The last fertilizer trading market, at the Chicago Climate Exchange, died and closed due to nobody wanting to buy the brand of fertilizer they were selling. Besides that example, I have to think this might not fare any better, simply because farmers really don’t want yet another intrusion into their lives by the Maryland Department of the Environment.
From the University of Maryland:
Rewarding Eco-Friendly Farmers Can Help Combat Climate Change
UMD Study Advises State on Creation of ‘Nutrient Trading Market’
COLLEGE PARK, Md. – Financially rewarding farmers for using the best fertilizer management practices can simultaneously benefit water quality and help combat climate change, finds a new study by the University of Maryland’s Center for Integrative Environmental Research (CIER).
The researchers conclude that setting up a “trading market,” where farmers earn financial incentives for investing in eco-friendly techniques, would result in a double environmental benefit – reducing fertilizer run-off destined for the Chesapeake Bay, while at the same time capturing carbon dioxide headed for the atmosphere.
The study, Multiple Ecosystem Markets in Maryland, advises the state’s Department of the Environment how to set up a “nutrient trading market,” as proposed in the 2008 state climate action plan. This nutrient trading would operate alongside markets that sell carbon dioxide credits. The CIER study examines the effects of operating both markets simultaneously.
In these markets, farmers who reduce pollutants below a set level would earn credits. They would sell these credits to other operators, such as sewage and water treatment facilities or power plants that have difficulty meeting environmental targets. No direct government subsidies would be involved.
In these markets, farmers who reduce pollutants below a set level would earn credits. They would sell these credits to other operators, such as sewage and water treatment facilities or power plants that have difficulty meeting environmental targets. No direct government subsidies would be involved.
“Everybody can and should win from these markets,” says principal investigator Matthias Ruth, who directs the University of Maryland’s Center for Integrative Environmental Research. “This could represent an extra revenue stream for farmers, as well as an incentive to use the best nutrient practices that can help clean up the Bay and fight climate change. Taking these conservation steps costs the farmers money, and at the very least a reimbursement for their investment is well-deserved.”
Maryland is one of a handful of states considering whether to create these multiple markets. One key question for policy-makers is whether farmers who achieve reductions in watershed pollution while also capturing CO2 should be able to sell credits in both markets and, in effect, get dual payments for single action.
The study does not recommend a particular answer to this question, but offers policy-makers a series of scenarios – estimates of how the systems will work if farmers can participate in only one or both markets, and whether there should be thresholds before they can take part.
Another key question is whether sufficient carbon dioxide will be captured and traded to justify creation of the market. To determine this, CIER and the World Resources Institute developed a dynamic systems model and projected the likely volumes of carbon dioxide involved.
SPECIFIC FINDINGS
- A “nutrient trading market” would lead to the capture of between one and two million metric tons of carbon dioxide each year by 2030, depending on how the market is set up;
- In total, captured carbon would range from 12.5 to 21.6 million metric tons by 2030;
- Only a portion of captured carbon would be traded in markets, depending on the stringency of the market rules; most likely, between seven and 23 percent of captured carbon would be sold;
- Nutrient markets would generate more revenue for farmers than carbon dioxide markets. If rules limited participation to only one of these, carbon prices would have to be five to eight times higher than nutrient prices for farmers to forgo trading in nutrients and opt instead for carbon.
“As a practical matter, the carbon market will usually offer less financial reward than nutrient trading, because there isn’t that much CO2 captured in this way,” explains report co-author Rebecca Gasper, a CIER researcher. “To earn one water credit, a farmer must eliminate one pound of run-off pollutant. To earn one carbon credit, involves a reduction of one metric ton of CO2. It’s a lot easier for a power plant operator to achieve that than a farmer.”
DUAL BENEFITS
As an example of a best management practice providing the dual environmental benefit, the report points to conservation buffers – putting a green swath of trees or other plants between farm and stream to absorb run-off and filter out pollutants. But, this green buffer can also help capture carbon dioxide, and so help the state meet its CO2 reduction goals. Other practices likely to generate dual environmental benefits include conservation tillage, cover crops and wetland restoration.
DUAL MARKETS?
The nutrient trading market would work similarly to the one set-up to reduce carbon emissions under RGGI, the multi-state Regional Greenhouse Gas Initiative that Maryland has joined.
