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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As one or two people have posted, grain farmers don’t like wasting money on nitrate fertilizers and are probably not the culprit in waterway pollution. In very long term experiments conducted in the UK (as in more than 10 years of data) it was identified that nitrate run-off occurred after breakdown of organic nitrogen by bacteria and subsequent leaching during high rainfall (and here’s the kicker) only when the crop plants were not actively growing. On the basis of this research, the EU has instituted a “green fields” policy where ground is not left fallow during winter months as this was the time of greatest leaching.
Furthermore, those people talking about algal blooms should check which nutrient is actually limiting in freshwater before pointing the finger at nitrates – it is nearly always phosphate which is limiting and the biggest source for phosphate run-off is animal manure. Managing the disposal of manure from large scale animal production lots is much more effective for controlling freshwater algal blooms.
There is no doubt that modern farming practices have impacts on the environment – agriculture by definition involves specific cultivation of only a certain number of species and the removal of many others. However, farmers are also at the sharp end of every change in the environment and so are already well-aware of their impact and the need to manage the environment they are in for long term productivity.
Global food prices are already rocketing. This is not going to help. 🙁
“THANKS FOR THE INTANGIBLES” AWARD
This effort to saddle farmers with regulations deserves a very special award for generating the most excercises in futility, non-productive activity, and redundancy you can possibly get from a state effort.
Here are the top twelve phrases indicating an expensive, wasteful government class dedicated to efforts aimed at productive farmers, causing them to produce less at greater cost, with more effort, for no reason.
1. reams of researchers reaching conclusions and making recommendations
2. setting up a “trading market”
3. farmers earn financial incentives
4. investing in eco-friendly techniques (products chosen & favored by gov’t, not by genuine value)
5. “a double environmental benefit”
6. reducing fertilizer run-off, a redundancy for existing laws and practices
7. capturing carbon dioxide headed for the atmosphere
8. CIER and the World Resources Institute developed a dynamic systems model
9. models projected the likely volumes of carbon dioxide involved
10. planting trees in agricultural fields
11. creating wetlands, habitats for vector populations of mosquitos
12. states meeting carbon requirements for the Federal Government
You’re welcome for the award. Zeke
I wouldn’t argue that ag-runoff is not a problem, or a contributing factor. But, if you look at land-use changes around the Bay, ag-runoff is not an increasing factor.
See: http://www.chesapeakebay.net/landuse.aspx?menuitem=14671
“Farmland/open space decreased by 8,700 acres per year between 1984 and 1992, 2,110 acres per year between 1992 and 2001, and 941 acres per year between 2001 and 2006.
The total amount of urban area in the Bay watershed increased by 14 percent, or 355,146 acres, between 1984 and 2006. The annual rate of increase between 1984 and 1992 was twice the annual rate of increase between 1992 and 2006.
Tree canopy decreased from 62.6 percent of the watershed in 1984 to 61.5 percent in 2006, a loss of 439,080 acres. The highest rate of decline took place between 2001 and 2006, when the watershed lost 37,403 acres of tree canopy per year. ”
I suspect that farmers just represent an easier target.
“Generally, urban/suburban development delivers the greatest amount of
nitrogen and phosphorus pollution to local waterways and the Bay per acre: 30 lb/acre/year of nitrogen, compared with 17 lb/acre/year for agriculture, according to the Chesapeake Bay Program. Well-managed agricultural land is still the next best thing to forests in restoring the “Great Green Filter” of old-growth woodland and natural grasslands that covered the Chesapeake watershed for the first
ten thousand years of the Bay’s existence.”
pat says:
December 2, 2010 at 8:27 am
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.
Pat,
if there is a thousand acres of farm land, usually there is a stream running through it. In New Jersey or Maryland, make that 100 acres. So, that law you are suggesting will make all high yield farming impossible. How does 25$/lb for tomatoes sound to you
NASATV is speaking about the Arsenic/Phosphorus connection in todays presentation on arsenic based life found in Mono lake , and the growing scarcity of phosphorus for fertilizer use. Some discussion of phosphorus as a pollutant in water – the runoff issue.
Link to NASA on Arsenic based life – http://www.nasa.gov/topics/universe/features/astrobiology_toxic_chemical.html
Market? Or compulsory complex tax arrangement?
The missing word is “Free” – A Free Market is where there is no compulsion – and everyone can participate or not as they wish – on such was the West built.
Using “Market” for compulsory, complex taxation systems is a complete misnomer. Of course, some will profit from these “Market” Tax systems – The Romans used a similar “Market” arrangement to manage commerce. They sold “Franchises” to Tax in an “open” market & the Franchisees could then add their own management fees on top.
We have examples in the Bible, Zaccheus and (later Saint) Matthew were agents in the “market” systems of the day – very profitable for them – though the people despised those collaborators with the totalitarian Romans.
There was a separate moral category for these lowest of the low -not sinners, but tax gatherers.
Tamara at 9:51, from watching how numbers are calculated in my own county, often interesting means are used, as well as assumptions.
