompose into the
ground and the corn will come up
[80]
through it.
[80]
As the cover crops grow, and
eventually decompose, they
[83]
provide nutrients for microbes
and improve the soil's health.
[86]
At the same time, the plants
pull CO2 out of the atmosphere
[89]
and store in the soil.
[90]
Globally, about 25% of our
climate change pollution is
[94]
caused by food and agriculture.
Most of that's because we're
[97]
deforesting places like the
Amazon to create more farmland.
[101]
But also the methane that comes
out of our cattle and rice
[105]
fields is also contributing to
climate change, as is the over
[108]
use of fertilizers and other
things. But regenerative
[111]
agriculture seeks to reverse
that, and not only, kind of, cut
[115]
down the pollution, but maybe in
some cases even soak up some of
[119]
the pollution we put in the
atmosphere, particularly carbon
[122]
dioxide.
[123]
Driven by climate conscious
consumers, a number of massive
[126]
corporations, including General
Mills and PepsiCo are vowing to
[129]
scale regenerative practices
across millions of acres of
[131]
farmland. But can it help tackle
climate change?
[144]
For the last five years, Hill's
planted year-round cover crops
[147]
and refrained from tilling the
soil, which prevents the trapped
[149]
carbon that he's worked hard to
sequester, from escaping back
[152]
into the atmosphere. He says his
yields are comparable to what he
[155]
would have gotten through
conventional farming, but since
[158]
starting to farm regeneratively,
he's noticed that his soil is a
[160]
lot healthier and his crops a
lot more resistant to pests and
[163]
extreme weather such as floods
and droughts. He's also seeing
[166]
some savings.
[167]
In terms of the regenerative,
it's a lot more work in the fall
[169]
because you're adding a another
planting season. But in the
[172]
spring, it's a lot less work. In
the spring, we used to run a
[175]
disk, a plow, and then the land
finisher and then the planters.
[179]
Now we run the planter and
that's it. It's offset a lot of
[182]
our diesel costs, it's offset a
lot of tractor costs, it's
[184]
offset a lot of tillage costs,
all that stuff is expensive. So
[188]
it actually is a much more
efficient way to farm. It just
[191]
there's it adds a lot of
complexity.
[194]
Initially HIll begin forming
regeneratively to appease local
[197]
environmental groups, who were
worried about runoff from farms
[199]
polluting the Chesapeake Bay.
Plus, Maryland has one of the
[202]
most robust cover crop incentive
programs in the country.
[205]
Right now, we get between I
think it's roughly $45 or $50 an
[209]
acre to do cover crops.
[210]
But Hill is also generating
revenue from selling credits
[213]
through Nori, a small carbon
marketplace based in Seattle.
[216]
Lately, there's been an
explosion of private
[218]
marketplaces like Nori and
Indigo Ag. Here, companies and
[222]
individuals eager to offset
their own footprints can
[224]
purchase carbon credits from
farmers who've sequestered CO2.
[228]
But some are skeptical that
companies will use the markets
[231]
as an excuse to continue
business as usual. Still,
[234]
McKinsey estimates that the
market for carbon credits could
[236]
be worth over $50 billion in
2030. The Biden administration
[240]
has also earmarked $30 billion
to help pay farmers to implement
[244]
sustainable practices and
capture carbon in their soil.
[247]
Part of these funds could be
used to create a federal carbon
[249]
bank, which would stabilize the
price of carbon.
[252]
Okay, 10-4 well we can go ahead
and do it then.
[255]
Last year, HIll became the first
farmer in the country to sell
[257]
carbon credits through Nori.
Currently, Nori offers its
[260]
farmers $15 for every metric ton
of CO2 they sequester,
[264]
We put in all of our data for
the farm, our yields were,
[267]
planting dates, what our cover
crops are, what our cover crop
[270]
plant dates are, when our cover
crop was killed, all of these
[273]
different things and we put it
into a model that was developed
[275]
by the Department of
Agriculture. What it ended up
[277]
being is about a ton of carbon
per year per acre.
[281]
Hill says his farm already keeps
records of most of the data
[284]
required by the carbon
sequestration model, which made
[286]
the process easier, but not
every farm does. And keeping
[290]
track of all this data can eat
up valuable time.
[293]
We didn't do every field, it's a
lot of work to get the model
[295]
done. So we took a portion of
what we farm and sold that into
[299]
the carbon markets.
[300]
After paying a third-party
auditor $4,000 to verify
[303]
Harborview's data, Hill has so
far made around $210,000 for
[307]
sequestering just over 14,000
metric tons of carbon over the
[310]
course of five years.
[314]
So that's compost. And it's
basically turning into really
[319]
awesome soil.
[320]
Loren Poncia owns Stemple Creek
Ranch in Northern California.
