How farms can fight climate change

Two market approaches to mitigate emissions

Concern over climate change was one of the reasons I started a career in agriculture seven years ago. Look out the window on any flight, almost anywhere in the world, and you’ll be visually reminded of the scale of transformation that cultivating crops has wrought across the face of our planet. It should be no surprise that the agriculture, forestry, and land use sectors generate a quarter of all annual greenhouse gas (GHG) emissions globally. Embarrassingly, my knowledge of the efforts to combat climate change in agriculture has always been shallow. Despite having visited hundreds of farms, I can’t remember if I’ve ever discussed climate change with a farmer.

So, in search of a good framework, I set out to understand the various ways we can change our agricultural production to reduce GHG emissions. The World Resources Institute’s 2019 Creating a Sustainable Food Future report was a helpful guidepost, highlighting five solution spaces in food and agriculture broadly (examples in italics are mine):

1. Reduce growth in demand for food and agricultural products (e.g. transitioning to more plant-based diets and meat alternatives)

2. Increase food production without expanding agricultural land (e.g. reducing food waste or raising crop productivity, like by helping farmers in India increase how much rice they can produce per unit of land. Average rice yield in the United States is over 3x higher.)

3. Exploit reduced demand on agricultural land to protect and restore forests, savannas, and peatlands

4. Increase fish supply through improved wild fisheries management and aquaculture

5. Reduce greenhouse gas emissions from agricultural production

Though I have plenty of thoughts on the first two solution areas, and given that I am not qualified to comment on the third or fourth, in this post I will just focus on the fifth: reducing emissions from agricultural production. Specifically, I will explore two types of markets in which farmers who adopt more climate-friendly practices get paid for doing so. One is a carbon credit market for sequestered carbon in cropland. The other features premium pricing for crops that were produced with fewer emissions. Given my background, I’ll mostly focus on the United States and how startups are shaping these markets. Where international examples are relevant, I’ll turn to India, drawing on some experience in smallholder agriculture there. 

Baseline

To determine how these approaches will work, and at what scale, I’ll first lay out a baseline understanding of the primary sources of GHGs in agriculture. In the United States, farming activities generated 618.5 million metric tons of carbon dioxide equivalents last year, about 9.3% of total US emissions. The EPA’s latest Emissions and Sinks report tracked four primary sources:

• Fertilization (5.2% of US total) — these emissions overwhelmingly come in the form of nitrous oxide (N2O), which escapes into the atmosphere during and after the application of synthetic fertilizer. Agriculture is the largest source of N2O emissions in the United States, accounting for 73% of N2O emissions. Additional fertilization-related emissions also come in the form of CO2 released in the field application of urea and lime.

• Enteric fermentation (2.7% of US total) — these emissions come from methane (CH4) released in the livestock digestive process. Oft-parodied and politicized as cow farts, including very recently in Burger King’s TV ads for their “low-methane” Whopper, 97% of methane emissions from enteric fermentation come from beef or dairy cattle. 

• Manure management (1.2% of US total) — Methane and nitrous oxide that is released by the treatment, storage, and transportation of livestock waste.

• Other (0.2% of US total) — GHG emissions from burning agricultural residues and from cultivating rice. Outside of the United States, methane from rice cultivation is a much more significant source of emissions, at 2.2% of global GHG emissions on a CO2 equivalent basis. Rice is the primary staple crop in developing countries, and methane is produced by the archaea that thrive when rice paddies are flooded during the growing season. 

When I first saw the EPA numbers, I was confused. Was the picture really that simple? A closer reading revealed that the report categorized at least three other agricultural GHG sources separately, which if included would push total farming emissions to be far greater than 9.3% of US total:

• Release of carbon from the soil during tilling. Tilling (or plowing) soil breaks it up to prepare the seedbed for planting, kill weeds, and bury crop residue from the last season to decompose. However, disturbing soil through tilling releases the carbon dioxide that plants sequester in their biomass and in soils. A leading organic corn farmer in Nebraska once told me that organic farming requirements forced him to till as his only way to control a certain weed, when applying just one pass of herbicide would’ve killed the weed more effectively and left the soil (and the carbon it stored) undisturbed. Ironically, the more environmentally intensive practice of tilling was his only option if he wanted to keep his organic certification, a lesson that organic farming does not necessarily equate to what’s best from a climate change perspective. Anyhow, taking into account the CO2 both emitted and captured by agricultural activities, cropland still sequestered a net of 16.6 million metric tons of CO2 equivalents in 2018. However, this net amount of carbon sequestered every year has fallen over time, declining by 43% since 2005.

• Manufacturing key farming inputs. For instance, the Haber-Bosch process for producing ammonia (most of which is used to make synthetic fertilizer) is very energy intensive, requiring high heat and pressure. The CO2 released by ammonia production alone accounted for 0.2% of total US emissions in 2018.

• On-farm energy use, like burning diesel fuel for a tractor or running a grain dryer to reduce moisture in harvested corn to prolong its storage capacity. The combined emissions from “off-farm” energy to manufacture crop inputs and from on-farm energy usage contribute 3.1% of total annual GHG emissions globally.