For instance, we have large-lot zoning to preserve agricultural uses (which are then so strictly regulated that it is too costly for most to participate, except as a hobby of the wealthy). Under this zoning during the time period you reference, one hundred “pristine” acres could have been developed in one tier into two 50 acre lots, or in another to five 20-acre lots.
Two, or five homes on 100 acres. However, the entire hundred was now counted as fully “developed”.
In addition, back when actual subsistence farming occurred on the bulk of land in the county, there was LESS tree canopy than exists today, post-development of one third of the county: no one cropping was going to waste productive land, and no one with stock in pasture was going to do the same.
There is no longer any dairying here, and former pasture is now 20-years overgrown in cedar and minimal hardwood, while cropland has also turned into lowgrade forested land on many estate lots.
We have planners here who refer to all suburban development as the “urbanizing” of the land, but we have very little developed at the density triggers to be classified as truly urban; we don’t even have the density yet for metro buses, although most in the county work in DC or the close-in suburbs.
Find out what constitues those figures; Montgomery in MD has some of its own little secrets re conserving. By creating their rural reserve twenty years ago to supposedly maintain agriculture, they have almost no farming left, and their stock auction closed about ten years ago. Land that is counted as agricultural is primarily now recreational equine.
The second image above shows what appears to be an older model Case tractor and the farming being done is by conventional tillage methods (ie turn the soil over and break it up, leaving bare soil). I would guess this is an old pic. Leading farmers are using no tillage farming with controlled traffic via satellite guided precision technology. This cuts down on high input costs (eg fertilisers) with zero overlap, allows for much better moisture retention, and for organic build up, and results in much less runoff – of everything. Most farmers here in Australia are moving in this direction, starting at least with minimising tillage and using satellite guided steering to cut the overlap and resulting over-use of inouts like seed, fertiliser and diesel. This is mostly driven by farmers wanting to be more efficient in turning minimum input into maximum output in a sustainable way – they do not have to be told.
The most pressing problem for the Chesapeake at the present time is the loss of its key- stone specie– the oyster. The oyster decline is the result of harvest methods and more recently disease. Oysters once filtered the entire Chesapeake water body every 3 days. The loss of this filter cannot be offset by simply controlling nutrients. If one wishes to see the power of filtration look at the impact of the invasive zebra mussel on Great lake water quality.
Initial steps should include removing perverse farm subsidies and the creation of buffer strips. If we were really serious we would require irradiation of the food supply which would protect nearly half of our crop lost in storage and transportation- reducing as a result the amount of land and fertilizer required to feed us. (It would also eliminate the need for the new farm bill S510)
The above may actually require of us to spend less money not more and as such will never be as politically attractive to bureaucrats and rent seekers. Unfortunately environment initiatives have had nothing to do with actual improvement for quite some time.
my father-in-law breeds mules in SoCal, near Bakersfield. One of his biggest concerns is manure, how to manage it, get rid of it, prevent it from getting into the ground water, prevent flies from eating his animals, etc. He has two employees who do nothing more all day than deal with manure. They compost it in a far corner of his property away from his barns and his neighbors. I don’t know what he does with it after that, but he spends thousands a year on mitigations, like these little nematodes that are supposed to eat the stuff. He gets those from the government I believe.
Now, my uncle was a worm farmer. He always said, “The miller’s daughter turned straw into gold, my worms turn bull puckey into cash.”
My son and I have just come from Chico library where we picked up a new science book – “How to Reduce Your Carbon Footprint” by Joanna Yarrow. Of course, the first page I opened up to says, “Buy Shade Grown Coffee.” Oh yeah, sustainability for rich people! I’ll try to keep an open mind though, I’ll let you know how it goes.
Hope all is well with you and yours!
“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.
==========
What if everybody doesn’t win, another taxpayer bailout??
How can it be called a “market”, if everybody wins.
Where do all these winnings come from.
There’s a whole lot of Chicken s*** on the DelMarVa Peninsula. Perdue has a huge farm there.
———–
of his biggest concerns is manure
I would like to announce to all to of you WUWT readers that I have now perfected the sphincter-cizer ® !
It strengthens the muscle that allows you to ‘hold-in’ that human methane emission.
Builds your body, burns calories, reduces your carbon footprint & assuages guilt simultaneously.
I am currently awaiting a response from Generation Investment Management LLC to obtain funding for the infomercials. How can they refuse since it is green in color and is sure to save the planet. Should do well on Planet Green & CurrentTV channels! Probably NatGeo too!
ps. I hope you guys & gals don’t kill that carbon-credit thing. I was planning on including a FREE lifetime supply of carbon-credits (at 5 cents/ton I can afford to do it) if you place your order in the next 30 minutes! If you kill the carbon credits, I’ll probably have to give a second one free (shipping & handling of course) so you can sphincter-cize ® at the same time as your significant other.
When I read the title of the post, I initially thought of natural, organically produced fertilizer.
