As my friend Rhishi over at Software is Feeding the World so aptly wrote recently, “Everyone and their brother has a carbon market.”
Among the group frantically hoping to set up private markets are the venture capital darling Indigo Ag, Nutrien, the EcoSystem Market Consortium, Bayer’s Carbon Initiative, and the COMET-Planner, just to name a few. Even new advisors on Biden’s agriculture transition team want the US Department of Agriculture in on the action.
The basic idea behind carbon markets is simple; carbon-emitting companies and industries will pay farmers to sequester carbon in their soil to offset emissions, and this will create a market for carbon sequestration credits. Sounds great, right? Big companies like Amazon and Exxon can go on, business as usual, and offset their enormous impact on the environment by funneling money to farmers to suck their sins right out the air and bury them in the soil.
But the thing is, no part of this solution is as this simplified description would make it seem; not the existing context, not the science, not the potential structure of the market or the incentives. Not the outcomes, the impacts, or the players.
This idea didn’t fall from the sky recently, for one. For years, the agricultural industry has been fighting this very thing, commonly referred in to in the past as “Cap and Trade,” tooth and nail.
The New Cap and Trade?
Why the sudden about face? Because currently, there is no cap (and there seems to be no real policy effort coming to create one), so no actual forced limits on the amount of carbon being emitted, which helps farmers, because the average US farmer emits a lot of carbon. Without the cap, and with carbon markets being nebulous and privately-run, there’s a good chance farmers can be cashing in on minimal “carbon neutral” or “carbon negative” activities, like no-till or cover cropping (the latter being an activity the…