New programs in Mississippi will pay timber and farmland owners to store carbon as part of a growing market aimed at reducing emissions and slowing climate change.
Landowners can receive what are called “carbon credits” based on how much carbon they sequester, or store, in their trees or soil, rather than releasing it into the atmosphere. The landowner can then sell those credits for money through an exchange, usually to companies looking to offset their own emissions.
The concept has existed for a while, but has picked up recent momentum as companies anticipate more government regulations around emissions.
With an abundance of forest and a large timber industry, Mississippians are growing curious about the new potential for income.
One timber carbon market exchange, a California-based company called NCX, began its first contracts with landowners in the state earlier this year. NCX is working with Mississippi State University to educate interested landowners on how they can earn credits for their trees.
“The whole point is to get you to postpone a harvest that you were willing or ready to do right now, or there was some risk of that possibility,” explained MSU Extension forestry economist Shaun Tanger, who’s leading the public engagement effort.
Tanger said the interest is taking off in Mississippi, where the timber market is a significant part of the economy relative to other states.
About 63% of the state is covered in forest, which feeds an industry valued at over a billion dollars annually, and which supplies products like lumber, poles and plywood. A 2008 MSU study found that the industry accounted for nearly one in ten jobs in the state.
“There’s an abundance of working forest relative to other parts of the country, and even some other states in the southeast,” Tanger said, adding that only maybe Alabama and Georgia compete with Mississippi’s timber supply and expertise. “We just do a really good job of growing trees here.”
To participate, foresters – usually those with pine trees over at least a few dozen acres – have to defer harvesting for a year, and in exchange receive a credit based on the trees’ value, based on traits such as age and species, which help show the risk of them being harvested. Foresters can then auction those credits to companies looking to offset their own emissions, and usually receive between $5 to $20 per acre.
Despite the low prices, Tanger said long-term the carbon market will induce competition, which is always good for business. That’s especially the case because there’s no shortage of of trees in the state or places to grow them, he explained.
“The competition initially increases demand, and the supply is fixed,” he said. “But supply responds to demand, so longer term the outcome is going to be more trees on the landscape, because the mills are going to need the trees, the carbon exchanges are going to need the trees, and there’s a lot of acres that can be put into trees.”
More demand also leads to better management and thus a healthier forest, Tanger added, which leads to better carbon sequestration and other natural improvements, like to surrounding watersheds.
Those interested can learn more by reaching out to the MSU Extension forestry program.
Carbon in the soil
The other growing carbon market is that for soil, which encourages farmers to adopt conservation practices on their land.
Compared to the timber market, though, the soil carbon market is the “wild, wild West,” said MSU Extension soil specialist Larry Oldham.
“We truly are in the pioneer phase of this,” Oldham said. He explained that there isn’t an exchange aimed at Mississippians like there is for timber, although there are farmers in the state earning carbon credits.
One company coordinating credits is Truterra, part of one of the largest farmer-run cooperatives in the country, Land O’ Lakes. Farmers interested can take a survey on Truterra’s website to see if they’re eligible and learn more about the program.
Sequestering carbon in soil centers on four main practices: keeping the soil covered as much as possible, decreasing tillage, rotating crops, and using cover crops, which protect the soil after the harvest. Those practices not only help retain carbon, but improve soil health in general as well.
In order to receive credits, farmers must document that they’ve adopted those conservation techniques. Mississippi has been relatively slow to incorporate those practices, Oldham explained, which means a lot of farmers in the state could stand to benefit from the carbon market.
A downside, though, is that farmers who were already doing those practices for years wouldn’t qualify because they can’t document a change in their management. Farmers are also skeptical as to whether the payments, which are similar rates to those in the timber market, are worth making changes, Oldham said.
But carbon sequestration in soil has several long-term benefits, Oldham explained: improving soil health will help farms feed a growing population, and the same practices for storing carbon will also limit erosion and decrease the nutrient runoff in the water supply.