New analysis from a team of agricultural economists, environmental scientists, and experts suggests that global policymakers can support a carbon-neutral agricultural future by changing the way we reward farmers who utilize "climate-smart" practices when growing crops used in the production of low-carbon biofuels.
Biofuel markets have already established mechanisms for accounting for the carbon intensity of different crop types and have well-developed channels for transferring payments from energy markets to biofuel producers. But those are separate from climate-offset markets, requiring farmers to either enroll in a government-backed conservation program or sell carbon credits to third-party companies to be properly compensated for their sustainability efforts.
To streamline the process and spur participation, the research team, which includes Agricultural and Resource Economics (ARE) professor David Zilberman and alum Madhu Khanna (PhD '95 ARE), suggests merging the separate markets into a single channel open to both farmers and others in the biofuel supply chain. This recommendation was first published in Science earlier this month.
"Currently, our biofuel policies don't reward farmers for adopting climate-smart practices," explained Khanna, the paper's lead author and a professor of agricultural and consumer economics at the University of Illinois Urbana-Champaign. "For example, they treat all corn grown for the corn-ethanol market the same, whether or not the farmers adopt those types of practices. By accounting for differences in practices implemented at the farm level and paying a premium for corn grown with climate-smart practices for corn ethanol, biofuel policies can incentivize adoption of these practices."
The notion of climate-smart agriculture was introduced by ARE alum Leslie Lipper, PhD '99, a former FAO official who later co-authored a book with Zilberman and others on the topic. This notion comes as a compromise between the European desire to introduce technology to reduce carbon emissions and developing countries' desire to enhance agricultural productivity. Identifying climate-smart practices and technologies can be a challenge; in the US, practices like no-tillage, crop rotation, and cover-cropping are still being researched and developed. And even with the research, these practices still need to be adopted by farmers to be effective.
Merging the biofuel and climate-offset markets into a single channel can better reward farmers and others in the biofuel supply chain whose use of climate-smart practices lowers the carbon intensity of their operations. The authors note that this approach could subsequently be broadened to reward farmers for adopting climate-smart practices for crops to supply food and feed markets as well.
One of the challenges with this approach is verifying that farmers implement the practices they have pledged to follow. The researchers suggest that emerging digital technologies that can document farming practices and accurately calculate their carbon intensity can simplify this process, the researchers report. Certification programs could allow independent verification that feedstocks were sustainably produced.
Another concern is the chance that farmers will implement and then abandon various climate-smart practices." If they do it one year and not the next, they'll sequester the carbon and then, perhaps, release it back to the atmosphere the following year," Khanna said. "But we can design incentives for longer-term soil-carbon sequestration by having farmers sign longer-term contracts, and relating the size of the payments to how long the farmer agrees to keep that carbon in the ground."
Zilberman notes that modern biotechnologies like CRISPR, which could be used to increase crop yields and improve crop resilience, are significantly underutilized in the development of climate-smart practices.
"Greenhouse gas emissions from corn biofuels have declined significantly over time and will decline further with continuous investment in research and development," he said. "These technologies should be included as part of climate-smart practices. We cannot wait until we find the optimal program to address climate change. By experimenting with new programs and taking advantage of new science, we learn by doing and will reach our goals."
Read more about the study at the University of Illinois website.
