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Serving: United States

Carbon bank is different than a carbon market

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Secretary Vilsack discusses ways USDA can take action now to learn what can work in encouraging climate-smart ag practices.

As discussion of the climate ramps up and the role of government, Secretary of Agriculture Tom Vilsack looks to take a more calculated approach by utilizing existing resources and programs and test drive other ideas.

“You can learn to walk before you run,” says Vilsack in discussing how USDA can work to establish a prototype or pilot program in designing a carbon bank and then see how it works.

He says a carbon bank is a little bit different than a carbon market. He says a carbon bank is engineered for farmers, not necessarily for the investment community or corporations that would be looking for offsets, but for the farmers themselves to encourage them to participate.

He says the current environmental markets for carbon has roughly 135 million outstanding credits today, however only about 2.5 million involve agriculture and food production. Vilsack says the low participation could that there are significant hurdles to overcome in participating in these markets which a company or an investment firm can easily do as they’ve got a bevy of people able to do that. “But if you’re a farmer, you don’t have the time to do that.”

Vilsack says as the agency looks at ways in which it creates a carbon bank to establish the right price payment for carbon, it has to be designed for farmers and with less hassle. “And it has to be valued at such a way that I, as a farmer, can pencil It out and say, this is something that I’m interested in.”

Related: USDA explores carbon markets 

He sees the Commodity Credit Corporation may be an avenue to offer payments, if there’s enough resources to do so.

If a prototype works, and Vilsack thinks it might, then USDA can go back to Congress and look at ways to ramp it up to a point where more and more farmers are participating. “That’s additional revenue, that’s additional sequestration, that’s additional job opportunities because often times there’s contracting involved in the work that has to be done on the land,” Vilsack says. “That’s a good message for the rural economy.”

Building on existing conservation programs

Vilsack also says he plans to use the tools that the agency already has and using them in a creative and information way. “One tool that we have that will have an impact on carbon and carbon sequestration storage is the Conservation Reserve Program.”

Congress has authorized and approved up to 26 million acres of CRP, but today only 22 million acres are enrolled. He sees those 4 million acres as possible to begin the process of addressing some of the challenges we face.

“I would hope in the near future that we would look for ways in which we might encourage farmers who have marginal land the possibility of utilizing that marginal land in the CRP program,” he says.

He says he hopes to provide a financial payment that is sufficient enough to get folks in but it doesn’t distort markets in regions across the country.

Related: USDA wants to know your thoughts on climate smart ag

Vilsack adds USDA also has additional conservation programs that can be utilized. “I think we ought to be targeting and focusing those conservation programs on the climate smart agricultural practices that we know work,” he says. “We need to provide incentives. We need to provide resources. We need to provide cost share for all of the activities that are currently taking place to see if we can expand them and build upon them. I think we also need to explore new ways to do this.”

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