Carbon markets aren’t what they appear

by Anthony Pahnke

“Flimflam,” “bait and switch,” or “switcheroo” — these were some things my grandfather said to warn of proposals that seemed too good to be true.

On our farm, he saw his fair share of these kinds of offers, from salesmen pitching the latest, yet untested variety of seeds, to equipment dealers trying to convince us that buying another, larger tractor would help increase yields and solve our financial problems.

I fear there’s something similar happening with legislative proposals such as the Growing Climate Solutions Act, which make carbon markets central to confronting climate change.

With the midterms behind us, and the farm bill discussions with our new Congress coming up early in 2023, we need to distinguish good, real solutions to the climate crisis from those that would continue to wreak havoc on the environment and serve mainly to line the pockets of wealthy investors and corporations.

The Growing Climate Solutions Act is an example of the latter.

Tailored for agriculture, the bill is slated to appear in 2023 farm bill discussions after stalling in the House.

The bill pushes farmers to turn certain government-certified practices into tradable assets, or credits, to sell on already-existing carbon markets. Generating over $851 billion in 2021, some markets are regional, such as the European Union’s Emissions Trading System, or the Regional Greenhouse Gas Initiative in North America, while others in China and the United Kingdom are national. Eligible practices may include reforesting, using cover crops, creating on-farm energy or improving fuel efficiency.

The problem with carbon markets is offsetting.

Specifically, carbon markets allow corporations to purchase credits to balance, or offset, environmentally destructive practices that the businesses also do.

For instance, a farmer could plant alfalfa as a cover crop, earning credits to sell to improve their income. Meanwhile, fossil fuel companies with the mandate to be “carbon neutral” could purchase those credits, continuing to pollute as they produce oil, gas and other fuels.

To make matters worse, speculators make carbon markets volatile, generating price drops that could endanger the additional income that farmers bank on receiving.

Pledges to be “carbon neutral” or achieve “net-zero” emissions may sound nice, but they are slogans designed to make us turn a blind eye toward corporate polluters that are destroying our planet. Instead, we need climate solutions for the next farm bill that truly benefits farmers, as well as the Earth.

The Climate Stewardship Act, proposed by Sen. Cory Booker, D-N.J., is worth considering in this regard. Booker’s legislation increases enrollment of environmentally sensitive land to 40 million acres by 2030. This increase will pay farmers to take land out of production, supporting incomes while not propping up volatile carbon markets.

The proposal also increases financing for small-scale farmers to engage in practices recognized by USDA’s Natural Resources Conservation Service as being effective at reducing Greenhouse Gas Emissions, while also scaling up the Local Agriculture Market Program. Expanding this program would reduce our food system’s overall carbon footprint — production, processing and transportation contribute about a third of global GHG emissions — by promoting direct sales and local farmers markets.

Climate markets may seem a “win-win” for cash-strapped, environmentally conscious farmers. The reality, however, is that they make farmers’ incomes volatile, and corporations rake it in while continuing to destroy the planet. As my grandfather would say, the plans for these markets are the latest “flimflam” that we should avoid. Let’s take his advice to heart in our upcoming farm bill discussions.

Anthony Pahnke is the vice president of Family Farm Defenders and an associate professor of international relations at San Francisco State University.