Carbon regulation, carbon markets taking up air at all levels of government

Carbon, in the context of greenhouse gas emissions and climate change, is being talked about at all levels of government. In Washington state, the legislature has been focused this session on carbon regulation bills—a low carbon fuel standard and a cap-and-trade program. At the federal level, carbon markets are becoming increasingly front and center. In May’s issue, Wheat Life sat down (virtually, of course) with Keira Franz, environmental policy advisor for the National Association of Wheat Growers (NAWG), and Nicole Berg, NAWG’s vice president and a wheat grower from Paterson, Wash., to ask them what they are seeing and hearing.

What’s happening at the national level in regard to carbon regulations and carbon markets? Are you seeing a big legislative push like we are seeing in Washington state?

KF: The discussions in D.C. have been centered on infrastructure projects. That’s the big thing right now, infrastructure and the proposal the new administration has been seeking. On the agricultural side, it’s been more about how to facilitate some of the private carbon market efforts.

But you are seeing discussions about carbon markets.

KF: The difference this time, from say 10 or 12 years ago, is a lot of discussion is on private carbon markets not government markets. The discussions we are having both on the Hill and at USDA (U.S. Department of Agriculture) are more about how does the federal government support the private markets? We don’t know that they necessarily will be looking to develop a government-based or a federal carbon market as it relates to agriculture. They could do that, of course, but they could just continue to try to support what’s going on in the private sector. We aren’t certain what the policies will look like.

What is happening on the private market?

KF: I would say there’s probably eight or 10 different companies, maybe more, that have their own sort of approach to carbon markets. Bayer Crop Science, Nutrien and Indigo Ag are some of the big ones. NAWG is involved with the Ecosystem Service Market Consortium (ESMC). That’s a coalition of farmer groups, conservation groups and private industry that are all working together. ESMC is still in the development phase, so they won’t have a public launch until 2022, probably in the fall, but they have pilot projects that are underway. 

Private carbon markets are all different. They range from agribusiness companies all the way to nonprofits to grower-based organizations that have put together these different proposals. They are all different. They all have different requirements, different provisions. There isn’t necessarily uniformity in what a farmer’s contract looks like, what the requirements on that farmer are, how they get paid, when they get paid, those types of things. In the Pacific Northwest, the ESMC projects center more around grazing than crop production.

NB: Some of the folks that have gotten involved in the private sector are looking for a standardization of it, because there’s a lot of confusion out there in the countryside.

I’ve always kind of scratched my head about why there aren’t more private companies in the PNW offering a carbon market program. I suspect it’s because our state government is already going down a cap-and-trade path. We will be mandated, so what’s there to buy? The wheat industry has  been opposed to a cap and trade for years, but we’ve always been open to voluntary, incentive-based programs. We have also always been supportive of quantifying the good work we do, how we treat soil health, etc.

What is NAWG’s official position on carbon markets. Would the organization like to see something done more at the federal level?

KF: We are still looking into those. Our policy, generally, is to support the private and federal carbon-related programs and practices. We want to make sure they are voluntary, incentive-based approaches. Farmers have the option to participate—it’s not a requirement, but if it works with their operation, they can do that. And we really want to make sure that if there is something done on the federal side with agriculture, it stays within the jurisdiction of the ag committees on the Hill and within USDA.  

We are hearing from USDA that they are looking at some regional pilot projects that focus on more of the conservation and forestry programs, looking at cost shares where they focus on climate-smart practices in certain regions. Some of the things we’ve been hearing are related to the Regional Conservation Partnership Program, such as projects that focus on practices that sequester carbon or reduce greenhouse gas emissions, whether that’s fertilizer or manure, forestry issues, crop production or grasslands.

Do you think farmers would prefer these programs be more of a federal effort vs. a private one?

NB: I think it depends on who you talk to. Some folks prefer no government, and some prefer big government, so it would be a question that I would suspect has different answers from different farmers. 

We’ve been talking about carbon and climate for a long time, and for a long time, it’s just been talk. Is the action part here, and is it here to stay?

NB: I agree, but I kind of don’t agree. Like with the Conservation Stewardship Program or some of the new programs we’ve implemented, farmers have done a lot of work with regards to soil health, climate and sustainability in our practices, such as direct seeding. I think wheat farmers are very sustainable, and we have turned some corners. My dad has told me that my generation has made more strides forward for agriculture and farming than he or his dad’s generation made.

KF: I would agree with Nicole. There’s a lot of innovation that’s taken place over the last 20 or 30 years that has substantially changed the way farming is done, and there needs to be expansion of that, such as broadband for making sure everybody has access to and can use precision ag tools. We also need to defend crop protection tools. For us, that’s pesticide use, herbicide use, treated seeds. We need to make sure we have continued access to those. We need to share the message that if we want to continue conservation tillage and direct seeding and maybe expand into cover crops in areas where that works, we are reliant on crop protection tools to help facilitate those practices and sequester the carbon. 

We are having those discussions on Capitol Hill so they understand that we want to have a balance, and we want it to be something that recognizes that the way wheat growers in Washington state are producing their crop is very different than what happens in Minnesota or what happens in North Carolina. There is such a regional difference, probably even down to county by county, in how producers are going to go about those practices and what works for them.

What are you hearing from farmers about what they’d like to see or not see when it comes to carbon markets?

NB: I hear farmers wondering, “If I do this private market program, what if another one shows up, and it pays more?” There’s a lot of those conversations being had. I think farmers would be open to a voluntary program, something they’d get some compensation for. It definitely needs to be science based. I think they would want something quantifiable.

Are there things that would be a hard no?

NB: I don’t want to be told how to farm as a mandate. 

KF: None of this can tell the farmer exactly how to farm. You have to have options on your farm. If you are sequestering carbon, or you are improving soil health, or you are reducing runoff…whatever the practice might be, how do we do it in a way that works best for that farmer and achieves that environmental goal while still allowing the farmer to be economically viable? They’ve got to maintain their operation to have the success we all want. If they can’t do that, there’s no point in it.

How important is it that wheat farmers be involved in discussions on climate and carbon?

NB: If you aren’t at the table, you are on the menu. I’ve always been a proponent of having discussions that center around solutions or solution-oriented conclusions and then actions. I do think, with this administration, carbon and climate change are some of their priorities, so we definitely want to be part of that discussion.

KF: I would agree. I think we have seen this administration move very quickly on these topics. We’ve seen Congress engaging with it as well. I think it is very important that we continue to be part of the discussion and be talking about some of those solutions, like what’s going to work for wheat growers? How does it work in different regions, and what are those things that both Congress and the administration need to be taking into consideration as they develop any programs, plans or actions?