The fulcrum of the nutrient market is a target level called the Total Maximum Daily Load. It’s the maximum amount of phosphorous and nitrogen that Maryland farmers can allow to run into streams. The U.S. EPA is expected to finalize this target in December.
If a farmer uses more eco-friendly methods and produces lower levels of pollutants that fall below this target, these can be sold as credits to someone else who is running above the target level. The trade would take place in the nutrient market.
“Setting up this system will require a delicate hand,” says Ruth. “Farmers taking part will face a steep learning curve, and if the system’s too complicated or burdensome, they’ll likely not take advantage of it.”
“In carefully thinking through the options for how to operate and potentially combine nutrient and carbon markets, Maryland is moving out in front as a national leader,” Gasper says. “Linking multiple markets is appealing because of its potential for preserving and restoring ecosystems – particularly if other Bay states decided to participate or set up their own programs.”
FULL REPORT
A copy of the full report is available online:
http://www.cier.umd.edu/documents/Multiple_Ecosystem_Markets_MD.pdf
FUNDING
The Maryland Department of the Environment funded the study.
The Center for Integrative Environmental Research (CIER) at the University of Maryland has served as the state’s scientific advisor on a series of environmental-economic policy analyses. CIER addresses complex environmental challenges through research that explores the dynamic interactions among environmental, economic and social forces and stimulates active dialogue with stakeholders, researchers and decision makers.
The University of Maryland, the region’s largest public research university, provides Maryland with education and research services statewide, supporting its economic and social well-being.
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Farmers provide food, which is benefit enough to offset the nutrient pollution. Why don’t we start talking about the excess nutrient run-off that does nothing more productive than keep lawns ultra-green. This is a pet-peeve of mine from Fisheries Management days. People want to live by the lakes and have perfect landscaping, then they want to put poison in the water to kill the algae that is feeding off of their lawn fertilizer.
For a alternative view on this TMDL rule see: http://www.dtnprogressivefarmer.com/dtnag/common/link.do;jsessionid=225BE0DCEFA82DBB92FE688A36B1EB94.agfreejvm2?symbolicName=/free/agpolicy/news/template1&product=/ag/news/agpolicy/features&vendorReference=0702DA72&paneContentId=70120&paneParentId=70104
Another self-serving study by a publicly funded organization that is micro-focused on an agenda. I am sure it will shock these folks to learn that such a market already exists. It is called “the farm supplies store”. And the last thing farmers and the world needs is food rationing.
Our yacht club on a fresh water lake was annoyed by the annual algae bloom. We worked with farmers in the watershed and they did a better job of applying Nitrogen. Remember, nitrogen run off is wasted fertilizer that doesn’t help crop yields for them.
No need for the EPA. They would send out suits and spend millions on studies. Creating paperwork and reports solves no problems. People are open to new ideas that they understand benefit them.
subsidies are used where new ideas are not beneficial.
Anthony, with permission …
Isn’it the time of the year to decide who is the best “hurricane forecaster” ?
I’m wondering what the skill of Dr. James Hansimian turned out to be …
thanks beforehand … 🙂
Nothing new here. Gore, Mann, Pachauri, etc. have been selling that stuff for years.
`Fertilizer trading”?
Surely that`s a rude euphemism for the cancun conference.
How dare you 😉
“In these markets’ paragraph, is duplicated. Please correct it, and then remove this post.
This isn’t about rich folks (as Obummer would say) having nice laws, this is about keeping the Bay fisheries, especially the crabs, clams, and oysters, healthy and thriving. There are an awful lot of farms discharging into the Bay, practically all of eastern Maryland, a fair portion of VA, and eastern Pennsylvania is farmland. All that produces excess algae which starve the water of oxygen. The carbon capture aspect of this is just for show and will probably result in the process being too cumbersome and ultimately failing.
Another big problem, if my geography severs me, is that the Bay is very shallow and has a low rate of discharge into to ocean since it is an estuary so a lot of these excess nutrients tend to hang around for quite a while.
And how, specifically, do they intend to track these farmers every day of the year to make sure that they are using eco-friendly methods? How many investigators and agents of control have to be around? Do they check the ledgers and fuel consumption and fertilizer purchases? How brainlessly complicated or naive can this proposal be?
