Market Based Approach for Farmers Going Green

The Lempert Report
November 06, 2015

New practices in development are providing financial incentive for farmers to go green.

While most of us not only strive to be, but see the benefit in being green, there’s no doubt that financial incentives provide extra motivation.  And for Farmers these incentives are in the works. 

Regulators are currently working on the idea of establishing environmental markets to allow farmers to make money off of their conservation practices.The idea behind these new ideas is that farmers could generate environmental credits by farming in ways that store carbon, filter out water pollution, or preserve wildlife habitat. These credits could then be bought, sold, and traded by companies that need to balance out their own emissions or pollution.

A recent article in NPR makes note of a few places that already have these ideas in the works. For example, in Oregon, farmers are keeping water cool and earning money at the same time, by planting trees along a salmon stream.  And over in California, power plants, who are under orders to cut carbon are trading offsets with rice farmers who have changed practices in order to cut methane emissions.

Robert Parkhurst, who works on greenhouse gas mitigation with the Environmental Defense Fund told NPR; "Rice growers are implementing practices that reduce methane emissions, at the same time providing very valuable habitat for water birds."

So why is this market-based approach gaining interest?  Most significantly, it can lower the cost of cutting pollution. As NPR says “markets allow farmers to auction off conservation improvements to companies pushing pollution limits. Those improvements are generally less expensive than paying fines or installing expensive equipment.”

While many farmers work towards being green, they still run a business, and finances come first. And by the same token, Congress surely won't pick up that bill, which makes these market ideas something worth seriously considering.