[324]
Through a partnership with the
Marin Carbon Project, a
[326]
consortium of independent
agricultural institutions,
[329]
Poncia has also adopted a number
of regenerative farming
[331]
practices. These include
applying compost instead of
[334]
chemical fertilizers to pastures
to avoid tilling, and
[338]
periodically moving livestock
from one pasture to another,
[341]
thus giving the grass and soil a
chance to recover.
[343]
We're part of this study, a
10-year study, that had a
[347]
35-acre treatment plot. And
basically what we're seeing is
[351]
we sequester about 3,000 to
5,000 pounds of carbon per acre
[355]
per year. Poncia has already
received state funding from
[358]
California's Healthy Soils
Program to implement sustainable
[361]
farming practices on his ranch,
but says he's not yet ready to
[364]
sell carbon credits on the
private market because of the
[366]
high cost of determining how
much carbon is contained in his
[368]
soil.
[369]
The carbon that we're putting in
the soil has allowed us to grow
[372]
so much more forage that we are
making more money now and
[375]
selling more pounds of protein
now than we did 10 years ago.
[379]
But we haven't gotten to the
point where we're selling carbon
[383]
credits to the open market,
mostly because the value of the
[386]
carbon credits isn't really
worth going through all of the
[389]
process of monitoring and
measuring in order to pay for
[392]
them.
[393]
Current carbon market for
pasture-based carbon
[396]
sequestration is somewhere
between $5 and $10 per carbon
[400]
credit. And in order for me to
get interested, I would be you
[404]
know, more like $80 or $100 a
carbon credit.
[409]
Hill and Poncia agree that
regenerative farming has been
[411]
beneficial for soil health and
their businesses. But the jury
[415]
is still out on how effective
the practices are when it comes
[418]
to mitigating climate change.
For one, setting up a carbon
[421]
market is tricky, because
measuring carbon sequestration
[424]
is hard.
[425]
Back in the 1990s, there was
something called the Chicago
[427]
Climate Exchange, which was
trying to trade carbon credits
[430]
from farmers with companies who
were, very early on, talking
[433]
about greenhouse gas pollution.
And the idea was, back then we
[436]
thought farmers who didn't till
their landscape, didn't plow it
[440]
up every fall, would be
absorbing carbon. They do, in
[443]
the top few inches of the soil.
But then, when we started
[447]
measuring the lower parts of the
soil, we noticed that they
[449]
weren't accumulating carbon as
much. And it kind of became a
[452]
wash. And then, the whole idea
of that market kind of fell
[455]
apart.
[456]
Even today, figuring out how
much carbon is trapped in the
[458]
soil is not an exact science,
[461]
The traditional method is you
take a core, you stick a big
[464]
kind of pole in the ground and
pull up like what's basically a
[468]
long rod filled with soil. And
you take that out and you
[472]
actually stick it in a really
hot oven ,essentially, and you
[475]
bake out the water. But then
eventually you bake out all the
[478]
organic matter, you burn it all
off and measure the CO2 that
[481]
comes out. That's really time
consuming, expensive. And you
[485]
basically get a measurement for
the place you stuck the pole in
[487]
the ground. So you have to then
go do that again and again and
[491]
again across the farm. Because
every little patch of land is a
[494]
little bit different.
[495]
The other option is to use an
algorithm.
[497]
Sometimes, what we do is we rely
on an algorithm that says, well
[500]
based on the topography, the
basic soil chemistry where you
[505]
are, the climate where you are,
and the way you're farming, I'm
[508]
going to go look at 100 other
farms who did something similar
[511]
and give you like a ballpark
number to use as kind of a
[515]
baseline to credit the carbon
that you're putting away.
[519]
Assuming that you get an
accurate number for how much CO2
[521]
has been stored, the next
challenge is ensuring that the
[524]
CO2 will remain in the soil long
term.
[526]
In America, a lot of farmland
isn't owned. It's leased by the
[530]
farmers. And so there's
turnover. So I think as a
[533]
policymaker, members of
Congress, the Biden
[535]
administration and so on, if
they're going to plan to kind of
[538]
pay farmers to do this, or if
companies paid farmers to do
[541]
this in some kind of market, how
are you paying them to ensure
[544]
it'll be there for the next 100
years?
[546]
Nori demands that sellers on its
marketplace sign a 10-year
[549]
contract promising that they
will continue farming
[551]
regeneratively.
[552]
So in Nori's market, the farmers
are signing a 10-year contract
[556]
with us that says that they're
obligated to keep that carbon in
[560]
the ground and they have to
re-verify the data that that
[563]
we're using for quantification,
at least every three years. And
[566]
then at every three year
verification mark, they can sign
[570]
a new 10-year contract.
[571]
Such a long commitment can be
tough for farmers.
