Arguably one of the federal government’s most ambitious attempts to combat climate change, the concept aims to use market forces to produce sharp reductions in the human-made emissions that are the primary cause of global warming.
But while the idea is popular with some sectors of the environmental movement that see it as a sign of the seriousness of Biden’s commitment to tackle global warming, it’s facing doubts from both the right and left flanks of the agriculture lobby.
In addition, various groups representing industries as wide-ranging as food conglomerates and venture capital-backed carbon market operators have hit up offices on Capitol Hill and those in Biden administration to share ideas and raise concerns about how potentially billions in investment would be spent.
The American Farm Bureau Federation, the most influential farm group in Washington, indicated recently that it has some hesitations about the carbon bank idea, even though it could put millions of dollars into the coffers of its members.
“I’ll admit to you, I’m not totally comfortable yet,” said American Farm Bureau President Zippy Duvall at a House Agriculture Committee hearing on climate change. “There may be a time in the future where we as an organization may not support it, but we’ve got to have a conversation about what that looks like.”
The questions reflect the difficult politics of climate change, questions about the science of carbon sequestration, and fears that big food and agriculture companies will use the scheme as an inexpensive way to avoid reducing their own carbon footprint. Farmers and ranchers worry they won’t end up benefiting much from the potential gold rush, as corporations and financial middlemen race to get into the markets.
Though specifics of the plan haven’t yet emerged, the concept is a novel one: With scores of major corporations having made grand promises about achieving carbon-neutrality, USDA would help offer a chance to buy credits to offset their pollution by supporting farmers who plant an extra batch of crops such as cereal rye and clover or make other on-farm changes to help absorb carbon dioxide into the soil. Such agriculture techniques would bring about a net reduction in greenhouse gases.
Nonetheless, the benefits of switching to more climate-friendly practices could quickly disappear if farmers deviate from recommended actions. For instance, disturbing soil could release all the accumulated carbon back into the atmosphere — an issue USDA could prevent by serving as referee, carbon bank advocates say.
Farmers shift focus on climate
Despite the concerns about its effectiveness, the idea of a climate bank has gradually gained a following within the agricultural world, which is often reflexively skeptical of government programs.
Many of the big trade organizations representing cash-crop and livestock farmers publicly banded together at the end of last year and backed a list of federal policy recommendations that include a USDA carbon bank. The Food and Agriculture Climate Alliance recently announced that it had expanded its membership from the original eight founding groups to more than 44 in total, accounting for a sizable chunk of the far-flung ag lobby.
The shift is reflective of both a growing awareness of the dangers of climate change — spurred by several years of floods and droughts that wreaked extreme havoc among farmers and ranchers — and a sense that farmers might be able to profit from being part of the solution by reducing carbon dioxide in the atmosphere.
There’s also been pressure from food companies to change their practices. Big brands like Danone, Smithfield and Nestlé have all pledged drastic reductions to greenhouse gas emissions and can’t meet their goals without help from the farmers who supply them.
But even as they move tentatively toward supporting a carbon bank, many individual farmers remain uncomfortable with alarmist rhetoric about climate change, believing that even acknowledging the human role in global warming would open the door to heavy-handed policies that could jeopardize their livelihoods.
Nonetheless, Biden and Agriculture Secretary Tom Vilsack have unapologetically framed their agricultural proposals as climate-change initiatives, part of the president’s “whole-of-government approach” to addressing the climate crisis. Administration officials have been careful to avoid political landmines by emphasizing that any USDA carbon initiative must be “producer-led” and “incentive-based” with “voluntary” participation — language intended to appeal to an extremely regulatory-averse demographic. But that may not be enough to win over most farmers.
“For some people it’s probably not going to be very attractive because [climate change] has been so politicized,” predicted Ernie Shea, a carbon bank supporter who is CEO of Natural Resource Solutions and the former head of the National Association of Conservation Districts, which focuses on preserving natural resources.
Rather than tout the effect of sinking more carbon into the soil, the administration might just as easily stress the way planting restorative crops would improve water quality and achieve other conservation aims that farmers readily accept, said Fred Yoder, an Ohio-based farmer and carbon bank backer.
“It’s short-sighted,” he said of the administration’s branding efforts. “If you just strictly leave it as carbon, you’re leaving it short.”
Vilsack, in an interview earlier this month, indicated that the Agriculture Department will take a cautious approach in designing the program and spend the first 100 days under his leadership collecting input from farmers.
He said that carbon credits used in private markets have not worked “particularly well” and it’s important that the administration understand what went wrong before standing up a carbon bank at USDA.
“There is no doubt that as we structure and design this program, if we are to have a carbon bank, it has to work for farmers of all sizes,” he said. “It has to work for farmers in all parts of the country. It can’t just be designed for a particular subset of American agriculture if it’s to be successful.”
