Ranchers, farmers look to grab carbon credits
Landowners potentially can earn thousands of dollars a year by joining corporations’ green plans
WASHINGTON — For thousands of years farmers plowed their land to plant crops, ranchers let their cattle wander the grasslands eating as they like.
That was before Microsoft or Walmart showed up in Texas farm country.
As corporations seek to appease shareholders worried about their climate impacts, they are buying up carbon credits that pay growing numbers of ranchers and farmers across the country to shift to agricultural practices that increase the amount of carbon dioxide absorbed by the earth.
A rancher who only allows their cattle to graze a limited amount of pasture at a time, for instance, can potentially earn hundreds of thousands of dollars a year in additional revenue, said Jim Blackburn, a Rice University professor who helps landowners enroll in carbon offset programs through the nonprofit BCarbon.
“There’s big money coming in,” he said. “They’re all voluntary programs, but the (Environmental Sustainable Governance) push and the shareholder scrutiny, that’s putting tremendous pressure on these companies to have carbon plans.”
Soil is a natural carbon sink — holding an estimated 2,500 gigatons of carbon dioxide, three times what’s in the earth’s atmosphere. As a plant grows through photosynthesis, it pulls carbon dioxide from the atmosphere and transfers it into the ground though its roots.
But modern agriculture practices generally cause that carbon to be released back into the atmosphere. If a farmer instead forgoes plowing and instead injects seeds into the soil or plants cover crops such as alfalfa and barley in the winter, they not only keep the carbon in the ground but
potentially increase the rate of carbon absorption.
Loy Sneary, a rancher in Matagorda County south of Houston, started rotating his cattle across his pastures seven years ago to prevent them from overgrazing, which damages the grass and prevents it from absorbing carbon dioxide. He’s been collecting carbon payments for two years through a carbon broker based on estimates of how much more carbon his land with all absorb — to be verified every five years with Sneary repaying his advance it the numbers don’t prove out.
Carbon credits are currently selling for between $20 and $30 a ton of carbon, which on a 10,000 acre ranch would work to about $500,000 a year. And then there’s additional revenue from being able to graze more cattle due to healthier pastures with better grass, Sneary says.
“We move those cattle every day systematically so they’re only grazing the top half of the grass,” he said. “Cattle are kind of like we are. There’s different grasses out there, and there’s certain grasses they like more than others and they eat those right down to the ground if you let them.”
Price will grow
And the price corporations are willing to pay for carbon removal is only expected to grow in the years ahead. A report by European energy giant Shell last year estimated the voluntary carbon credit markets could grow as much as five fold over the next eight years to $10 billion a year.
Still, for all the hype, the degree to which nature-based carbon removal is a viable solution to climate remains controversial.
In recent months investors have begun to question whether carbon credit firms are overestimating the amount of carbon being absorbed from their reforestation and sustainable agriculture projects.
Estimates on how much carbon these practices can remove from the atmosphere vary wildly. The Center for Climate and Energy Solutions, a nonpartisan think tank in Washington, D.C., estimates carbon sequestration in soil would at best pull less than 400 million tons of carbon from the atmosphere a year, about 1 percent of current global emissions.
Some scientists believe the potential is far higher.
Tim LaSalle, co-founder of the Center for Regenerative Agriculture & Resilient Systems at California State University, Chico, said he believes properly managed farmland could potentially absorb far more carbon than conventional models suggest.
“Most scientists won’t believe it,” he said. “They’re measuring broken soil systems that have been destroyed by tilling and fertilizer. We’re trying to support how nature built soil, and when we start to gain soil function, we start to accumulate carbon much faster.”
Still, for corporations eager to prove they’re working to solve climate change, regenerative agriculture has emerged as an increasingly attractive field.
Oil attention
Among the most committed supporters are some of the world’s largest oil companies, which are looking to carbon removal technologies of all types as a means to reduce their carbon footprints.
Hess Corp. is supporting research by California-based Salk Institute into developing plant with larger root systems that could store “billions of tons of carbon dioxide per year,” the company said. And Exxon Mobil is helping fund a threeyear study at Rice University into the carbon removal potential of U.S. grasslands.
At his ranch south of Houston, Sneary has hosted executives from Houston-based Marathon Oil and the online retailer Shopify, the latter of which sent a film crew.
“They should use it for PR, to tell their customers what we’re doing,” he said.
Yet for now, many farmers and ranchers remain wary of investing in sustainable agriculture techniques for which there is no guarantee of a return.
Many carbon credit programs only pay for carbon dioxide farmers can prove their land actually absorbed, usually through soil samples. And if estimates by carbon credit brokers prove to be wrong, or there’s a drought, which reduces carbon absorption, farms might end up with little money for their efforts.
“There’s tremendous interest, but there’s also confusion because a lot of the hype has been better than the reality,” said Blackburn, of Rice University. “You have to have the science and testing to back up the claims. And particularly when you get west of Austin, the drought conditions there are not conducive to putting carbon in the ground.”