[574]
As a farmer, that's a huge risk.
If we get a hurricane in the
[577]
fall, say September, and I have
to harvest after 22 inches of
[581]
rain, I'm probably gonna have to
do some tillage. At least in
[584]
places. What if I don't own the
land? The owners that I rent
[587]
from, t's not typical to get a
10-year agreement because as the
[590]
markets fluctuate, so do the
rental prices. I have some
[593]
owners that don't like this
look. It's their farms and
[596]
they'd like it to look neat and
clean and this is definitely a
[600]
different look than a freshly
plowed field.
[602]
And Hill's not alone. According
to the latest numbers from the
[605]
USDA, around 40% of the farmland
in the US was rented in 2014.
[610]
Hill says challenges like these
are why he's only sold about 35%
[613]
of his fields into the carbon
market.
[615]
The biggest cost, of course, is
time. If farmers have to switch
[619]
the way they're doing things
from what they used to do for
[621]
years, which reliably could give
them productivity and income,
[625]
and have to make some
adjustments. During that time,
[628]
you might not be earning very
much. Or maybe it takes time for
[631]
the farm, the ranch to shift to
getting into kind of settling
[635]
into these new practices. So
that's probably why it'd be good
[638]
to see things like price
supports and government
[640]
assistance for these kinds of
agriculture.
[645]
Coming up with accurate measures
of carbon sequestration and
[647]
figuring out how to keep that
CO2 in the soil long term are
[650]
moot points, unless farmers
agree to adopt regenerative
[653]
practices in the first place.
Nori currently only has six
[657]
farmers who are fully enrolled
onto its marketplace and Foley
[660]
estimates that regenerative
farming is still only practiced
[662]
on less than 1% of the farmland
in the US. In order to gain
[666]
wider adoption, Hill and Poncia
think there needs to be more
[669]
incentives for farmers.
[671]
I think what we need to do is be
able to couple markets together.
[674]
So you know, if we can sell the
$15 credit on the carbon market,
[678]
you know, maybe we can save
another few dollars on crop
[680]
insurance. We're offsetting risk
by growing crops this way. So it
[683]
should save crop insurance money
anyway.
[686]
If the government would
subsidize carbon in the soil
[690]
instead of subsidizing mono
crops across the country that we
[695]
end up exporting overseas
anyway, I think we could
[698]
definitely gain a lot of ground
very quickly. If we could make a
[703]
living selling the carbon, I
would love it.
[706]
As for a federal carbon market,
Hill says that may not be a good
[709]
idea.
[710]
We have to turn over so much
data in order to make this
[713]
marketplace valid, transparent
and true. I don't know how many
[717]
farmers are going to be
comfortable turning over that
[719]
level of information to the Farm
Service Agency.
[722]
Most experts agree that
regenerative farming is
[724]
beneficial and should be
encouraged. But they say that
[727]
it's by no means a silver bullet
for solving climate change and
[730]
should not be used as an excuse
to continue emitting greenhouse
[733]
gases in other places
[734]
If we're paying farmers to
secure carbon from the
[737]
atmosphere as an excuse not to
turn off the dirty power plant
[741]
or to stop some industrial
process somewhere else, that's
[744]
not a good idea.
[745]
Foley thinks we should also
temper expectations of just how
[748]
much carbon farmers may be able
to sequester.
[751]
There's always going to be a
certain limit of land or how
[753]
much the soils can absorb or how
fast they can absorb it. You
[757]
could put a sizable amount of
carbon, maybe the equivalent of
[759]
a few years of our emissions
back into the world soils, if we
[763]
did a massive regenitive push
around the world. And that's
[766]
nothing to sneeze at. But again,
it's not a silver bullet to
[768]
climate change. But the nice
thing about regenerative
[770]
agriculture, despite the limits
of it, is that it has so many
[774]
co-benefits. That it helps the
soils. It helps the farms. It
[777]
helps the watershed. And
ultimately should make farms
[780]
more productive and more
resilient. But the concerns are,
[784]
how big is this really? Let's be
careful about the claims being
[788]
made here and maybe discount
them quite a bit until we're
[791]
sure. Because at the end of the
day, the atmosphere's balance
[794]
sheet is the one that matters,
not ours.
[796]
Hill and Poncia believe that the
success of regenerative
[799]
practices may not be driven by
the government or the private
[801]
carbon markets.
[802]
I really truly believe that it's
going to be consumers that
[805]
demand it of the farmers.
[807]
I think more and more consumers
on a daily basis are voting with
[810]
their dollars, supporting people
like me and other regenerative
[813]
farmers out there that are doing
their best to try and raise that
[817]
nutrient-dense, very health
food
Most Recent Videos:
You can go back to the homepage right here: Homepage