Published on December 30, 2007
Carbon Sequestration ProjectND Farmers Union: Carbon Sequestration Project ND Farmers Union MASDA Carbon Roundtable Dale Enerson, NDFU Economist March 21, 2006 Draw a circle, three triangles, and a crescent shape on a paper…: Draw a circle, three triangles, and a crescent shape on a paper… What does your picture look like? What Does This Prove???: What Does This Prove??? There are at least two views to every issue… There is usually much more to an issue than first appears… Unless you have all the information, it is impossible to frame the discussion or succeed at a task… Figure 13. Percent Change in Persons Ages 20 to 24 for the U.S. by County: 1990 to 2000: Figure 13. Percent Change in Persons Ages 20 to 24 for the U.S. by County: 1990 to 2000 Slide10: Nonmetro Farming-Dependent Counties, 1989 Other nonmetro counties Farming counties Metro counties Counties with 20 percent or more of income (labor or proprietor) from farming Source: Bureau of Economic Analysis Slide14: Number and Average Size of N.D. Farms, 1900-2002 Source: U.S. Bureau of the Census, Census of Agriculture, various years. North Dakota: North Dakota Our tree removal and mountain removal projects are nearly complete! Carbon Sequestration: Carbon Sequestration Carbon sequestration can be defined as the capture and secure storage of carbon that would otherwise be emitted to or remain in the atmosphere. What are Carbon Credits? Carbon credits encompass two ideas: (1) Prevention/reduction of carbon emissions produced by human activities from reaching the atmosphere by capturing and diverting them to secure storage. (2) Removal of carbon from the atmosphere by various means and securely storing it. Value of Increasing SOM: Value of Increasing SOM Improves soil structure Decreases erosivity Increases infiltration Increases soil water holding capacity Increases cation exchange capacity Decreases the energy requirement for cultural operations An acre of land could produce:: An acre of land could produce: Income from the sale of a grain crop Income from a government crop subsidy Income from the lease or sale of minerals under the surface Income from recreational uses Income from the wind development rights Income from the storage of carbon Slide36: Americans Want Action on Global Warming A new PIPA/Knowledge Networks Poll conducted 6/22-26 revealed that 73 percent of Americans wanted the U.S. to participate the Bush-opposed Kyoto Agreement and 56 percent now agree that the U.S. should take steps "to reduce greenhouse gases, even if it involves significant costs." Climate Change Treaties…: Climate Change Treaties… Kyoto Protocol- important to the rest of the world, but probably a dead issue in the U.S. McCain- Lieberman Climate Stewardship Act- defeated in U.S. Senate in November, 2003, but did receive 46 votes and proponents vow to modify and re-try Chicago Climate Exchange: Chicago Climate Exchange The Chicago Climate Exchange (CCX) is a voluntary, pilot GHG emissions trading program targeting emissions and offsets in North America (US, Canada and Mexico) as well as limited offset projects in Brazil. Chicago Climate Exchange: Chicago Climate Exchange Carbon sequestration in soil and biomass will be recognized on the CCX through credits generated by projects that are registered and verified on the Exchange. Additional on-farm GHG emission reduction activities, such as methane capture and reduced nitrogen application, are also targeted for inclusion. Why Now?: Why Now? Discussion of 2007 Farm Bill environmental issues makes this timely Desire to offer opportunity for northern plains farmers access to Chicago Climate Exchange Carbon storage prices are cheap now, will likely become more valuable Desire to be a pro-active farm group, willing to work on futuristic projects Tie in with other conservation programs through USDA Help producers make use of environmental benefits points in future competitive bidding Potential to use producers as part of the NDFU/NASA project if it is funded. Downside?: Downside? Other farm groups (NDFB) (LAND) will see this as another threat to property rights While general public has been shown through polling to support reducing greenhouse gas emissions, many individuals see this as a threat to business Coal fired energy industry and to some extent rural electric cooperatives see greenhouse gas discussions as a threat Fear of selling credits now when they may be worth more later CAVE PEOPLE: CAVE PEOPLE Citizens Against Virtually Everything ND Farmers Union Carbon Sequestration Project: ND Farmers Union Carbon Sequestration Project Enable farmers and ranchers to sell carbon credits on the Chicago Climate Exchange at minimal cost and risk. Educate producers and others on the issues of climate change and how agriculture may be a partial solution Plan is to “aggregate” credits to achieve large enough blocks of credits to sell. Project will begin in ND spring 2006, but plans are to expand to Montana, South Dakota, Minnesota, and Wisconsin (Farmers Union Enterprises) in the next couple of years. Slide46: Offsets for no-till or grasses Offsets for grasses only UU.S. Central Region for CCX® Soil Offsetssets Slide47: Pricing: The transfer price of the XSOs covered by this contract shall be the sales price as determined by sale through the Chicago Climate Exchange less a 10% service fee. Plan is to offer a bundle of potential carbon credit practices NDFU Carbon Sequestration: NDFU Carbon Sequestration Conversion to No-till cropping (.4 metric tons per acre)(Potential 12.9 million new acres) Seeding long term grasses (.75 metric tons per acre)(Water-bank, Grassland Reserve, Switchgrass) Enhanced range management with increased vegetative index (.4 metric tons per acre) (Cell grazing and short but intensive grazing practices) Creation or restoration of wetlands (4.5 metric tons per acre)(Priority in Prairie Pothole region) Expect to begin aggregating acres in spring 2006 NDFU Carbon Sequestration: NDFU Carbon Sequestration Soils data and literature submitted to CCX summer 2005 for 4 management practices Dr. Mark Liebig of USDA ARS Research Center, Mandan, ND prepared documentation of no-till, grass seeding, and rangeland enhancement practices Dr. Robert Gleason, USGS Northern Prairie Wildlife Research Center in Jamestown, ND compiled the wetlands sequestration data NDFU Carbon Sequestration: NDFU Carbon Sequestration Contracts will be written for 4 years with penalties for early withdrawal. Contracts will be written with landowners or long-term lease holders. Tenants can participate with signed agreement from landlord. Producers will be paid the amount of the CCX payment annually less 10% service fee to NDFU. 20% of each annual payment held in escrow until the end of the 4 year contract to insure contract performance. Future Potential?: Future Potential? Low prices for stored carbon will likely not cause much demand immediately Depending on US political climate and concern for environmental issues will determine success of this project North Dakota has about 30 million acres of cropland, 15 million acres native prairie and grasslands, and 2 million of acres of wetlands, and not many acres of forest. Realistically, even if we could achieve enough income to pay real estate taxes, that would be a huge impact to rural economies. ($3-10 per acre) It’s Now Time to STOP!: It’s Now Time to STOP!