Criticism from the left and the right
But even if farmers ultimately accept the idea that they could benefit financially from farming differently, the left wing of the agricultural lobby remains unconvinced that setting up a carbon bank within the Agriculture Department is the wisest approach to tackling climate change.
That comes alongside a broader debate over whether the department has the authority to pull this off without explicit congressional approval to use a certain set of funds deployed by the Trump administration to help farmers endure trade war backlash, among other purposes.
Some want to see the federal government better use existing environmental incentives that already cost taxpayers billions each year. For instance, it could boost conservation stewardship programs, in which state and federal programs pay farmers directly to use certain practices or plant cover crops.
It also could involve enhancing private-sector carbon credit markets that have emerged in recent years amid investor demands that multinational corporations, including major agribusinesses and food companies, reduce their operational and supply chain emissions. Those companies fund credits to offset their own emissions and farmers receive payments for climate-friendly practices. Private marketers like Indigo Agriculture, a Boston-based company, administer the credits while monitoring and verifying emissions reductions for a fee.
Advocates of a federal carbon bank see it as crucial to setting common standards for the Wild West of carbon credits, which are of varying quality and price points. They say harmonizing disparate credit systems and developing uniform ways to account for measuring soil carbon could prove useful and inspire wider adoption, in turn reducing administrative costs to help expand credit offerings.
Chris Harbourt, who leads Indigo’s carbon business, said the administration has given little information about what role its carbon bank will ultimately play. Harbourt said, however, that the mere existence of a federal program could help streamline disparate carbon credit markets.
“What I [would] really like to see is something that comes out of the government that’s supportive of that, and additive to it, and operates in the best interest of the farmer,” he said.
But farmers worry large agribusinesses and food companies would use their political prowess and market heft to profit from the credits, bending the program to their benefit at the expense of smaller producers. USDA programs have traditionally buoyed larger farms, and several private companies have begun their own markets and credits. That could leave the federal government purchasing offsets directly from corporations considered drivers of environmental ills like nitrogen runoff and carbon pollution.
“[Vilsack] doesn’t want to piss off those corporations, so it seems like a win-win for them to talk about climate change and these carbon banks,” said Mackenzie Feldman, executive director with Herbicide-Free Campus and a food research fellow with progressive think tank Data for Progress.
It’s also not clear how much carbon dioxide any of the practices can reliably pull from the atmosphere. The science is inconclusive. Soil variability even on a single acre can throw carbon measurement off kilter.
If a farmer for whatever reason decides to till or disturb the soil, the carbon gets released into the air instantaneously, reversing any gains. And some carbon credit firms, like Indigo, allow farmers to till their farms if they pay a penalty, which environmental activists say is counterproductive.
“This is not a permanent solution,” Debbie Reed, a former USDA staffer who also served on President Bill Clinton’s White House Council on Environmental Quality, said of relying on carbon credits to address climate change over a long period.
Harbourt, of Indigo, said he’s pushing USDA to set common standards after a rash of newer players “muddied the waters.”
His firm sells credits at $20 per ton — $5 of which Indigo keeps for monitoring and verification — which he believes will increase with more demand. He and others also want farmers who already employ climate-friendly practices to be eligible, partly out of fear they’d tear up their systems just to become eligible for new payments.
Rather than open new efforts like a federally managed carbon bank to politically potent agribusiness, progressives said USDA should better fund existing programs with track records of helping producers adopt sustainable farming. Vilsack indicated that the department will boost its conservation programs, although it’s too early to know what that may look like.
The department is also going to have to carefully consider equity in how the money is disbursed. Many farmers of color are wary of standing up a new system at USDA because its programs have traditionally benefited large landowners and agribusiness at their expense. They worry many big farming operations would also use the credits as an inexpensive way to offset emissions, continuing behaviors that harm nearby communities.
“They would still just keep polluting the same,” said Anthony Rogers-Wright, environmental justice director for New York Lawyers for the Public Interest. “From an economic standpoint, it doesn’t at the end of the day benefit the small family farms.”
But even before the Agriculture Department moves forward with the carbon bank, it may run into roadblocks on Capitol Hill. Some Republicans, such as Sen. John Boozman, the top Republican on the Senate Agriculture Committee, don’t want USDA to leverage a little-known $30 billion fund for its climate goals without signoff from lawmakers. That so-called Commodity Credit Corporation has been flagged by Biden advisers as the likely pot of funds for the bank.
Vilsack has said that he hopes that he will be given the same flexibility in using those funds as what was granted to former Secretary Sonny Perdue, who used it to pay farmers hurt by the previous administration’s trade wars. Department officials have also made clear that they believe they have the legal ability to create the bank without seeking congressional approval.
“USDA believes they have the legal authority,” said Andrew Walmsley, director of congressional relations for the Farm Bureau. “I don’t know if they have the political authority. That’s important.”
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