What Ranchers Should Know About Carbon Programs
Carbon markets can be a controversial topic, but regardless of where you stand it is important to understand how they work and where they are finding their role in the beef industry. Ryan Dierking and James Clement from the team at Earth Optics, helps ranchers understand the basics of carbon programs and what they need to consider before signing up in Season 8, Episode 7 of the Casual Cattle Conversations Podcast.
There are five key players involved in carbon programs.
1. Ranchers/landowners – cattle producers who are making management changes for the betterment of the soil. These management changes are referred to as “Additionality”.
2. Project Developers – these groups are the ones who enroll producers into programs and collect data from the landowner.
3. Measurement Agency – companies, such as Earth Optics, that provide all of the ground truth data to determine carbon stocks that verifiers then turn into credits
4. Verification Agencies – these groups use the collected data to determine how many carbon credits have been produced based on soil data and associated changes in management.
5. Buyers – these are the companies who want to purchase these credits to offset their own carbon emissions. These are known as Scope 1 offsets.
Earth Optics is a unique company in this space. They help ranchers collect actionable carbon data and help them understand which directions they can go with it. “We produce carbon distribution maps and can calculate what a carbon stock should be for a particular field or landscape,” says Ryan. Another way to think about it is having a yield map of carbon created for your land. Earth Optics does not create or sell the carbon credits. They measure and report those values to both the ranchers and project developers.
Carbon is measured through two main methods – modeling and measurement. Modeling can involve looking at satellite imagery and/or collecting management data from software that tracks animal movements to quantify the difference in plant matter on the surface. Essentially, this is measuring the impact of grazing duration, biomass removal and rest and recovery periods based on defoliation and plant regrowth.
Measuring involves taking physical measurements of the soil as well as remotely scanning soil data using EMI sensors. Earth Optics uses a combination of the two methods to quantify the soil carbon baseline for the land and then re-check carbon values in three to five years depending on the contract between the rancher and project developer.
In the United States, carbon programs are voluntary. “These carbon credits are not subsidized. They are being demanded and purchased by shareholders of private companies,” says James. Essentially, these companies need landowners which creates the opportunity to get paid for doing what is right by the land and that’s the main draw for many landowners.
One reason landowners choose not to participate in carbon programs is because of the contract length. “Most of these contracts are looking at a timeframe of 15 or 30 years and beyond. The challenge is many ranchers don’t or can’t make this decision for the next generation,” says James. Additionally, the contract or program may not be in line with the landowner’s values and goals.
Landowners also must be committed to upholding their end of the agreement with management changes and data collection and reporting. “When that change takes place, project developers are requiring management data such as how many cattle were there, when were they moved etc.,” says Ryan. Data management programs and tools might be available or provided depending on the contract.
It's important to note that ranchers who have already been proactive with their soil health and management practices and are focused on good stewardship may already be eligible for some programs with little to no management changes required depending on the Project Developer.
Another challenge these programs can face is the amount of rented land being operated on. This could be private land or government land such as BLM, forest service etc. This creates an added layer of complexity because now a lessee is involved in addition to the other parties. James says, “It usually comes down to a negotiation between the lessee and the landowner.”
If a landowner is interested in engaging in a carbon program, there are numerous things to consider. “There are only a handful of programs out there. Look at all the programs and do your due diligence. Look at which program is going to fit the needs of your ranch. Don’t jump at the first one that comes by,” says Ryan. The right opportunity might not arise for another year or two.
Landowners should also be diligent about reviewing the contracts. “The difficult thing is you need to find a lawyer who is comfortable thinking through this,” says James. The family lawyer who has helped with pipelines or eminent domain in the past might not be comfortable or familiar with carbon programs.
After that, landowners should be cognizant of who the buyer is and if it is likely they’ll be in business for the duration of the contract. The language of the contract shouldn’t be complex and what is being asked of the land manager should be clear.
James says, “Ask yourself if it is reasonable to achieve the results they are asking for? For a good steward, 90% of the time it is.”
Understanding any management limitations placed in the contract is also important. An example of this is whether land managers will be able to spray for weeds or if they will be required to use other forms of weed control.
Reviewing contracts is also an opportunity to place any clauses to protect yourself in the future if something were to change or if complete liability protection is not included for those who uphold their commitment.
At the end of the day this is new territory for American ranchers. James says, “It sounds complex, but the bottom line is if you are making long-term good decisions for your land through your management you most likely have the opportunity to participate in these markets.” If enrolling in carbon programs is in line with your goals and values, find someone experienced to help you navigate the opportunities that come your way.
