Extension Ag Update
January/February 2003
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Illinois Offers New Carbon Trading Program for Farmers

Source: Ron Burke; (217) 557-7826; ron.burke@epa.state.il.us; Carl Bernacchi; (217) 333-8048; bernacch@uiuc.edu

Illinois farmers will soon have a new market available to them--selling carbon credits they can earn by adopting a variety of conservation practices. The Illinois Environmental Protection Agency (IEPA) and a number of state agencies and private organizations are developing a program that will allow producers and land owners to earn and sell ”carbon credits” for using conservation practices, such as no-till and planting grasses and trees.

Carbon dioxide (CO2) is one of several atmospheric gases that form a ”blanket” around the earth. This blanket traps some heat from the sun, keeping the planet warm and habitable. But many scientists believe that as the blanket gets thicker, more heat is trapped, causing global average temperatures to rise--an effect popularly known as global warming.  Carbon levels in the atmosphere having been going up because of increased emissions. But research at the University of Illinois, conducted by Steve Hollinger and Carl Bernacchi, both with the Illinois State Water Survey, shows that certain conservation practices, such as no-till farming, can help to offset these rising carbon levels in the atmosphere. They can create a carbon “sink” by storing carbon in the soil. 

“This is an eight-year running experiment where we directly measure CO2 flux between the atmosphere and a no-till corn-soybean agricultural ecosystem,” said Bernacchi. So far, we've collected six years of data that represent three complete corn-soybean rotations. After accounting for all the agricultural practices associated with no-till farming, the data suggests that a slight carbon sink actually exists.”  Continuous no-till, strip-till and ridge-till farming all increase the organic matter level in soil and sequester carbon. Other farming practices that increase carbon sequestration include converting cropland to permanent grass or trees and methane capture and combustion.  Farmers who adopt eligible conservation practices will be able to register with the state to sell the carbon they have sequestered, called offset credits, to private industries that want to reduce their carbon emissions.

Carbon emissions are a particular problem for power plants and fuel-intensive manufacturers. To date, there are no mandatory restrictions on carbon emissions for industry in the United States, but some companies have voluntarily agreed to cap their carbon emissions as part of an experimental market based in Chicago--the Chicago Climate Exchange (CCX). Some of the more well-known members of CCX include the Ford Motor Company, American Electric Power, DuPont, IBM and Motorola. According to Ron Burke, associate director of the IEPA, “These companies can directly reduce their emissions through clean burning technologies and other practices within their own system, or they can buy offset credits. We're positioning Illinois agriculture to take advantage of a new emerging market and that market is carbon offsets.”

The average selling price for offset credits in the United States is around $2 a ton. The sale price is much higher on the international market, where many countries have placed mandatory caps on carbon dioxide, in compliance with an international treaty on climate change, the Kyoto Protocol. The United States did not ratify this treaty, but many experts feel that it is only a matter of time before some type of compulsory reduction will be introduced here as well. So, although $2 a ton isn't going to make anyone rich, Burke noted, “It's a nice extra bonus for farmers. It may not be worth a whole lot today, but down the road it could be.  Plus” he concluded, “it's an incentive to implement conservation practices, which we like for many reasons. So we think it's a real win-win situation for Illinois agriculture.”