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Carbon credits have been a hot topic in the ag world over the past few years. Some say they’re a great new source of income for farmers, while others say they’re too risky. Hunter Jones with consulting company Ernst & Young discusses the trend in the carbon credit market and the different types of carbon credits.
Thomas Capps: Carbon credits, a way to diversify or a big risk to the family farm. Hello, and Welcome to Tennessee Home Farm Radio. I’m Thomas Capps
Hunter Jones: Right now it’s it’s still up in the air in many ways, but there are opportunities for a lot of farmers.
Thomas Capps: Carbon credits had been a hot topic in the ag world over the past several years, farmers across the country have been approached by large corporations wanting to purchase carbon credits from them on their farms. What exactly is a carbon credit? Hunter Jones with a consulting company Ernst and Young says there’s different types.
Hunter Jones: I think you really bucketed into into three different ones. So the first is your carbon sequestration. So essentially, how are you capturing carbon in the soil The other one that you’re thinking about is your carbon avoidance credits. So how are you trying to reduce any kind of harmful impact to the environment
Thomas Capps: Those different types of carbon credits potentially could create opportunities for farmers to make extra money
Hunter Jones: It’s such a wide range of opportunities for farmers. But I think as agriculture continues to develop, and the farmer looks to diversify their operation, and carbon credits could be an opportunity for them. And again, yes, we’re still in the very early stages, there’s several different types of of carbon credits out there, several different markets out there to sell them on
Thomas Capps: And the dollar amount these companies are willing to pay farmers to do this is high
Hunter Jones: In the US alone, we’re seeing the total carbon credit market is anywhere north of $7 billion. And between now and 2030 it could be as high as over $100 billion, that a lot of these large multinational companies are willing to pay for carbon credits. And again, that that can continue to change as we start seeing other you know, government regulations or government subsidies, whatever it may be. Right now there’s there’s not a lot of that in the market, but that could also change the game.
Thomas Capps: Experts in the ag industry, though say it’s important for farmers to be cautious as they navigate this new avenue and to seek legal counsel before signing any contracts to participate in carbon credits for Tennessee Home and Farm Radio. I’m Thomas Capps.
