Listen to our conversation:
On September 23, the House Agriculture Committee held a hearing on voluntary carbon markets in agriculture and forestry. This hearing marks one of — if not the — first time that voluntary markets have been discussed at such a level.
Witnesses at the hearing included executives and representatives from the Ecosystem Services Market Consortium and Ecosystems Market Research Consortium, Bayer, National Alliance of Forest Owners, Verra, and the Environmental Defense Fund, among others.
Dr. Jeff Seale, Regrow’s Director of Environmental Strategy and Climate Policy, reviewed the hearing, and identified a few of the most significant takeaways and opportunities from the conversation.
Additionality and Permanence
An important consideration during the hearing was the handling of additionality and permanence for voluntary carbon markets. Additionality clauses require proof that the carbon sequestered in farms and forests is sequestered in addition to what would be sequestered under normal operating conditions. In short, it ensures that farmers and ranchers adopt new practices that make a larger impact on greenhouse gas emissions.
As Jeff put it,
“This is a question we get all the time… in terms of carbon markets, credits are only issued for things that are new. Farmers who have been doing this for awhile don’t meet the standards and requirements for offset markets. That creates some issues.”
Permanence is a concept that ensures that the carbon that’s been sequestered in the soil stays in the soil. This, according to Jeff, is a difficult concept to measure due to the dynamic nature of soil.
Both additionality and permanence affect our current ability to reward farmers for their conservation practices. Additionality prevents us from rewarding farmers and ranchers for conservation practices adopted prior to their involvement in carbon markets, and permanence is difficult to track and quantity over time (but is often required to establish a high-value credit).
According to Jeff, it is imperative that we reward farmers and ranchers for these efforts, rather than devaluing them.
“We’ll need to get creative in the ways that we reward these individuals. Carbon storage fees are one way to address this issue.”
Jeff is confident that reward systems can expand beyond additionality and permanence, and increase participation and incentives within carbon markets.
The Cost of Engaging in Carbon Markets
Another issue that Jeff cited was the cost of engaging in carbon markets. “Currently, in the market, the prices are much lower than the cost to implement practices and to generate carbon removals.”
Nearly a decade ago, carbon markets emerged as a new opportunity for farmers, ranchers and other producers. However, the market collapsed due to lack of demand. In order to build a stable voluntary market system, we will need to address additionality and permanence in these markets.
We’ll also need to build credibility within voluntary markets.
Building Credibility in Carbon Markets
According to Jeff, one of the most salient topics during the discussion was the importance of building credibility in voluntary markets. Specifically, witnesses expressed the need for third-party validation of carbon sequestration.
Third-party data validation helps to solidify carbon credits as a viable commodity, ensuring that the organizations that purchase credits are receiving the carbon sequestration they paid for. This validation adds monetary value to each credit, and confirms carbon sequestration as traceable units of measurement for sustainability and emissions reduction.
Adding more credibility is possible in this space — Regrow currently provides third-party data validation through the MRV tool. However, it’s important that all stakeholders understand the value of credibility for wider practice adoption and participation in carbon markets.
It’s clear that there’s some hesitation around the security and validity of carbon markets, both among the agriculture community and in the private sector. However, by increasing credibility and increasing our scope on farmers’ and ranchers’ payments, we have an opportunity to increase participation in carbon markets and establish these markets as a viable strategy for climate change mitigation.