Activist groups are monitoring the application timing of ammonia-nitrogen based fertilizer in Illinois with the intent of regulating its use out of existance. Farmers are intensely aware of this. Small wonder then that they reject government proposals to further regulate and monitor their use of fertilizer inputs.
Tamara
December 2, 2010 at 7:35 am
Not that I begrudge someone a green lawn, but I feel pretty much the same way. At least in the Southwest, most nutrient loading is from lawn fertilization. Farmers pay a lot of money for the chemicals they use, and tend to apply carefully so that the product is actually used by the plants and not washed away. This makes sense, but one thing that surprised me, was the low levels of nitrate compounds I measured in Golf Course water features relative to urban lakes. Talking to a horticulturalist, I found out that what goes for farmers also goes for golf course managers. They actually monitor their runoff to insure that it is minimised.
BTW, I really wanted to be an ichthyologist or wildlife biologist, but could not stomach the Marxist indoctrination that seems to accompany the pursuit of any zoologically oriented degree.
This concept of “best management practices” is interesting. Who gets to decide what is best ? Is “best” an absolute never changing concept? Looks to me like more government interference with commerce. The invisible hand is getting a manicure by those that know “best”. I’m not so sure that the farmers of Maryland will like these new esoteric curves thrown at them to help them grow their crops. Do they get a vote?
As usual the Kulaks are to blame, and this isn’t just modern farming methods.
Lisa “Action” Jackson is going after Mennonite and Amish Farmers for their
organic ways too. Farmers and Ranchers are always at war with the Eastern alliance…
Hey I have an idea — Wouldn’t nuclear power be a far better solution, than trading fertilizer. If CO2 is your religion, then nuclear power should be your God. Doesn’t everybody know, windmills and solar panels don’t deliver? Cost far more the build and maintain that they deliver in electricity.
I know you can use BS as fertilizer … Normally you get it from cows, but people produced BS can also be used in a pinch.
I guess the one is sad that everybody knows the CO2 going to kill the earth scam, so as a knee jerk, we have to ban drilling in the oceans … Of course the rest of the world could care less what the US BS artists have to say, and plan on drilling everywhere oil can be found.
Regarding the comments about run-off. Pesticide, herbicide, and fertilizer should not be administered anywhere near a stream, exiting irrigation ditch or water body. And Maryland should simply pass a law to that effect.
Ignorance cubed ! A long time ago I owned a seat, and traded on the Chicago Mercantile Exchange & managed 25,000 acres of irrigated farm land and several feedlots. The above fails to have a regular adjustment from speculated value to actual, or true, value. On the CME the speculated price of 40 head of fat cattle (if memory serves) for a given month of a given year permitted the seller to actually deliver 40 head of fat cattle to the buyer of the contract in Chicago. The threat of delivery caused the speculated price to move to the actual cost of cattle when the contract expired at the end of the particular month. They have no way of setting a real value on their contract.
The photo of a stream and field demonstrates ignorance again. Good farm land in the corn belt will produce about 200 bushels of corn an acre – its very valuable – worth thousands of dollars an acre. Planting trees with their expanding water sucking roots robs the corn. A three day period exists during a corn plant’s life when access to the necessary water intake determines to a large extent how much grain it will produce. We have not mentioned taking that tree covered land out of production.
The CO2 trading market in Chicago is dead in the water. They lacked the necessary function to force speculated contracts to real, measurable deliveries at a specified site.
Please note I have made no mention of the well documented falsification of the AGW theory, which appears to be the impetus behind such drivel. For 1.6 million years we have had an ice age every 100,000 years, of which 90,000 is ice cold and 10,000 warm. Guess were we are now.
WilliMc
Ignorance cubed ! A long time ago I owned a seat, and traded on the Chicago Mercantile Exchange & managed 25,000 acres of irrigated farm land and several feedlots. The above fails to have a regular adjustment from speculated value to actual, or true, value. On the CME the speculated price of 40 head of fat cattle (if memory serves) for a given month of a given year permitted the seller to actually deliver 40 head of fat cattle to the buyer of the contract in Chicago. The threat of delivery caused the speculated price to move to the actual cost of cattle when the contract expired at the end of the particular month. They have no way of setting a real value on their contract.
The photo of a stream and field demonstrates ignorance again. Good farm land in the corn belt will produce about 200 bushels of corn an acre – its very valuable – worth thousands of dollars an acre. Planting trees with their expanding water sucking roots robs the corn. A three day period exists during a corn plant’s life when access to the necessary water intake determines to a large extent how much grain it will produce. We have not mentioned taking that tree covered land out of production.
