By MICHELE F. MIHALJEVICH
Indiana Correspondent

JAMESTOWN, N.D. — Uncertainty over U.S. climate control legislation has forced the North Dakota Farmers Union (NDFU) to stop accepting enrollment in a nationwide carbon credit program, the organization’s president said.

Under the program, farmers received credits for utilizing economically and environmentally sound land management practices that reduced or offset carbon dioxide emissions. The credits were traded on the Chicago Climate Exchange (CCX), the only such registry in the United States.

NDFU is still seeking buyers for about six million tons worth of credits, Robert Carlson said, adding if those credits are sold, farmers will receive what will probably amount to a small check.

“There’s not any point to (accepting enrollments) now because there’s no market now,” he explained. “I’m disappointed, but I’m hopeful that the market will reset itself.”

A market that had been averaging about $4 a ton for carbon more recently saw prices fall to five to 10 cents a ton, he noted.

NDFU began its carbon credit program in 2006, and later partnered with the National Farmers Union to manage the program nationally. The program has about 4,000 contracts in 42 states.

About half the contracts are in continuous conservation tillage, or no-till, and about half are in managed rangeland. A few contracts are in forestry. Contracts are for a five-year period.

In addition to continuous conservation tillage and enhanced rangeland, other eligible practices include converting cropland to grasses and methane capture.
The program has paid farmers about $7.4 million, Carlson stated.

Cap-and-trade climate legislation, which would have set limits on emissions from U.S. companies while allowing those companies to buy and sell government-issued permits for those emissions, was passed in 2009 by the U.S. House, but stalled in the Senate.

“The reality is, and all reputable scientists will tell you, the climate is changing and Americans will have to deal with it and reduce emissions of greenhouse gases into the atmosphere,” Carlson said. “Americans don’t want to pay more for energy or inconvenience their lifestyles.”

Farmers and agriculture shouldn’t be left out of any discussions about reducing emissions and “cap-and-trade,” he added.

“Sequestering carbon in the soil is really a smart thing to do. Don’t forget about agriculture’s potential to be an offset of greenhouse gases. Agriculture really has the potential to be a part of the solution.”

NDFU and other similar organizations sell their credits on the CCX, which started in 2003 as a voluntary, legally-binding way for companies to meet emission-reduction goals. If a company emitted less than its goals, it had extra credits to spend, but if it emitted more, it had to purchase credits to make up the difference.

Since it began, CCX participation has included more than 15,000 farmers, ranchers and foresters with more than 25 million acres of land. More than 27 million metric tons of agricultural soil and rangeland have been registered in the CCX offsets program.

While CCX will be introducing a new offsets program later this month, the emissions reduction part of its program, in which companies traded with each other ended last year.

Adding a carbon payment mechanism to a Renewable Electricity Standard would probably be more sellable than a “cap and trade” program, said Burton English, professor and research coordinator in agricultural and resource economics at the University of Tennessee’s Institute of Agriculture.

English and several colleagues published a study last year on the subject.
“Such a project would result in benefits to renewable energy and would reduce carbons. There’s a link between developing a renewable energy sector and the offering of services by agriculture to the environment.”

Whether farmers decide to continue management practices they used while under contract in a carbon credit program depends on the amount of their investment and the amount of revenue, English explained.

Farmers using a digester to capture methane might abandon the technology if they no longer receive money from the program or decide to continue if they’re benefiting from the digester’s energy production, he noted.

The Delta Institute, based in Chicago, is also a member of CCX. They have enrolled nearly 1,400 contracts in 18 states, primarily in Illinois and Michigan, said Ryan Anderson, director of Delta’s carbon program. Delta generated more than $2 million for landowners in the program, and continues to market its unsold credits through a retail site.

Farmers won’t necessarily back off of practices they began or enhanced in order to get into the program, Anderson said.

“Producers will ultimately do what makes economic and ecologic sense for their operation. For example, if runoff is significantly reduced by using conservation tillage without sacrificing yield, they’ll keep doing it. They signed a five-year contract not to till, so they had to change the order of their thinking. That commitment can have a positive impact well beyond the contract period.”