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College of Food, Agricultural, and Environmental Sciences


Rewarding Conservation Farmers Through Carbon Trading

January 5, 2006

COLUMBUS, Ohio — It's been said that money makes the world go 'round, and now it can also make it more environmentally friendly.

Farmers who practice no-till or any other tillage-limiting production technique can earn a few extra dollars by carbon trading — the latest push for a greener environment that rewards growers who sequester, or keep carbon in the soil.

Carbon trading efforts have been expanding across the United States and involve energy industries paying no-till farmers through bilateral agreements, or agricultural groups working in the open market on farmers' behalf.

The Chicago Climate Exchange ( is a voluntary rules-based greenhouse gas emission and trading system, and the place to go to trade carbon credits in the open market. Currently, carbon is trading at $1.70 per ton of carbon dioxide, which roughly translates into a dollar per-acre revenue for the farmer. On average Ohio soils can sequester about a half-ton of carbon per hectare, or roughly 2.5 acres, which is equivalent to 500 pounds per acre.

"Currently, the financial returns aren't that great, but at that rate a farmer with 1,000 acres of no-till could earn $1,000 annually for merely continuing his established practices," said Mark Wilson, president of Land Stewards, LLC in Columbus, Ohio. Wilson spoke about carbon trading to no-till farmers during the recent Ohio State University Extension Ohio No-Till Conference in Plain City, Ohio. "No-till in and of itself is a carbon credit. If someone is willing to pay you to do what you've been doing, then why not get involved? You are just leaving money on the land if you don't."

Examples of carbon trading efforts throughout the United States and elsewhere include:

• Pacific Northwest Direct Seed Association, who works with Entergy, an electric company based in Louisiana, to "lease" carbon credits to Washington state farmers.

• Greenhouse Emissions Management Consortium, a Canadian company whose efforts to trade carbon with farmers has expanded into the western United States.

• World Bank in Washington, D.C., which has mobilized the BioCarbon Fund to alleviate poverty and promote biodiversity conservation by aiding farmers in developing countries to practice no-till. For more information, go to

Ohio has yet to jump on the carbon trading bandwagon. But windows of opportunities are opening for interested farmers. For example, the Iowa Farm Bureau has launched a carbon credit aggregation pilot project to encourage Iowa growers to practice no-till and to trade carbon credits. Through 2004, more than 80,000 acres of cropland have been enrolled, and the Iowa Farm Bureau is looking to expand the project outside of the state as far east as western Ohio. For more information, go to

Rattan Lal, a soil scientist with Ohio State University's School of Environment and Natural Resources and director of the Carbon Management and Sequestration Center at the Ohio Agricultural Research and Development Center, has been leading education and research efforts to ignite working relationships between Ohio farmers and the state's energy industries. So far, it's been slow going, but he contends that carbon sequestration is an important aspect of environmental stewardship.

Carbon sequestration, also known as carbon farming, refers to the storing of atmospheric carbon in plants and soil so that the buildup of carbon dioxide in the atmosphere will reduce or slow.

"Carbon trading and the benefits of carbon sequestration are generally tied to climate change. The Chicago Climate Exchange was founded on this. Yet, discussions continue as to whether or not loss of carbon to the atmosphere has an impact on global warming," said Lal. "But whether you believe this to be the case or not, putting carbon back into the soil is a good thing to do. It increases soil biodiversity, cleans pollution, helps with erosion control, improves water quality, reduces input from chemicals, sustains natural resources and offsets carbon dioxide emissions."

Lal and his colleagues face the challenges of encouraging no-till farmers to seek out carbon trading opportunities and convincing tillage farmers to adopt conservation tillage practices.

"Farmers who don't practice no-till are not going to manage their fields that way with just a dollar savings," said Lal. "They need incentives, and one of those is increased carbon trading prices. Farmers have told me they'd change production practices for $10 an acre. We still have a long way to go."

Though carbon trading varies at the Chicago Climate Exchange, credits can reach as high as over $2 a ton. Some industries have rewarded farmers with as much a $5 a ton for sequestered carbon, noted Wilson. However, carbon trading in the U.S. holds no candle to the revenue European farmers generate — in some instances as high as $58 per ton. It's conservatively estimated that the European Union will trade as much as $1 billion worth of carbon emissions annually by 2010.

Lal said the Kyoto Protocol is what is driving the higher prices in Europe. The Kyoto Protocol is an international agreement to mandate industry reduction of greenhouse gas emissions. The United States is not part of the agreement.

"Because industry in Europe is by and large required to decrease emissions, trading is much more profitable for farmers in Europe," said Lal. "Emission reductions are voluntary in the U.S., but industries are rewarded tax breaks for providing evidence of being a green industry."

If carbon trading does develop in Ohio, Lal wants to make sure growers are well prepared for the benefits. He and his colleagues have created a county-by-county database of the rate of carbon sequestration based on soil type.

Other research projects include:

• Setting up demonstration sites in seven states (Ohio, Pennsylvania, Michigan, West Virginia, Indiana, Kentucky and Maryland) to compare the rate of carbon loss between no-till fields and tilled fields. The work is supported by a four-year, $1.2 million Department of Energy grant. One of the purposes of the project is to demonstrate carbon sequestration through field days.

• Identifying how much carbon is required to restore mined soils. Supported by the Ohio Coal Development Office, the research covers six Ohio counties in southeast Ohio.

Lal contends that carbon trading is not only an important marketing practice for local growers, but has implications for solving some of the world's most pressing food security problems.

According to Ohio State soil science research focusing on soil quality in such countries as the United States, Africa, India, South America and Latin America, if soil carbon content was increased by one ton per hectare (roughly 2,000 pounds per 2.5 acres) using such conservation practices, grain yield would increase 220-440 pounds per 2.5 acres, wheat yield from 44 pounds to 110 pounds per 2.5 acres and soybean yield from 44 pounds to 88 pounds per 2.5 acres.

"What that means for countries like Asia and sub-Sahara Africa, whose food deficit will be 22 million tons by 2010, is that if farmers can adopt carbon-storing practices, food production could increase by 32 million tons every year, basically eliminating that food deficit," said Lal.

Farmers in developing countries seeking to adopt conservation practices are limited in their ability to do so because of the need for special equipment, resources or other technology to accomplish such tasks. But that's where carbon trading could come into play, said Lal. And many organizations throughout the world are helping to make that happen.

For more information on carbon sequestration and carbon trading, log on to the following Web sites:

• American Farm Bureau —

• USDA Economic Research Service —

• Pew Center —

Candace Pollock
Rattan Lal