The CO2 trading market in Chicago is dead in the water. They lacked the necessary function to force speculated contracts to real, measurable deliveries at a specified site.
Please note I have made no mention of the well documented falsification of the AGW theory, which appears to be the impetus behind such drivel. For 1.6 million years we have had an ice age every 100,000 years, of which 90,000 is ice cold and 10,000 warm. Guess were we are now.
Wow another farm subsidy program… and where does the money for these “incentives” come from? Most of the bush that was pulled to begin with was done so to increase the amount of cultivated land per quarter section. Putting it back in means lost $$$. That has to be topped off by someone because the farmers themselves certainly won’t just eat it and accept lower incomes. The only farmers I’ve ever spoken to pushing “uber green” were all for the highest levels of government intrusion (those involved in the organic lotto, both north and south of the border, cry for the absolute NEED of government enforced market share and even go so far as guaranteed income) as exists here in Canada.
The higher costs of food here in Canada, as much as 40% on daily use items like milk and eggs over the cost of same in America, all stem directly from the costs of government imposition and the subsequent lack of competition within our markets. Our economy is strong and joblessness no worse than it ever was here in Canada. Can America afford the same right now?
Beautiful pic of an irrigation ditch to incorrectly illustrate a point. This is reminiscent of one of my father’s admonishments when I was at the supper table as a young lad. He used to tell me, “Don’t play with your food!” Leave the farming to farmers. They’re pretty good at it here in the states.
Nearby, Kansas State University has an area in which various crops are farmed by the latest techniques. Ostensibly, it was placed here to show our dumb farmers a better way to farm. Its been here, I believe, since the 70s. It has never failed to be outproduced by neighboring farms.
I am a VA resident, and we are currently wrestling at the state level with new TMDLs under the EPA at the fed, and on the local level with our sustainability groups who also want to pass the decades old Chesapeake Bay Ordinance before the new “pollution diet” is approved, so we can be even better on top of things.
Our locality’s version suggest 100′ uniform buffers of all waterways including drainage swales, and “any connected wetlands”, which also have a creatively inclusive definition.
The state does not have the money to match the current BMPs, but the grant-go-round is being heavily flogged as a solution by the sustainables, on the grounds that is is a free (sustainable?–rotfl) revenue stream.
The locals who actually farm are horrified at what they will be mandated to maintain (native plants in all 100′ buffers, to be maintained against deer-browse too–look up VA’s whitetail population to see what that might cost!), and whether farmers or no, have requested a cost-benefit analysis in vain before the county proceeds.
The “need” to adopt this was “proved” via a green block grant funded study by county staff that showed insufficient numbers of may-and caddisfly larvae in the small percentage of streams tested…in the months that historically in our section of the Commonwealth shows the lowest populations of these extremely ephemeral creatures.
Nevermind that the Bay has been declining throughout the lifespan of the ordinance we are being pressured to adopt before there is any resolution on the new top-down TMDLs.
Nevermind that “nutrient trading” doesn’t actually solve any potential specific pollution problems by those who may buy them, but only creates another false bubble that isn’t a real market.
Our county is wealthy enough that some think we can make up the difference in the BMPs even if the “free” grant money from the state dries up (and if we adopt a program mandating that, well then we must, mustn’t we?), with a skewed median income provided by some hobby-farming billionaires, one of whom touts their enviro-pristine heirloom meats at $240 for a turkey, and beef at over $20 per lb–this individual pays taxes on one eighth of their assets, because they get a farm deferral on $7M of their land, and has been quoted in the press as saying they lose $1M per year on the “business”, and can do so forever.
I guess so, if they have more and more programs and deferrals that allow them to sink their losses into the greater good of someone else’s taxes and payments.
Those are who will benefit from much of this, not people who actually work land for their living.
Sorry to disagree with so many, but nutrient abatement via trading mechanisms is a viable and useful option. Unlike CAGW, there is absolutely rock-solid proof of nutrient-laden runoff from farms, households etc. which impact surface water quality by eutrophication.
