Instead, let’s build a new way for farmers and ranchers to benefit from good soil health management
It is time for regenerative farmers and ranchers to forget about carbon markets — or at the very least to renegotiate how little you are receiving from the massively growing marketplace. Your work in storing carbon is a big part of the $400 billion in valuation of the U.S. carbon market alone, according to the latest reports (InsightAce Analytic Pvt. Ltd., 2023), but carbon credits are being priced in a way that leaves growers with little to no incentives.
Here’s the quick math that illustrates what producers are missing: If the 150,000 farmers in the United States using cover crops — the common tactic required to receive carbon credit revenue — were given access to just half the total carbon market, the market would provide each farm $1.3 million and still leave $200 billion for others.
Kind of amazing, right? Yet the biggest check I have heard a farmer get is about $50,000, earned by a large-scale ethanol corn farmer using cover crops. To be fair, $50K isn’t exactly chump change, so we can assume a few farmers are going to adopt new practices, but “how sustainable are these benefits in the long-term if we tie them to a fragile carbon market” is a decent question. Plus, cover crops often start as loss leaders but are essential in no-till and other regenerative systems to maintain soil fertility and structure. Emphasis must be on the word systems.
Aside from the $400 billion, the idea of carbon sequestration is also attracting massive amounts of public funding and philanthropy. Carbon research centers are opening in places like Colorado State University ($25 million), the University of Minnesota ($20 million), Ohio State University ($15 million), and others. What exactly are they researching?
For one, there is great interest in validating pricing that fuels the $400 billion market, which is forecast to reach $4 trillion in 2031. Jennifer Sara, Global Director for Climate Change at the World Bank, defined why her organization is spending money on pricing controls in their report this year: “Carbon pricing can be an effective way to incorporate the costs of climate change into economic decision making, thereby incentivizing climate action,” she said.
But really? Is that true? Will all this money being directed into cheap carbon sequestration credits really lead to better environmental stewardship? I wish this were so, but I don’t know if the incentives are in the right place. For example, I have not found a single carbon credit program promising to make a farmer or rancher a millionaire, yet growers are the ones with the best opportunities to tie up carbon and repair ecosystems ($1 million would be 0.00025% of $400 billion). We don’t need to attract more companies to buy carbon credits as much as we need to create more citizens of Earth regenerating our landscapes.
So what do we do about it? I would encourage farmers and ranchers to not voluntarily enter programs from carbon credit buyers or brokers — who can range from Bayer to nonprofits — until you fully understand the economics of scale at play. If the carbon credit buyer is talking about “partnering,” then do you know what percentage of the total pie you will be getting? I realize negotiating can be tough when the selling point is, “it’s free money for farmers; you don’t have to do a thing,” but we have to remember the age-old caveat: free money seems nice, but we all know it’s not real.
The market, for now, is dependent on keeping credits cheap and readily available. This does not help you. When credits are scarce and more expensive, third parties have been caught conjuring the supply out of thin air. For those who haven’t been reading the line scores this year, an investigation by the Guardian and several other organizations of one of the largest crediting agencies, Verra, found 90 percent of the carbon credits they sold to companies were not tied to any real environmental protection program.
The main problems causing this? The current metrics seem to be arbitrary, if not sloppy, and the scale of power in the carbon market is completely backwards. Massive polluters like Exxon should not be telling you how to price your carbon. They are the dependent ones. Instead, they should tell you what they will pay, and then you can tell them it’s worth 10 times that much. You don’t have this leverage now, but you should. To get to this spot, it will take everyone holding the ground on this. Logistically that’s probably not possible, but it’s at least worth writing about.
Conversely, there is a better idea building momentum to replace carbon altogether. Many in the regenerative movement believe that if we must commoditize our common sense, soil-health-driven practices, we should pay growers for working in preventative medicine, not carbon storage. This new market would reward farmers and food manufacturers for rewiring a food supply so it does not give us cancer, diabetes, chronic diseases and environmental degradation on a massive scale, and would start to address a healthcare system that is extremely inefficient. It would provide time and energy to transition our current carbon incentives, which merely give companies a chance to pay for the chance to pollute, into programs can be linked back to real health statistics and reducing the $1.2 trillion in healthcare spending nationally.
This Health Improvement Credit is immensely possible because we know just as much — if not more — about food and nutrition’s role in healthcare than we do about carbon and its role in mitigating greenhouse gas pollution. It will take a lot more work to connect the dots, but it’s happening.
In the meantime, I want to finish with an idea about how we could price our environmental benefits, since this idea is where we started. I suggest we fall back on our experiences in the doctor’s office. If the carbon buyer tells you the prescription really calls for cover crops, then we know what to do next. The buyer will first need to see a specialist (that’s you.) And then in four to six weeks, they will get a bill charging them a couple grand for the opening consultation, $250 an hour for some tests, and at least $100 a month to keep their subscription filled.
Ryan Slabaugh is the founder and director of Think Regeneration, a 501(c)(3) that accelerates regenerative food supply programs around the country through leadership programs, task force organization, and education. He was previously the executive director of Acres U.S.A. Email him at ryan@think-regen.com.
