Chicago Climate Exchange revamping efforts to get farmers and ranchers to store carbon

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OMAHA, Neb. — The main U.S. market for greenhouse gas credits soon will impose new rules designed to bolster the credibility of the carbon credits it sells.

After Jan. 30, ranchers won’t be able to market their past efforts to store carbon dioxide in the soil dating back to 2003. Going forward, the Chicago Climate Exchange will accept only efforts to limit greenhouse gases related to the current year and future years.

Ranchers and farmers sign up with the National Farmers Union Carbon Credit Program or another program that bundles many credits together before selling them on the exchange. Those carbon credits are bought by companies, cities or others that want to help offset their emissions because they are concerned about carbon dioxide contributing to global warming.

Criticism

The concept of selling carbon credits for action already done in the past had been criticized because it doesn’t necessarily lead to any additional reduction in greenhouse gas emissions. Under the new rules, ranchers shouldn’t face as much criticism about getting paid for something they already did, says Dale Enerson, director of the National Farmers Union program.

“From here forward, we think it will be more bulletproof in terms of criticism if you just offer current year and forward credits,” says Enerson, who is based in North Dakota.

The changes for rangeland credits that ranchers can sell will make the rules for that program similar to the rules for carbon credits that farmers can sell for using no-till farming practices or growing grasses on cropland.

The rules

Ranchers can participate in the program by using certain rotational grazing practices or by planting grasses and trees that process carbon dioxide and release oxygen. Farmers and landowners participate by using no-till farming practices or by converting cropland into pasture or forest. Livestock producers also can participate in the program by installing systems to capture methane from manure.

Program administrators conduct spot checks to make sure farmers and ranchers are doing what they promised to capture carbon dioxide.

About 4,000 farmers and ranchers in about 40 states are enrolled in the Farmer’s Union program. That’s up from about 2,300 participants in 20 states roughly six months ago.

The Farmer’s Union carbon credit program is one of the bigger ones, but there are nearly 90 entities registered with the Chicago Climate Exchange to sell credits for carbon dioxide, methane and other greenhouse cases on the exchange.

Enerson says most people expect that within the next five years, there will be some sort of federal requirement to reduce emissions or buy credits to offset emissions, which would increase the market for credits. Currently, the Chicago Climate Exchange system is voluntary.

“When you look at the whole carbon market, it’s in its infancy,” Enerson says.

Carbon dioxide credits sold on the Chicago Climate Exchange are fetching about $1.50 a metric ton now, Enerson says. Last year, the Farmer’s Union averaged about $4.40 per ton with all the credits it sold.

Farmers or ranchers receive a fraction of ton in credit for every acre enrolled in the program, and that rate per acre varies based on what measures are being taken and the land’s location.