Congress and Biden Administration Move to Support Climate Solutions in Agriculture
Congress and the Biden Administration recently have taken substantial steps toward facilitating land-based solutions to global climate change, including measures specifically focused on agriculture. These actions would leverage public and private investments and technical expertise to support farmers and foresters as they adopt both known and novel greenhouse gas (GHG) reduction and carbon-sequestering land management practices. These actions also underscore increasing efforts in government and the agricultural industry to find market-based and sustainable solutions to both mitigate and adapt to the effects of climate change. As the focus on agriculture, forests, and land-use continues, companies in those industries should remain attuned to related risks and opportunities.
- What Happened: A bipartisan group of senators reintroduced, and the relevant committee quickly approved, the Growing Climate Solutions Act to support agricultural carbon offset markets, and the U.S. Department of Agriculture (USDA) expanded the Conservation Reserve Program and other investments to incentivize climate change mitigation practices on farmland.
- Who’s Impacted: Farmers, foresters, and carbon offset markets may be directly impacted, and companies interested in participating in carbon offset markets may wish to provide input on the pending legislation and potential regulatory actions to follow.
- What Should Companies Do in Response: USDA recently requested public comment on climate-smart agriculture and forestry generally, and the comment period closed on April 29, 2021. However, should the GCSA be enacted into law, USDA is likely to seek further comment regarding the proposed Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Certification Program, and impacted entities should consider participating in that process. USDA may also seek comment on other climate change and conservation programs.
Senators Act to Facilitate Agricultural Carbon Markets
On April 20, 2021, Senators Mike Braun (R-Ind.) and Debbie Stabenow (D-Mich.) re-introduced the Growing Climate Solutions Act (GCSA), which they had first introduced in June 2020. This bill is aimed at increasing and encouraging nature-based GHG reductions in the agriculture and forestry sections. The bill would not mandate action, but would instead provide incentives and supports. The bill includes program funding for at least five years, has substantial bipartisan support in the Senate (with 21 Republican, 20 Democratic, and 1 Independent co-sponsors), and was unanimously approved by the Senate Agriculture Committee only two days following introduction.
If enacted into law, the bill would require the U.S. Department of Agriculture (USDA) to establish a Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Certification Program, which would enable third-party consultants to become “USDA certified” to provide growers with technical expertise or verify compliance with rigorous carbon market standards. The bill would also require USDA, with stakeholder and industry input, to publish a “one stop shop” website of information about agricultural carbon market participation, including a list and description of standards of widely used industry protocols for GHG credit markets.
The GCSA is designed to connect private-sector capital with farmers, ranchers, and private owners of forests. Indeed, the bill would not create a federal carbon credit market, but instead would support existing and emerging private, voluntary markets. Such markets are becoming increasingly popular to potentially motivate farmers, foresters, landowners, and others to adopt practices that demonstrably reduce GHG emissions or sequester carbon for extended periods in wood products or soils. By supporting such markets rather than competing with them, the GCSA would build on pre-existing private carbon offset market structures to help break down barriers to adopting these practices.
Following its rapid approval by the Senate Agriculture Committee, the GCSA may be brought to the Senate floor for a vote as a standalone bill, or could be rolled into a larger legislative package.
USDA Expands Land Conservation Program with Climate Focus
On April 21, USDA moved to expand the existing Conservation Reserve Program (CRP) to offer participants higher payment rates and new carbon-smart activity incentives to focus participants on climate change mitigation. CRP is a land conservation program that offers farmers yearly rental payments to remove land from production and take certain actions to improve environmental health and quality. The revised program includes a Climate-Smart Practice Incentive to pay farmers up to 50 percent more than current rates to implement activities such as tree and permanent grass establishment, wildlife habitat development, and wetland restoration.
USDA seeks to enroll up to 4 million new acres in CRP in 2022 (20.8 million acres are already enrolled) and an additional 3 million acres in 2023, with a particular interest in reducing GHG emissions and sequestering carbon.
USDA Increases Investment in Climate-Smart Projects
In addition to expanding CRP, USDA announced $330 million in new investments in 85 Regional Conservation Partnership Program (RCPP) projects. RCPP projects combine public and private investments to fund natural resource conservation projects on private land, and the 85 new projects are designed to address climate change, enhance soil health, and provide other important environmental and agricultural benefits.
USDA is also dedicating $25 million to On-Farm Conservation Innovation Trials, which support the adoption and evaluation of innovative conservation approaches on agricultural lands. Project priorities include climate-smart agricultural solutions and soil health practices.
Agriculture and natural solutions feature prominently in President Biden’s recently announced “nationally determined contribution” (NDC) under the Paris Climate Accords, which sets a new target for the United States to achieve a 50–52 percent reduction in economy-wide net GHG pollution from 2005 levels by 2030. Specifically, the White House fact sheet for the NDC states that “[t]he United States can reduce emissions from forests and agriculture and enhance carbon sinks through a range of programs and measures including nature-based solutions for ecosystems ranging from our forests and agricultural soils to our rivers and coasts.” As a major policy focus for the Biden Administration, and with bipartisan support in Congress, we expect to see substantial growth in programs and markets to support climate-focused agricultural and silvicultural practices across the country.
Beveridge & Diamond’s Air and Climate Change practice group helps clients navigate all aspects of carbon markets and climate change programs, including those in the forest and agriculture sectors. We represent companies, growers, forest owners, and other entities during efforts to develop and monetize carbon offset projects, and in relation to governmental programs and regulations. Our Agriculture industry group works with clients to identify, establish, and implement effective regulatory, commercial, and legislative strategies to achieve or exceed business objectives. We represent both large and small companies that develop, manufacture, distribute, or use seeds, crops, trees, livestock, and pesticides. For more information, contact the authors.