Carbon offset credits are so named because companies voluntarily pay another business to buy them.
Corporations are tying bonuses to employees’ development of environmentally friendly practices, including reducing carbon emission.
Carbon offsets, like most agricultural supply chains, have a “middleman,” which means that there can be a major price difference between what buyers are being paid and what farmers receive, Ripplinger said.
Farmers also have the option to document and enter into carbon offset contracts directly with buyers, using a variety of registries, Ripplinger noted.
The carbon offsets use a project or activity in another part of the economy, such as agriculture, to reduce the emissions.
Though awareness of carbon offsets has increased recently, there were markets for them about 15 years ago, Ripplinger said.
“It’s got more momentum and it’s widespread,” he said.
About a dozen companies, both existing and start-ups, are contracting with farmers for carbon offset credits.
Less than 15% of land in the heart of the upper Mississippi River watershed, which is the heart of the Corn Belt, is farmed using no-till, according to a Feb.
One of the reasons farmers are hesitating to sign the carbon offset contracts is that most of them are for at least five years Ripplinger said.