[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                       VOLUNTARY CARBON MARKETS IN 
                       AGRICULTURE AND FORESTRY

=======================================================================

                                HEARING

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 23, 2021

                               __________

                           Serial No. 117-16
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                         
                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
48-427 PDF                 WASHINGTON : 2022                     
          
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                        COMMITTEE ON AGRICULTURE

                     DAVID SCOTT, Georgia, Chairman

JIM COSTA, California                GLENN THOMPSON, Pennsylvania, 
JAMES P. McGOVERN, Massachusetts     Ranking Minority Member
FILEMON VELA, Texas                  AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice  ERIC A. ``RICK'' CRAWFORD, 
Chair                                Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia   SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut            VICKY HARTZLER, Missouri
ANTONIO DELGADO, New York            DOUG LaMALFA, California
BOBBY L. RUSH, Illinois              RODNEY DAVIS, Illinois
CHELLIE PINGREE, Maine               RICK W. ALLEN, Georgia
GREGORIO KILILI CAMACHO SABLAN,      DAVID ROUZER, North Carolina
Northern Mariana Islands             TRENT KELLY, Mississippi
ANN M. KUSTER, New Hampshire         DON BACON, Nebraska
CHERI BUSTOS, Illinois               DUSTY JOHNSON, South Dakota
SEAN PATRICK MALONEY, New York       JAMES R. BAIRD, Indiana
STACEY E. PLASKETT, Virgin Islands   JIM HAGEDORN, Minnesota
TOM O'HALLERAN, Arizona              CHRIS JACOBS, New York
SALUD O. CARBAJAL, California        TROY BALDERSON, Ohio
RO KHANNA, California                MICHAEL CLOUD, Texas
AL LAWSON, Jr., Florida              TRACEY MANN, Kansas
J. LUIS CORREA, California           RANDY FEENSTRA, Iowa
ANGIE CRAIG, Minnesota               MARY E. MILLER, Illinois
JOSH HARDER, California              BARRY MOORE, Alabama
CYNTHIA AXNE, Iowa                   KAT CAMMACK, Florida
KIM SCHRIER, Washington              MICHELLE FISCHBACH, Minnesota
JIMMY PANETTA, California            JULIA LETLOW, Louisiana
ANN KIRKPATRICK, Arizona
SANFORD D. BISHOP, Jr., Georgia

                                 ______

                      Anne Simmons, Staff Director

                 Parish Braden, Minority Staff Director

                                  (ii)
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Bustos, Hon. Cheri, a Representative in Congress from Illinois, 
  submitted news release.........................................   125
Schrier, Hon. Kim, a Representative in Congress from Washington, 
  prepared statement.............................................     6
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................     1
    Prepared statement...........................................     3
    Submitted comment letter; authored by Greg Morris, Senior 
      Vice President and President, Ag Services and Oilseeds, 
      Archer Daniels Midland.....................................    85
    Submitted letters on behalf of:
        Gallo, Sarah, Vice President, Agriculture and 
          Environment, Biotechnology Innovation Organization.....    90
        Hovsepian, Ronald W., President, Chief Executive Officer 
          & Board Member, Indigo Agriculture, Inc................    92
        Parisa, Zack, Co-Founder and Chief Executive Officer, 
          Natural Capital Exchange...............................    96
    Submitted statements on behalf of:
        Dyson, Caryn Senior Policy Advisor, Akin Gump Strauss 
          Hauer & Feld LLP.......................................    98
        Glenn, Ph.D., Barbara P., Chief Executive Officer, 
          National Association of State Departments of 
          Agriculture............................................   106
        Hite, Rita, Executive Vice President, External Relations 
          and Policy, American Forest Foundation.................   107
        Smith, Brent, Vice President, Marketing, Sustainability & 
          Proprietary Products, Nutrien..........................   110
        Farmer's Business Network, Inc. and Gradable.............   113
Spanberger, Hon. Abigail Davis, a Representative in Congress from 
  Virginia, submitted material...................................   127
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     3

