Monday, December 29, 2008

Agriculture: Turning carbon into cash

From the Federal Reserve Bank of Minneapolis' fedgazette :

Offsetting greenhouse-gas emissions is a burgeoning district industry with an uncertain future.

The grass is greener on Lisa Schmidt's ranch. Last March she and her husband enrolled their 3,500 acres of rangeland near Conrad, Mont., in a program that pays them for every ton of carbon dioxide (CO2) the prairie grasses suck out of the air. Under a contract with a Montana aggregator of carbon credits, the couple has agreed to practice rotational grazing on their land for three years. Moving their cattle and sheep on a regular basis from pasture to pasture will promote healthy root growth and increase the amount of carbon stored in the soil. Schmidt expects to receive a $1,200 check for those rangeland credits by the end of the year.

Together with a similar amount earned for growing grass for hay, the money produces extra income from ranching practices that Schmidt and her husband were committed to before they had even heard of carbon credits. "We're trying to do it right, and take care of the land," she said. "The credits are just a bonus; they'll cover our property taxes."

Schmidt is one of hundreds of landowners in the Ninth District who participate in a small but rapidly growing U.S. market for carbon offsets, credits generated by projects that—at least in theory—counterbalance greenhouse-gas emissions produced by industry and other human activity elsewhere. "No-till" farmers, timber operators and owners of recreational woodland are also making money by sequestering carbon on their land....MORE