Complexities of the Carbon Market: do you opt in?

Farmers can receive compensation for sequestering carbon in the soil, or industry may pay a price for releasing carbon into the atmosphere. Digging deeper, carbon markets are a complex system that has not yet been fully developed.

Currently, carbon markets live in the private sector. Individual companies – Bayer, Indigo Ag, Corteva and others – have created their own carbon buying-and-selling programs with unique rules and sign producers and industry up to participate.

Variance within contracts created by these carbon brokers is common. While farmers have a choice in which terms to follow, the contracts may be difficult to navigate, and skipping the fine print could lock farmers into contractual obligations they can’t meet.

Charles Atkinson, American Soybean Association director, points to this as a concern with this model and has been working alongside his peers at ASA to push for a uniform market.

“We want to make sure everybody is on the same page and the system is backed by science,” He says, adding that some organizations are starting research to determine which soil management systems conserve and store the most carbon.

Another concern shared by Atkinson and many others is that early adopters of conservation practices are ineligible for many incentive programs. The opportunities are built to entice the late majority to start implementing sustainable practices.

“Some early adopters are not able to participate in these markets since they have already done a great job of conserving carbon,” he says.

Atkinson emphasizes the importance of establishing guidelines that reach across the board, creating a network of technical service providers that can sign off on standards being met and making the availability of programs fair for all.

The idea of carbon markets is relatively new. Just this year, ASA added a statement to their resolutions that the organization supports voluntary public and private sector carbon markets so long as they are developed with proper science and insight from farmers.