                               Witnesses

Reed, Debbie, Executive Director and Member, Board of Directors, 
  Ecosystem Services Market Consortium and Ecosystems Market 
  Research Consortium, Washington, D.C...........................     8
    Prepared statement...........................................    10
    Supplementary material.......................................   128
    Submitted question...........................................   142
Bastos, Leonardo, Senior Vice President--Head of Global 
  Commercial Ecosystems, Bayer Crop Science, St. Louis, MO.......    16
    Prepared statement...........................................    17
    Submitted questions..........................................   142
Luoma, Brian, President and Chief Executive Officer, The 
  Westervelt Company, Tuscaloosa, AL; on behalf of National 
  Alliance of Forest Owners......................................    19
    Prepared statement...........................................    20
    Supplementary material.......................................   128
    Submitted questions..........................................   143
Antonioli, David, Chief Executive Officer, Verra, Washington, 
  D.C............................................................    25
    Prepared statement...........................................    26
    Supplementary material.......................................   131
    Submitted questions..........................................   145
Eideberg, J.D., Callie, Director, Government Relations, 
  Environmental Defense Fund, Washington, D.C....................    31
    Prepared statement...........................................    32
    Submitted questions..........................................   146
Milligan, David, President, National Association of Wheat 
  Growers, Washington, D.C.......................................    35
    Prepared statement...........................................    37
    Submitted question...........................................   147
Merrill, Jeanne, Policy Director, California Climate and 
  Agriculture Network, Alameda, CA...............................    41
    Prepared statement...........................................    42
    Submitted question...........................................   148