I’m in the same corner as my associate, Ben Grumbles, who was former Assistant EPA Administrator for water. Here’s his testimony:
http://www.epa.gov/ow/speeches/060713bg.pdf
This wouldn’t be that hard of a problem to control with modern resources….farmers can apply fertilizers & pesticides with pinpoint accuracy using satellite tools for instance. However, the big Ethanol Rush has resulted in tremendous land pressure with subsequent nutrient runoff. Gulf of Mexico’s “dead zone” is a prime example (nothing to do with BP).
While I agree with most that this trading scheme is likely to fail, and may be just another eco-fascist ploy, ag run-off into the Bay is a very real problem, both in terms of ecology and economics. Fishing and tourism are big components of MD’s economy and both have taken a hit over the years due to pollution. Fisherman and crabbers are usually the ones complaining about the farmers, not the East Coast Intellecutal Establishement (TM). I know back in the 70s and 80s MD was ticked off at all the PA farmers dumping pesticides into the Susquehanna. The Chesapeake Bay Commission which included, I believe, MD, VA, PA, always stuck me as being more a “conservationist” organization then an “environmentalist” organization (from my rather shallow knowledge of the group).
Anyway, I have a soft spot for area formerly living in MD and vacationing on the Eastern Shore regularly. Really a beautiful place with a unique culture, even if it is damned nasty and sticky in the summer.
Im from Norway. AND, Im from a farm.
In Norway we have the exactly same problems with regulators. Lets first lookk at what the government, and researchers, say (and have been saying for decades):
1. Fertilizer run-off pollutes rivers and lakes
2. Non biologic ferilizer (non manure), that is: synthetic fertilizers, contribute to N{{sub|2}}O “climate pollution” when used (and a bit in production)
3. Biologic fertilizer (manure) contribute to “global warming” through CH{{sub|4}} release when used
4. Manure releases CH{{sub|4}} when stored, leading to runaway global warming
What have the Norwegian government done in respect to these issues? Lets look at it chronologically:
1: Very strict planting rules. There has to be established a “zone” between fields and rivers, streams, lakes. What was the situation prior? There WAS a zone between the fields and rivers etc. Why? If not their farmland would erode away. What has the result been? More beaurocrats, to control the enforcing og these rules. More funds on research to prove this has had an effect. The research is far below sub-standard. They do not take into consideration the weather pattern the last year, mining runoff (mining has all but stopped most places) and all other sources that had an impact on the “reference” results. Often the research is based on assumptions, because there were mead no tests of the water prior to the enforcing of these laws!!! They actually say that, “this river would have had so and so much nitrogen 20 years ago, but today we only measure this much. Look at the improvement!”… SHOCKING!!!
2: High tolls on the use of synthetic fertilizer. Result? Higher cost for the lowest payed workers in Norway. But, from the environmentalists point of view, it is a positive thing. Now its probably more economic to use no fertilizer at all, and get 1/4 – 1/5 of the crop.
3. There has been talks of banning above-ground spreading of manure. Until this is made a law, large subsidies are given to equipment which deposits the manure under ground. This is subsidies which the other farmers, the farmers as a hole, pays for. Just to give you hint of the price for these wagons: 5o.ooo dollars and up.. AND UP?!?!!.. What will be the result of this law, and the work that has been done until now? I: Beaurocracy II: Equipment makers get a large boost.. But what is the result? Lets get back to “research.” Even the shoddy research that takes place in Norway discovered that, by spraying the manure underground, CH{{sub|4}} release could even get bigger!! (some chemical reactions without oxygen something).
4. Every cow farts. Now the government is considering fining every milkfarmer with a fine of 1ooo NOK, which is 17o dollars, for every milk cow. I.e. 30 cows -> 5.ooo dollars, every year!!!! How many beaurocrats would handling those funds take???? They also want to distribute these funds to make biogas-plans, based on manure. I dont know about USA, but in Norway this would amount to colossal subsidies. For every MWh{{sub|e}} it would cost around 7oo dollars. Is that expensive in USA? And that is subsidies.
Just found this VERY interesting article tying Enron to the push for Kyoto and carbon trading!
http://www.forbes.com/2010/11/29/epa-enron-greenhouse-gases-opinions-contributors-larry-bell.html
Not sure about the “behind the scenes” stuff, but it sounds very plausible. We are going to have one heck of a fight in Congress soon (House of Representatives vs. White House & EPA) over the PSD and Tailoring Rule.