While the debate on greenhouse gas and global warming goes on, the agriculture sector has an opportunity to benefit from programs being fashioned to help reduce CO2 emissions. Energy-related carbon dioxide emissions, resulting from petroleum and natural gas use represent 82 percent of total U.S. human-made greenhouse gas emissions, and are expected to grow by 1 to 2 percent a year.[1] One of the processes being used to bring global warming under control is by curtailing the release of carbon dioxide. One approach to doing this is referred to as Carbon Sequestration. Capturing and storing carbon in biomass and soils in the agriculture and forestry sector has gained widespread acceptance as a potential greenhouse gas mitigation strategy. And carbon sequestration is not separable from other environmental effects of a given land-use practice. For example, the introduction of cover crops or the conversion to conservation tillage from conventional tillage also reduces soil erosion, in addition to sequestering carbon.
You may want to investigate the Carbon Sequestration assets lying under your land. It is likely that practices you are already do can become a source of income. In recent years carbon has become a commodity and like any commodity it is traded in the markets just like corn and wheat. Carbon is sold as credits with a carbon sequestration credit measured as a mass of carbon stored, or sequestered, that can be traded like any other commodity.
The members of the Board of Directors of Dairy Business Association of Wisconsin met recently and viewed a presentation on carbon sequestration and the emerging carbon trading markets. They came away with a better understanding of the processes, risks and opportunities in carbon trading. The presentation also focused on future and options hedging for agricultural producers. In addition the presentation discussed innovations like Anaerobic Digesters which capture and destroy methane, another one of the greenhouse gases which are eligible for off-set credits. They also heard about the potential of certain forestry practices and what contributions renewable fuel and electricity may have.
As always with positive news there are downsides. In this case exercising caution is the best advice. A host of companies are getting into emissions trading and are approaching producer and convincing them to sell their credits or let them manage their carbon commodities in a less than fair partnership. We urge our members who are interested in exploring this potential to educate themselves on the markets, process, potentials and risks.
If you would like more information on this prospective source of income, or would like us to share what the board learned, feel free to contact any one of the staff on the Dairy Business Associations team. We will do our best to provide you with research and resources you need and insure that you receive the information in a timely fashion.
[1]http://www.eia.doe.gov/oiaf/1605/ggccebro/chapter1.html
