With over 170 different carbon markets globally, across all industries, it begs the question, are we missing opportunity?
This was the question that Travis Kraft, director of U.S. Row Crops for Locus Agricultural Solutions, posed at the National No-Till Conference, held January 10-13, 2023.
There are two base models when it comes to carbon credits: compliance and voluntary. A compliance market is created when regulations require offsets and reductions, like what is being created in Canada, versus voluntary which is more common in the U.S.
“In [the voluntary model], you are part of the transaction between the buyer and the seller, as well as the grower who is producing the credits. All you have to do is qualify for a program and you’re going to make that money. You don’t have to comply with specific regulations,” he explains.
It doesn’t matter which model you are working with, there’s something all 170 carbon markets have in total — and that’s the legacy they will leave behind.
“The fact of the matter is this: these statistics tell us that a third of the population of our growers right now will be handing down this operation within the next five years. So what happens to that second generation? And what happens to the generation that’s just trying to come back to the farm?” Kraft asks. “What things can we do now to set them up going forward, and if we can provide an income stream that is consistent — not changing anything — and allowing them to make additional finances and financial opportunities going forward? That’s legacy.”
Agriculture has a very specific opportunity, says Kraft, as we are the least looked at when it comes to these markets.
“We are also the one with the largest growth opportunity. U.S.-based carbon credits are by far the most valuable, and they’re the most sustainable going forward. And also, we have a lot of ground that can produce as many credits as possible to then be sold into the market as a whole.”
Check out the full conversation between Kraft and RealAgriculture’s Kara Oosterhuis, filmed at the National No-till Conference at St.Louis, Missouri, below: