Farmers enrolled in a program that rewards them for reducing greenhouse gasses are finding the market for their carbon credits has shrunk amid the recession and uncertainty about climate legislation being crafted by Congress.
Carbon dioxide credits are fetching about 60 cents a metric ton, down from a high of about $7 a year ago, according to the National Farmers Union, which operates a carbon credit program.
"We're just kind of treading water at this point," says Roger Johnson, president of the National Farmers Union and former North Dakota agriculture commissioner.
About 3,900 farmers and ranchers in 40 states are enrolled in the program, with about a quarter in North Dakota, where it began 3 years ago, says Dale Enerson, director of the National Farmers Union program.
The program's participants in 2006 and 2007 captured carbon dioxide from 2.8 million acres, or about the amount produced by 320,000 cars per year, Enerson says.
Farmers usually receive payment for their credits — typically a few thousand dollars — in July. But those checks haven't been sent this year because most of the carbon credits pooled in 2008 have yet to be traded, Johnson and Enerson says.
Enerson says some companies that had participated in the program have shuttered due to a harsh economy.
"Some of their factories have been closed, so they are emitting less or not at all," he says. "So there is no need for an offset."
The program costs about 70 cents a metric ton to run, or about a dime more than what carbon dioxide credits are now fetching, Johnson says. That would leave farmers with almost nothing if the credits were sold.
Instead, the program is holding off on selling the credits, which are good until traded and used.
There's hope the market will bounce back if Congress passes legislation limiting how much carbon dioxide power plants and other major polluters can release. But it's unclear whether agricultural credits will be included in the final bill, Johnson and Enerson says.
"The market is fairly low right now," Enerson says. "But farmers know that grain in the bin could be worth more in the future."