Carbon Economics with Dr. David Archer

Soil Sense

In this episode we dive into the economics of carbon credits. Specifically, how should farmers approach the emerging markets that are popping up for carbon offsets and credits. We are joined by Dave Archer, an agricultural economist at the Northern Great Plains Research Laboratory. His specific research interests include risk management, simulation modeling, decision aid development, bioenergy economics, and decision making to achieve both economic and natural resource goals.

Dave is going to answer some of the most asked questions about these carbon markets, such as:

• What questions should a farmer be asking before they get involved with one?
• Why are they not willing to compensate for the previous decades of soil health building practices?
• How should this influence farm management decisions?

Dave highlights three important components in this discussion: additionality, permanence, and pricing.

“The value of these credits goes up and down and will continue to go up and down. So it's important to understand how those price changes are handled in any contract, whether you can get the benefits of any price increases or whether you have losses with price decreases.” - Dave Archer, Ph.D.

While these carbon programs can be great incentives to try soil health building practices, Dave says it’s important to keep them in perspective and consider first and foremost how incorporating new practices will impact the bottom line. As an added benefit, practices that build soil health and sequester carbon can also be more profitable over time.

“I think the most important thing is just understanding the system impacts. If you're thinking about adopting practices that may build carbon, there are potential economic benefits associated with that. Carbon credits and carbon markets may be a way to get additional incentives and help you make that change.” - Dave Archer, Ph.D.

Watch the Capturing Carbon Workshop Here!

This Week on Soil Sense:

• Meet Dave Archer, an agricultural economist at the Northern Great Plains Research Laboratory
• Explore the economic impacts of the carbon credits market for producers
• Discover the questions producers need to ask and the answers they need to understand before pursuing a contract based on carbon credits

Connect with Soil Sense

• Soil Sense Initiative

Soil Sense Podcast is hosted by Tim Hammerich of the Future of Agriculture Podcast.