The diverse sources of GHG emissions from agriculture create many opportunities for climate change mitigation. The solutions seek to either sequester or abate emissions. All crop farming today already takes carbon out of the atmosphere (sequestration), with the potential to do more. Separately, changing farming practices can avert emissions from ever being generated in the first place (abatement).

Sequestration

The sequestration potential of farms is undoubtedly the sexier of the two solution spaces. During the latest Democratic presidential primaries, I was surprised to see almost all the major candidates campaign on the idea of paying farmers to sequester carbon. Here’s an excerpt of a Pete Buttigieg op-ed in the Des Moines Register, worth quoting at length for how perfectly it captures the allure of sequestration:

“Rural communities — from river towns to tribal lands to farms — are on the front lines of climate change. Yet too often, rural Americans are told they’re part of the problem. […] With scientists indicating our soil has the astonishing potential to absorb as much carbon as the entire global transportation system produces, my administration will prioritize technologies that can boost farmers’ bottom lines while reducing carbon emissions from agriculture to net-zero or net-negative. And we’ll pay growers to maximize land conservation, biodiversity, productivity, and soil health.”

The Terraton Initiative by Indigo Ag, a prominent agtech startup that has raised over $100M in venture funding, proposes a similar solution to achieve its goal (and namesake) of drawing down one trillion tons of CO2 from the atmosphere into soil.

If all of this sounds too good to be true, you would be justified in suspecting that paying farmers to sequester carbon in their soil comes with some hairy problems. In the marketplace for soil-sequestered carbon, demand comes from government or private entities willing to pay for carbon offsets, and supply comes from farmers who can sequester carbon on their farms. Both sides of the marketplace face problems today.

On the supply side, farmers can sequester carbon by not tilling and by planting cover crops. While both of these are legitimate farming practices, I have a hard time seeing either gain widespread adoption in the United States. Not tilling a field is difficult to sustain for multiple seasons. Tilling is eventually needed to offset the soil compaction that results from heavy field machinery passing over every row crop acre multiple times, every season (tractors, for instance, weigh about 10 times as much as a car).

Planting cover crops, or the practice of seeding an alternative crop or crop mixture during the off-season, is the other major on-farm means of carbon sequestration. Even setting aside the sequestration potential, planting cover crops is great for soil health — enriching it with nutrients, offsetting compaction, and reducing erosion. But these benefits have been known for hundreds of years, and yet cover crops still are not widely adopted today. When I tried to sell cover crop seeds in a previous job, I encountered two types of farmers: a minority were experienced users, while the majority did not cover crop due to the expense (at least $30/acre), time, and technical knowledge required. I remember a very advanced corn, soybean, and yellow pea farmer in Nebraska who’d developed a specific seed mixture of more than five different cover crops over many years of experimentation. He didn’t need any agronomic expertise, but was looking for lower prices on a few specific seeds. Cover crops seeds are voluminous and not widely available; even if we’d found him a better supplier, the freight required to get it to his farm would have made the total cost prohibitive to switching. The lack of a robust cover crop seed supply chain is an under-appreciated reason why the vast majority of farmers don’t use cover crops today. I’m hopeful that a startup like CoverCress, which makes a harvestable cover crop, can help fill that gap. 

Even if we could overcome these challenges and achieve widespread adoption of low-till farming and cover cropping (which I’d be thrilled to see happen), two demand-side problems in the market for farm-sequestered carbon would remain. First, the amount of carbon that can be sequestered from not tilling and cover cropping is hard to measure and differs across farms with different soil types, topographical features, and weather conditions. Second, carbon can’t be stored indefinitely in soils, unlike other ways of sequestering emissions (like injecting compressed carbon dioxide underground). Demand for carbon offsets from on-farm sequestration will therefore be lower than for more measurable and permanent means of sequestration that already exist outside of agriculture. My guess is that new technologies will be required to make on-farm carbon sequestration work. For instance, Soil Carbon Company, an Australia-based startup working with the University of Sydney, is currently testing a fungal seed treatment to help crops form long-term carbon deposits in the soil.

Abatement

The market mechanism for incentivizing farmers to avert emissions is very different. It is not based on how much carbon can be held in soils, but on how many fewer GHG emissions can be generated while producing the same (or more) grain. The biggest US row crops — corn, soybeans, and wheat — primarily go to one of three uses: food, feed, or fuel. In all three offtake markets, premium pricing for lower “carbon footprint” grain is emerging. This means that more buyers are willing to pay up for grain produced from farming practices with lower GHG emissions than for grain produced conventionally.

For instance, California’s low carbon fuel standard requires that a growing percentage of automotive fuel come from renewable and low-carbon sources, such as corn ethanol. So a farmer can sell low-emissions corn to an ethanol plant for a premium. In feed, Tyson Foods launched a program in January 2019 to “pilot and scale agriculture practices on 500,000 acres of corn that reduce greenhouse gas emissions […] and maximize farmer profitability.” (Disclaimer: I previously worked for FBN, which is providing monitoring for this program). And in food, large CPG companies and retailers will need to source more low-carbon grain to meet their climate mitigation goals, such as Unilever’s commitment to be carbon-neutral by 2035 or Walmart’s 2013 announcement to reduce fertilizer usage by fifteen of its key suppliers.

