USDA seeks ‘climate-smart’ demonstration projects

Despite the potentially enormous benefits of environmental farming practices, only 2% of carbon offsets currently sold originate in the agriculture sector, a lack of participation the U.S. Department of Agriculture is seeking to remedy by soliciting input and ideas through Nov. 1.

There’s still a long way to go in figuring out how to facilitate environmental credits that are fair, credible and cost-efficient, based on a recent webinar hosted by the Colorado Livestock Association.

The concept of “climate-smart agriculture” became priority one at USDA after President Joe Biden signed a sweeping executive order in January to address what he referred to as a climate crisis.

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On the CLA webinar, Director of USDA’s Office of Energy and Environmental Policy William Hohenstein explained that the department is essentially taking an “all opportunities approach” by prioritizing climate-smart improvements within existing programs such as Environmental Quality Incentives and Conservation Stewardship, and creating new partnerships with a broad array of research institutions and supply chain participants.

In the broad framework he outlined, Hohenstein said agriculture had the potential to reduce greenhouse gas emissions and sequester carbon through improvements in soil health, while building greater resilience to drought and climate change, conserving fragile land and developing new farm-based sources of renewable energy.

He stopped short of saying USDA was prepared to define exactly what climate-smart means, however, citing the need for more public input first.

“Our intention is to move in that direction,” he said. “One of the things we’ve concluded is that confusion in the marketplace has reduced confidence that these benefits are real and it’s undermining the effort, so we want to address that. At the same time, we know we don’t have all the answers.”

Honing the concept is also necessary if the U.S. wants a seat at the table in shaping consumer messaging and regulatory guidelines around the world.

“This is something that’s happening internationally, and we’d like to get out ahead of it,” he said. “We want to make sure how it’s defined works for U.S. producers.”

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Weather can be a big factor in the soil’s ability to store carbon. Hohenstein was asked whether farmers would be penalized if droughts erode carbon storage in dry years.

“That would not be the intent, to penalize farmers for things outside of their control,” he said. “That said, long-term changes in the climate system might affect the ability of some soils to store carbon.”

He was also asked if USDA would allow the marketplace to determine carbon payment rates. He was skeptical market values alone could dictate the proper incentives.

“In many ways, these environmental goods are external to the marketplace, and so farmers don’t always get recognized for that,” he pointed out, adding that conservation is a public good with broad benefits that go beyond the individual farmer or livestock producer.

But determining how best to incentivize and reward environmental practices is a tall order, and USDA is seeking help to accomplish it.

In late September, during an appearance at Colorado State University’s Salazar Center, Secretary of Agriculture Tom Vilsack announced the department would spend $3 billion to launch large-scale pilot projects. Formal feedback, due by Nov. 1, will be used to fine-tune the initiative and establish the guidelines for a notice-of-funding.

Specifically, USDA wants to know how current climate markets are working, how criteria should be quantified, evaluated, reviewed and verified and through what protocols, and how to include historically underserved communities and small farmers who don’t currently participate in the federal farm program.

The first funded projects could be selected by early next year.

If the prior comment period following Biden’s initial executive order is any indication, USDA is likely to get considerable feedback.

Back in March, the department received 2,700 comments in 25 days, Hohenstein said, which became the basis for its current approach. The comments brought out many of the barriers holding back wider adoption.

“We want to develop strategies that work for all farmers,” he said. “Many of them are already doing good things, and they don’t want to get left behind because they are already part of the baseline. We also want to be inclusive, with a focus on small and disadvantaged producers, and include technologies and practices that work for them.”

“One thing we heard is that the lack of technical assistance will be a barrier if we don’t address it,” he added, emphasizing that the department has stepped up its outreach and collaboration with the land grant extension service and other sources of expertise.

The department also heard concerns that much of the existing conservation data is five years old or more.

“If we are going to tell the story of the benefits conservation is providing, we’re going to have to keep that data up-to-date,” Hohenstein said.

As for monetarily rewarding farmers and livestock producers for their environmental contributions, the payment model the department deems most feasible at the current time would connect carbon credits to the actual commodity, meaning buyers would essentially purchase an environmental credit at the same time they purchased the commodity.

Hohenstein said that would likely take the form of a “booking claim,” a certificate of authenticity, but would not necessarily require traceability at every intermediary step in the supply chain.

High transaction and verification costs are one of the stumbling blocks that have reduced net payments to farmers and limited participation, he said.

Aggregating farmers together might help spread transaction costs across a broader group and also expand the opportunity for smaller farmers to participate, he added.

One of the department’s goals in soliciting input is to create a “brain trust” to help move the initiative forward, he said.

The request for comment is posted in the Federal Register at Regulations.gov.

This article originally appeared on LA Junta Tribune: Dept. of Agriculture seeks ‘climate-smart’ demonstration projects