A bill backed by farmers and environmentalists establishing the state’s first carbon market has passed its first hurdle toward becoming a law.
Senate Bill 373, authored by three Republicans, establishes carbon market registration program that facilitates carbon market trading in the state and allows the President Benjamin Harrison Conservation Trust Fund to take part.
Carbon markets work by allowing companies to offset the amount of greenhouse gases they emit by purchasing carbon credits worth a certain amount of carbon dioxide emissions.
Farmers, ranchers and foresters can generate carbon credits to trade by using environmentally sustainable farming practices that will retain a verified amount of greenhouse gases.
“Basically, what Indiana would be doing is serving as a clearinghouse and over time, it would be sustainable,” said Sen. Susan Glick, one of the bill’s authors and chair of the Senate Natural Resources Committee during the bill’s introduction. “These people are already involved in this across the country, but what we want to do by establishing this in Indiana is to provide, if you will, a program through our Indiana [State] Department of Agriculture and the Department of Natural Resources, where we can verify these credits and allow Hoosier property owners to take advantage of these national programs and this ability to sustain our environment.”
If the bill becomes law, the state’s lieutenant governor would oversee the program that facilitates the carbon sequestration efforts and carbon market.
The bill establishes a “Climate-Friendly Farming and Forestry Registration Program” that registers technical advisers and verifiers and establishes an advisory council.
The verifiers would ensure that landowners wanting to sell carbon credits used greenhouse gas sequestration techniques like anaerobic digesters, planting trees or other vegetation to increase biomass carbon stocks, cover crop use and soil management.
“These farming practices are being established throughout the state of Indiana,” Glick said. “They’re being adopted by many farmers at this time. The more they farm, the more they realize that the loss of their environment has serious impacts on their ability to farm and their long-term ability to sustain this planet. These people are taking an active interest in the establishment of these practices and they are urging us to go forward with this.”
The program would help farmers learn about carbon markets and how to use them. It would also include a verification process that would help Indiana farmers, foresters, ranchers and other landowners get an official count of how much carbon can be stored in a person’s land.
That information can be used to build confidence in current or future carbon markets and verify that carbon credits are actually offsetting carbon pollution produced elsewhere, and thus worth the money being spent to purchase them.
The bill also allows some state funds to purchase land to participate in carbon markets.
“The Hoosier Environmental Council supports Senate Bill 373,” said Hoosier Environmental Council senior policy director Tim Maloney. “Both for the new revenue sources for these very important and chronically underfunded state programs, the President Harrison Trust and Clean Water Indiana, we also support its benefit to farmers and private woodland owners who can receive additional incentives for their practices that sequester carbon on their property.”
The bill also has the support of trade organizations, soil and water conservation districts, the Indiana Forest Alliance, Nature Conservancy of Indiana and the Indiana Catholic Conference.
The Indiana Farm Bureau said it approved of carbon markets, but was wary of the limitations of a state carbon market.
“Farmers should realize some of the monetary value generated by those carbon markets, but the markets are fledgling and still forming and finding equilibrium. And farmers have questions about how practices are priced, what companies they can trust and where they can learn about how these markets work,” said Jeff Cummins, associate director of policy engagement for the Indiana Farm Bureau. “All these things require USDA, private companies, nonprofits to facilitate the development of these markets and help farmers navigate them effectively.”
SB 373 seeks to do in Indiana what a federal bill introduced in June 2020 by U.S. Sen. Mike Braun, of Indiana, sought to do at the national level.
The “Growing Climate Solutions Act of 2020” would establish a website to guide farmers through the carbon market process, establish a system to certify technical assistance providers and empower the U.S. Department of Agriculture to certify third-party verifiers who can confirm that the projects involved in carbon trading resulted in emissions reductions.
The bill had bipartisan support in the both houses of the previous Congress, but it’s unclear whether the current Congress would support the bill or introduce a separate carbon market bill.
The Biden Climate Plan calls for climate friendly farming practices and carbon capture technologies, but does not lay out a plan for a carbon market.
During his transition, Biden’s advisors suggested a plan to establish a carbon bank using the USDA’s Commodity Credit Corporation by the 100th day of his presidency that would purchase $1 billion in carbon credits a year at $20 a ton. The move is projected by the Biden campaign to reduce greenhouse gases by 50 megatons a year.
SB 373 was brought to the Senate Natural Resources Committee with the help of former Sen. Mark Stoops, who sponsored an earlier version of the bill, and groups like Carbon Neutral Indiana.
The bill is now headed to the full Senate for consideration.