So how do farmers actually go about producing grain with a demonstrably lower emissions profile? This is where abatement measures come into play, with the biggest opportunity in fertilizer. Increasing “nitrogen use efficiency” means ensuring more nitrogen fertilizer is actually taken up by crops, and less runs off into watersheds or releases as nitrous oxide. Precision application of fertilizers can dramatically reduce fertilizer usage by allowing farmers to vary the amount of fertilizer applied within a given field. Combining a farmer’s knowledge of his or her ground with monetary incentives to reduce fertilizer usage can produce important gains in nitrogen use efficiency. Another solution is applying fertilizer with stabilizing compounds to slow the release of nitrogen, aligning nitrogen availability more closely to a crop’s needs throughout its growth stages. Finally, more growers can adopt nitrogen-fixing bacteria as “biofertilizers,” like those commercialized by startups Pivot Bio and Kula Bio. A range of other emerging products like biostimulants and plant growth regulators also have the potential to reduce synthetic fertilizer usage. I made a landscape of these emerging bio products while at FBN, for those curious. 

On a related note, I’ll also mention that governments should pass regulations to ramp up the share of efficiency-enhanced fertilizers to curb fertilizer-based emissions. And countries like India and China with massive federal fertilizer subsidies should scale them back over time, so that fertilizer is not over-applied. I learned that the Indian government’s fertilizer “scheme” was once the biggest government subsidy program in the world. A step in the right direction is Indian Prime Minister Modi’s policy that all fertilizer be coated in neem, a nitrogen stabilizer that slows its release. Governments should also push for more renewable energy sources in electricity generation, which will reduce the emissions from on-farm energy uses like drying and from the manufacturing of farm inputs. 

On livestock-related solutions, the addition of a compound called 3-nitrooxypropan (3-NOP) to cattle feed has been shown to result in a permanent and significant reduction in their methane emissions. 3-NOP is made by DSM, a Dutch corporation. And emissions from manure, another major emissions source, can be reduced by implementing processes that separate solids from wet manure, which can also decrease a farmer’s costs of disposing manure (so it is a “negative cost” climate mitigation measure). With a low-methane burger already on the menu at Burger King, advances here can also translate into demand for low-methane beef and dairy products, paralleling demand for low-carbon grains. 

These abated emissions from various agricultural practices are much easier to measure and prove than those sequestered in soil. The emissions from producing a ton of synthetic fertilizer, or from burning a gallon of diesel fuel to run a tractor, are not scientifically unknown or highly site-specific. This is the major advantage of abatement solutions and why I believe paying farmers more to produce low-emission grains will give them the best ROI and be the fastest at driving adoption of more climate-friendly farming practices. 

Conclusion

I am optimistic about market mechanisms that can put farmers on the front lines of combating climate change by paying them. But the dual framework of either paying farmers for soil sequestration or paying them for grains produced with abated emissions is by no means comprehensive, and I would love to learn about other approaches. For instance, a perennial wheat variety called Kernza developed by The Land Institute can sequester more carbon than conventional (annually grown) wheat, due to Kernza wheat’s deeper root structure. Kernza has also become a commercial brand and is featured at Cafe Gratitude in Los Angeles, in the packaged foods of Cascadian Farms (owned by General Mills), and by Patagonia Provisions. In short, it’s a sequestration-based approach that is creating its own offtake market with a consumer-facing story, using a wheat variety developed by a nonprofit, not a corporation or startup. 

In this post, I also haven’t focused at all on the considerable changes in agricultural practices that will be required to not only mitigate climate change but also adapt to its effects. Work on adaptation includes propagating drought-resistant seed varieties (like by ICRISAT and other CGIAR centers) and developing remote sensing technologies so farmers can grow crops under drier and hotter conditions. 

Finally, a two realizations from researching all of this: First, our thinking about food systems over indexes on what’s happening at the farmer and consumer levels. This is why issues like methane from beef cattle, ugly produce, and soil sequestration of carbon get so much play in the popular discourse. But our food system is a lot more than that. How fertilizer is made, and what happens to it after it’s applied, are just as important to GHG emissions. And so are underlying advances in crop productivity, which enable us to yield more crops with less land, less energy, and less fertilizer. These advances begin in traditional university and corporate research settings, and include scientific breakthroughs like gene editing. Continuing the steady advances in crop productivity kicked off by the Green Revolution might actually be what we should care about most if our goal is to feed a growing global population equitably while reducing GHG emissions. 

My second realization was that not enough work is being done in agriculture that is specifically focused on climate change. While “regenerative agriculture” is a term with growing relevance, it calls for far more than just reducing GHG emissions. Regenerative agriculture practices seek to reduce water usage, reduce fertilizer runoff, improve our soils, and use organic pesticides, among other goals. Some of these practices are compatible with reducing GHG emissions, but some are not. And this is where conflating climate change mitigation goals with environmental aims can actually muddy the waters. I would like to see a more specific focus on GHG-reducing technologies and markets for farmers, not at the exclusion of the work of regenerative agriculturalists, but parallel to it.