After reading this, I still think it’s BS
There should be absolutely no confidence in their ability to accurately assess the water and runoff from farms from which much of the “runoff” is through the groundwater and from the groundwater laterally into the streams and rivers, often very far from the farm. There is also a sizable time lag between the chemicals entering the ground and arriving at the river. This would be as hard or harder than estimating Co2 release and almost as hard as the idiotic idea that we can measure species diversity with at any useful level. Do we need a whole new bureaucracy of minions running around doing millions of water quality and percolation tests? Or are they going to have a fancy meaningless computer model which will tell them who gets the big bucks, er, credits.
They’re worried about runoff into the Chesapeake Bay? I’m in central Pennsylvania, alongside the Susquehanna River, which is a major source of water into the bay.
We have many farms around here, and I have often seen the distinctive tractor-pulled tankers from which water-mixed manure is sprayed on the fields for fertilizer. The aroma is… interesting, sometimes overpowering if you’re not used to it. But if you’re going to complain about farm smells, don’t live near farms.
What else are they going to do with the manure? Make fireplace logs? (Well, there is a nice Green market for organic carbon-neutral fuel…)
I wonder if that new “Food Safety” bill will want to severely penalize the spraying of E. Coli-bearing material onto crops.
And the solution to “fix” someone else’s problem with agriculture is, once again, more government bureaucracy?
I would prefer that agricultural policy not be set by by politicians and bureaucrats who consider it a proper government expenditure to take as a fact-finding trip a guided tour of a vineyard.
I’ve had to work on more than a few of those “turd” wagons pictured above, throughout my mechanical career. The decks wear out, and the chains tend to hang up. No fun in turd town for sure! Steam cleaning them is definitely not for the feint of heart. When I first started out working on Ag stuff, I was given a well seasoned pair of those things to repair. For a couple of days my wife forced me to sleep outside thanks to the effects of getting too close to those things. On a side note; I was surprised to find a whole bunch of little tube shaped magnets clinging to the metal work, and when I asked about them was told that they are “cow” magnets. I laughed and made a joke about buddy needing to use a chic magnet instead, but he was dead serious, and insisted that is what they are. It is true. They drop these smooth little magnets into the feed grain to get the bits of wire and other sundry metal the cows inevitably eat to pass through! I have several on the side of my tool boxes. Well polished of course.
But back to the wagons again. Spring and summer out here in the dairy belt heralds the splendid sight of these wagons -mostly on the smaller farms- going about their “business” spreading joy across the land. The bouquet takes some getting used too, and when one sees the rooster tail of a working manure spreader, one learns pretty quick to roll up the car windows and close the air vents for a few miles! There are some much much larger “spreaders” that I have also had the pleasure of servicing that are simply giant water tanks that have been fitted with a pump that spray the liquefied “honey” in a massive plume when dragged behind a tractor. There are companies that do nothing but “spread the joy” using these machines, but the lowly wagon still manages to find its place in the sun. Some machines just don’t get the same sort of respect that others doo (doo) One of these days I’ll tell you all about a time I had to go in up to my neck in liquid gold to get a tractor running again when it stalled in the “pit” they ferment the stuff in. I still have nightmares from that job…
So if you ever need an expert at spreading the dung Anthony, I’m your guy!
Charles Higley at 3:21–here we already have legions of volunteers (many drafted from school ecoprograms) trained by nonprofits to gather data, which is then selectively computer analyzed with “free” grant money from the fed.
And when we pass our new Bay ordinances, it will create dozens of (government) jobs!
How we’ll pay for them with the loss in the tax base I’m not sure, but maybe we’ll just keep getting “free” government grants to tide us over until the green economy really takes off.
(heavy bleeding sarcasm alert)
“. . . but could not stomach the Marxist indoctrination that seems to accompany the pursuit of any zoologically oriented degree.”
Interesting. Macro-biologists are prone to self-righteousness, often arrogantly so (the so-called P’Ehrlich Syndrome; a physicist friend claims that it’s overcompensation for being innumerate quasi-scientists – “stamp collectors,” as Ernest Rutherford put it), but I hadn’t heard this.
Could you elaborate a little, or give some examples from your Tums zoology attempts?
Pat’s first post: Spot on.
Thinking this new fertilizer market would better be served being traded in another venue:
http://www.chinahush.com/2010/12/02/sculpture-made-of-giant-panda-poop-sells-for-300000-yuan-and-100000-for-an-essay/
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.
————–
Farmers would like to think they are the rugged individualists, but taking into account things like farm subsidies, guvmint funded research, drought relief and so on the ideal falls a little short of the truth.
Even in the carbon capture area farmers would like to earn money from soil carbon.
I figure that there might be a few farmers who would be prepared to go the extra mile on fertilizer management since it looks like a double win to me.
Do these people get paid for all this rubbish?
These people get climate and weather mixed up. Humans can alter local weather, to a small extent, by the crops growing in the fields. The fields need to be big so American farmers probably make a greater difference than those in the UK. But to alter climate you need global influences which humble man does not have.