Manure

In today’s uncertain economy, business owners from all walks of life are looking for opportunities to create new income streams, cash flow and decrease potential liabilities. Farmers are in a unique position to use carbon credits as a means of achieving all three goals.

For anyone involved in dairy these days, there are an increasing number of options to “go green.”

Farmers have long balanced environmental stewardship with profitability as part their daily lives. The idea of doing well by doing good provides part of the foundation to the proposed national cap-and-trade program of the incoming presidential administration and Congress. Many farms across the country have already reaped financial and environmental benefits by developing projects that supply carbon credits into the U.S. carbon marketplace – benefits like revenue, biogas production for energy use on the farm, better neighbor relationship management, decreased odors, rainwater diversion, reduction of the farm’s carbon footprint and many other real savings.

The increasing pressure on organizations and individuals to take action to slow the effects of climate change, together with the growing carbon market in the U.S., can present new opportunities for dairy farmers. The generation of electricity and carbon offsets from projects that reduce greenhouse gas emissions (GHG) can provide additional revenue and reduce farm operating costs.

Question 1: With the recent downturn in the economy, is the carbon market still a viable option for farmers?

As lenders shy away from risk and raise borrowing costs, the carbon market will likely become of greater importance to the viability of capital-intensive projects. In spite of the current economic turmoil, the incoming Obama Administration has signalled its intention of regulating greenhouse gas emissions. Although it is too early to tell what sectors will be covered by a national cap-and-trade system, it seems likely that agriculture projects will be able to generate emission offsets for sale to capped entities.

The following update is provided by Dairy Management Inc. (DMI), which manages the national dairy checkoff program, is a producer-funded, nonprofit domestic and international planning and management organization responsible for increasing sales of and demand for U.S.-produced dairy products and ingredients.