• To meet Biden’s new climate goal, forests and farms must sequester a lot more carbon
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Guest Author
Emily McGlynn

To meet Biden’s new climate goal, forests and farms must sequester a lot more carbon

A new One Gigaton Land Carbon Bank” could unlock billions of dollars a year to help U.S. landowners grow” a hot new commodity: carbon.
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Emily McGlynn was deputy associate director for energy and climate change in the Obama White House Council on Environmental Quality and is currently a doctoral candidate in resource economics at the University of California, Davis. This contributed content represents the views of the author, not those of Canary Media.

The fanfare surrounding President Biden’s international Climate Summit is in the rearview mirror. His administration now needs to start rapidly putting into place the policies and programs required to reduce U.S. greenhouse gas emissions by 50 percent from 2005 levels over the next decade. A key component will be storing more carbon in trees and soils.

The U.S. Department of Agriculture has already begun soliciting ideas for scaling up climate-smart agriculture and forest practices, and a pending Senate bill would help landowners participate in voluntary carbon markets. Biden even recognized this need in his recent address to Congress, describing a future with farmers planting cover crops so they can reduce the carbon dioxide in the air and get paid for doing it.”

But achieving this future will require significant support from both government and the private sector, mobilizing major new incentives that shift the fundamentals of the agricultural and forestry markets. I propose a pathway to accelerate U.S. carbon sequestration: the One Gigaton Land Carbon Bank.” This program would expand incentives for storing carbon in forests and farmlands by billions of dollars per year, harnessing the power of the federal government and net-zero greenhouse gas commitments from the world’s largest corporations.

We know that storing more carbon in U.S. landscapes will be key to zeroing out greenhouse gas emissions over the next 30 years. Strategies for reaching economywide net-zero emissions consistently require U.S. lands to maintain and even accelerate carbon storage rates, with landowners across the country planting new trees, delaying tree harvest, deploying cover crops and more. An enhanced carbon sink” can reduce economywide decarbonization costs by counterbalancing remaining emissions from heavy industry, livestock production and other sectors where abatement is expensive.

Unfortunately, the U.S. carbon sink is currently headed in the opposite direction. U.S. forests and soils have consistently removed roughly 800 million metric tons of carbon dioxide from the atmosphere each year for the past three decades, equivalent to 10 to 14 percent of economywide U.S. emissions. But increasing wildfires, storms and higher temperatures, a slowdown of natural forest expansion and rapid urban development could reduce landscape CO2 sequestration substantially in the U.S. by 2030.

With the right policy support, U.S. forests and soils could sequester more than 1 billion metric tons of CO2 annually (or 1 gigaton), equivalent to today’s emissions from electricity use in all U.S. homes and businesses. Carbon-storing incentives would need to be set competitively, encourage broad participation and build landowner confidence that growing carbon” works for their bottom line. This is where the One Gigaton Land Carbon Bank would come in.

To be meaningful, such a program would need to unlock billions of dollars in annual land carbon payments. Averaging predictions across eight studies and 19 scenarios, the U.S. land carbon sink could drop to 600 million metric tons annually by 2030. To ramp up to 1 gigaton, an additional 400 million metric tons of CO2 storage would be required each year. Nearly two decades’ worth of research on carbon sequestration costs suggests this will require incentives of up to $40 for each new ton of CO2 stored (see left side of the figure below). In the long term, a $40-per-ton carbon incentive could increase the sink by 600 million metric tons every year as trees age and their carbon sequestration rates increase (right side of figure below).

If the federal government foots the entire bill, annual outlays could reach $15 billion, more than triple the U.S. Dept. of Agriculture’s current conservation budget. Over 10 years, the total would amount to only 8 percent of the $2 trillion investment required to decarbonize the U.S. energy sector — still a sizable challenge.

One option is to take advantage of corporate net-zero pledges (see recent announcements from Amazon, Google, Microsoft, Visa and many others), which are likely to create large-scale demand for land carbon credits. For example, Apple recently launched a $200 million Restore Fund to support forest restoration projects, with a goal to offset 25 percent of its total supply-chain emissions.

Offset markets have faced heavy criticism over the past decade. Environmental justice advocates argue that allowing fossil-fuel emitters to buy away their emission-reduction obligations harms communities in heavily polluted areas. Critics also point to the potential for lack of transparency, lack of additionality (some offset projects would have happened anyway, even without incentives), impermanence (stored carbon can be released prematurely, through harvest or natural disturbance) and leakage (global agricultural and forestry markets can drive carbon loss in unprotected regions).

A well-designed Land Carbon Bank could address many of these challenges. First, the bank could act as an exchange platform via which landowners offer carbon credits at the prices needed to finance their sequestration projects and potential buyers bid the prices they are willing to pay. In the early days of the exchange, the U.S. Department of Agriculture could act as the buyer of last resort, guaranteeing a minimum carbon credit price to forest and agriculture project developers. Providing a minimum price would ensure landowners are paid the true costs of long-term carbon storage projects, including all operational and opportunity costs, making projects more likely to be truly additive. The exchange would also provide valuable transparency, avoiding opaque bilateral credit transactions.

Second, the bank could require that any participating projects follow best-practice standards for permanence and additionality. Ensuring consistent, high-quality and comparable carbon credits can create significant value for corporate buyers, who otherwise would need to manage reputational and other risks in sourcing their own credits.

Third, the bank could be supported by a USDA-managed land carbon monitoring system, using the best available remote-sensing data along with existing plot-based measurements. This would simultaneously build confidence in the effectiveness of land carbon projects and eliminate the costs of monitoring for landowners and project developers.

The program would require capacity-building at USDA, new carbon monitoring infrastructure and research investments to reduce carbon accounting uncertainty. It would also take time to build landowner trust and scale up enrollment. To make sure the U.S. land carbon sink is aligned with 2030 climate goals, the Biden administration should work to launch the bank as soon as possible.

(Article image courtesy of Rich Herrmann via Flickr Creative Commons license)

Emily McGlynn was Deputy Associate Director for Energy and Climate Change in the Obama White House Council on Environmental Quality and is currently a PhD candidate in resource economics at UC-Davis.