Earlier this month, I wrote an article for the Monthly Harvest magazine published by the American Enterprise Institute. Below is an excerpt of the article. You can read the full article here (archived here).

Soils play an important role in our changing climate, yet they are often overlooked in favor of more well-known factors such as fossil fuels. However, the prospect of government payments to farmers for climate-friendly soil management has brought soils to the fore. In his April 2021 address to a joint session of Congress, President Joe Biden promoted a plan for farmers to plant “cover crops, so they can reduce carbon dioxide in the air and get paid for doing it”; an approach widely described as promoting “carbon farming”.

In this article, I argue that such policies are unlikely to provide significant climate benefits.

How and Why is the Climate Changing?

Greenhouse gases in the earth’s atmosphere help keep the planet warm enough for life to flourish. They act like a blanket, letting heat from the sun through to earth and then preventing that heat from escaping into space. The more greenhouse gas (GHG) in the atmosphere, the warmer is the planet.

The most prominent greenhouse gas is carbon dioxide (CO2) but others include methane (including emissions from livestock), nitrous oxide (largely from nitrogen fertilizer), and water vapor (clouds). 

Humans have increased the amount of carbon in the atmosphere by almost 50% from 588 gigatonnes (GT) at the beginning of the industrial revolution to 873 GT at the end of 2019. These are quantities of carbon rather than CO2; when mixed with oxygen, every 12 tons of carbon becomes 44 tons of CO2.

The two human-generated carbon emissions sources are fossil fuels and land use change. Since the beginning of the industrial revolution, these sources have emitted 685 GT of carbon into the atmosphere, which is more than the total amount of carbon in the atmosphere in 1750. About two thirds of these emissions were from burning fossil fuels and the remainder from land use change. Earth’s oceans and lands have absorbed 58% of the new carbon, so the net increase is 285 GT. 

Most land use change emissions are from loss of biomass rather than soils. It is estimated that 116 GT of carbon has been lost from soils due to agriculture, of which 70 GT occurred before 1750 (Sanderman, Hengl, and Fiske, 2017). Restoring these 116 GT to soils would offset a substantial proportion of fossil fuel emissions since 1750. This theoretical possibility explains why carbon farming is so alluring.

Do Modern Farmers Emit or Sequester Carbon in their Crops?

When land is first converted to pasture or cropland, large amounts of carbon are typically emitted by burning and tillage. After this, the carbon in the soils and plants cycles constantly.  As a crop grows, it absorbs CO2 through photosynthesis and emits CO2 through respiration. After harvest, microbes decompose the crop residue and emit CO2. The harvested crop may be eaten by animals who breathe out some of the carbon that was in the plant, or microbes may decompose the animal after it dies and emit CO2.

If a farmer grows a crop every year, she is mostly cycling carbon. It is possible that the farmer is sequestering carbon on net, e.g., if the roots of the crop are left to decay into the soil. It is also possible that a farmer is emitting carbon on net, e.g., if repeated tillage brings carbon to the surface where microbes feed on it and respire CO2. I wrote about the complexities of the carbon cycle a couple of weeks ago.

One measure of whether a farmer is emitting or sequestering on net is whether the quantity of carbon in the soil is increasing or decreasing. A theoretically efficient policy would pay farmers an amount equal to the social cost of carbon for each ton of carbon they sequestered, and it would tax them for each ton they lost. This policy would be too expensive to implement. The standard means of measuring soil carbon rely on chemical analysis performed by scientists in a lab. These methods require a soil core sample to be drawn from the field. They are time consuming and expensive.

Because measuring soil carbon is expensive, proposed programs focus on incentivizing farmers to adopt easily-observed practices that are thought to increase soil carbon. This approach reduces the administrative cost of a program, but also reduces its efficacy because practices may have different effects in different environments.

On-Farm Practices to Increase Carbon Sequestration

The four most commonly proposed practice are as follows:

1. Cover crops. By planting grasses or legumes on cropland that would otherwise be bare, e.g., between trees in an almond orchard or over the winter between crops. Cover crops can fix carbon into the soil and also reduce erosion which is a source of soil carbon loss.

2. Minimum Tillage. Tillage brings carbon to the surface where microbes decompose it and emit CO2. Without tillage, the carbon stays buried.

3. Plant growth. Plant matter stores carbon, so increasing the volume of plant matter increase carbon storage. If residual plant matter remains in the field after harvest, then it can decompose and be trapped in the soil. Plants with high root mass are most effective.

4. Cropland Conversion.  Converting from crops to pasture, especially deep-rooted perennial pasture, or to trees works similarly to cover crops by fixing carbon into the soil and reducing erosion.

Challenges to Subsidizing Carbon Farming

I highlight three challenges.

1. Permanence. It has little effect on the climate to sequester carbon in the soil one year and then till the soil and release it the next year.  Thus, policies to incentivize sequestration for the long term. This is difficult because farmers would be unwilling and unable to commit to farm a certain way for decades into the future. An alternative would be to subsidize farmers while they use the practice and tax them (or require them to return their subsidies) if they deviate from the practice.
2. Additionality. Carbon farming only achieves climate change mitigation if it reduces atmospheric carbon relative to what otherwise it would have been. If a farmer receives a payment for planting cover crops on a field that would have been planted to cover crops anyway, then the payment has had no effect on the amount of carbon in the atmosphere. If a government wishes to pay farmers for doing something they would do anyway, then they should do so, but not under the guise of climate change mitigation. 
3. Measurement.  Soil carbon dynamics are complicated. The amount of carbon stored and released varies widely depending on temperature, precipitation, what crop is planted, and numerous other factors. Measuring changes in soil carbon accurately is costly. Moreover, the efficacy of on-farm practices in increasing soil carbon is a subject of vigorous debate among scientists. For example, Powlson et al (2014) find that no-till agriculture has only small effects on soil carbon.  

At present, it is difficult to see how programs that simply pay farmers for using particular practices would overcome these challenges.  Programs that pay out based on measured changes in soil carbon face the same challenges as well as the high cost of monitoring soil carbon.  In theory, soils could store enough carbon to offset a significant proportion of fossil fuel emissions, but there is much more work to do to evaluate potential policies and improve technology to make better policies feasible.

For more background on carbon farming I recommend listening to the Corn Saves America podcast.

Also, see this paper:

Thamos, T., Pannell, D. J., Pardey, P. G., and Hurley, T. M. (2020). Private Incentives for Sustainable Agriculture: Soil Carbon Sequestration. Working Paper 2004, Agricultural and Resource Economics, The University of Western Australia.

Disclosure:  I received a small fee from AEI for writing this article. They asked only that I write about policy issues associated with carbon farming.