                           Submitted Material

Earthjustice, submitted letter...................................   135

 
          VOLUNTARY CARBON MARKETS IN AGRICULTURE AND FORESTRY

                              ----------                              


                      THURSDAY, SEPTEMBER 23, 2021

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:01 a.m., via 
Zoom, Hon. David Scott of Georgia [Chairman of the Committee] 
presiding.
    Members present: Representatives David Scott of Georgia, 
Adams, Spanberger, Hayes, Delgado, Pingree, Sablan, Kuster, 
Bustos, Plaskett, O'Halleran, Carbajal, Khanna, Lawson, Craig, 
Harder, Axne, Schrier, Panetta, Bishop, Thompson, Austin Scott 
of Georgia, Crawford, DesJarlais, Hartzler, LaMalfa, Allen, 
Rouzer, Bacon, Johnson, Baird, Jacobs, Balderson, Cloud, Mann, 
Feenstra, Miller, Moore, Cammack, Fischbach, and Letlow.
    Staff present: Lyron Blum-Evitts, Jacqueline Emanuel, Josh 
Lobert, Kelcy Schaunaman, Anne Simmons, Ashley Smith, Josh 
Maxwell, Patricia Straughn, Erin Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. The Committee will now come to order.
    First, I want to welcome and I want to thank all of you for 
joining us today. We have a very distinguished, knowledgeable 
group of witnesses that are coming to help us deal with climate 
change and the important role that we in agriculture must 
fulfill.
    Let me say at the outset that my concern in putting this 
hearing together rests with this. It is most important that 
agriculture, our industry, be at the point of the spear in 
dealing with climate change. Why? Nobody, no entity on Earth, 
is more dependent on the climate than agriculture. Our food 
production, the water we drink, our shelter from our forestry, 
textiles, our clothing. We can do without a lot of things, but 
we cannot do without food, water, our clothing, our shelter 
coming from our forestry.
    And so, this Committee hearing is most important, and I 
want to thank our distinguished panelists for being with us.
    And so, first of all, I want to get a few housekeeping 
matters out of the way.
    First of all, after giving brief opening remarks, Members 
will definitely receive testimony from our outstanding 
witnesses today, and then the hearing will be open for 
questions. Members will be recognized in order of seniority, 
alternating between Majority and Minority Members, and in order 
of arrival for those Members who have joined us after the 
hearing was called to order. When you are recognized you will 
be asked to unmute your microphone, and you will have 5 minutes 
to ask your questions or make your comment.
    And now, I really want to emphasize, Members, please, 
please keep your phones muted if you are not speaking. As you 
can hear right now, there is a Member that is not doing that, 
and we have to be respectful, and I am laying down the law. I 
will just announce you are not participating. These are some 
outstanding and gifted witnesses, and I want this Committee to 
show them the respect that they deserve. And it is important 
that we hear every word of what our Committee Members are 
saying. We have to respect one another. So, when you are not 
speaking, turn that microphone off. Thank you for doing that.
    Now, Members will be recognized in order of seniority, 
alternating between Majority and Minority Members, and in order 
of arrival for those Members who are joining us late. And as I 
said, when you are asked to mute your microphone, please do so, 
so that if not speaking you will remain muted in order to keep 
the background noise out.
    And in order to get as many questions as possible, the 
timer will stay consistently visible on your screen. I am going 
to be very punctual with good discipline here to keep Members 
to your 5 minutes.
    The other thing I want to say is this. This is about 
climate change, the most pressing issue that is facing us 
today, and nobody is more impacted than us, agriculture. So, 
for those Members who have in mind to bring up any other 
subject other than what we are here to do, will not be 
recognized. All right? We are here to deal with climate change, 
nothing else. I want to make that clear.
    All right. Now, just a few brief remarks from me on this. 
As I said at the outset, this is our most important hearing, 
folks. We are the leaders in Congress that must deal with 
climate change, and the way that we are functioning on that is 
through what is referred to as carbon credits, carbon markets. 
That is the process and the tool that we have, and we have a 
variety of firms who are engaged in carbon markets, carbon 
credits, and each of these are working and developing working 
partnerships with our farmers to determine the way to do it. 
There is a variation in some of our companies how they are 
engaging our farmers and agriculture interests. Bayer, for 
example, is working with our farmers, but they are compensating 
their partnership based upon the farmers doing natural things 
like cover crops, no-till farming, and then there are others 
who are doing it by the amount of carbon that our farmers 
sequester. But we have problems in verification, weaknesses in 
the technology that is used here, the impact of our farmers not 
having access readily to the internet. These present awesome 
problems, so we have to really deal with those issues.
    Second, in bringing and engaging our farmers in helping us 
with climate change and what we are doing, to what degree does 
that take them from doing what we need so badly to do, and that 
is maintaining our excellent food supply. We have some serious 
questions that we have to deal with.
    I am very excited about this hearing. I want to thank you 
all for it, and now, let us go forward and have a tremendous 
hearing. The eyes and ears of the nation are on this hearing 
this day. Let us make them very proud that this House 
Agriculture Committee is securing our role being at the top of 
the point of the spear when it comes to dealing with our 
Federal policy, Congressional policy. It has to, first of all, 
come through agriculture. This is the goal here, and let us 
proceed.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Ecosystem service markets, including carbon markets, provide an 
interesting value proposition to producers, business interests, and the 
public at large. These markets have the potential to create new 
economic opportunities while also tackling the greatest challenge of 
our time--climate change. At my very first hearing as Chairman, I 
pledged to explore every opportunity to mitigate climate change and the 
significant risks to agricultural production--and that's what we're 
going to do here today. By rewarding farmers, ranchers, and foresters 
for implementing practices that sequester carbon, markets can create an 
opportunity for producers to capture a new income stream.
    According to the latest data available, 2019 marked a record year 
for transactions across the global, voluntary carbon marketplace. More 
than 100 metric tons of carbon offsets were sold in 2019 at a total 
value of over $300 million. Renewable energy projects accounted for 42% 
of these transactions, with forestry and land use projects responsible 
for another 37% of transactions.
    In addition to their economic potential, voluntary carbon markets 
could help to capture the significant mitigation potential available 
within the agriculture and forestry sectors. To capitalize on these 
opportunities, carbon markets must rest upon a transparent and reliable 
accounting and verification framework to ensure they are delivering 
true economic and climate benefits. However, given the significant 
variation that exists in today's markets, serious questions remain over 
the quality of some of the carbon credits that are currently generated. 
Likewise, many questions remain about producer participation in 
markets--including how to fairly compensate producers, the ability of 
small farms to participate, and how to reward existing stewardship, 
among others.
    These concerns merit attention from policymakers and consideration 
of whether Federal policymaking can help to fill the gaps and provide 
the certainty and confidence needed to produce high-quality carbon 
credits. This Committee has previously engaged on the topic of 
ecosystem service markets. The 2008 Farm Bill included a provision 
directing USDA to establish guidelines that could quantify and 
communicate the value of conservation practices. It is my hope that we 
can build on that effort here today, as well as draw on the input the 
Committee has received through stakeholder briefings this year.
    Additionally, I would be remiss if I did not acknowledge our farm 
bill conservation programs in this conversation. These programs play a 
leading role in improving farm productivity, profitability, and 
environmental stewardship. It is my hope that we can explore how carbon 
markets can work alongside these programs in the effort to further 
mitigate climate change.
    In closing, I would like to thank all of our witnesses here today. 
We look forward to your testimony. With that, I recognize Ranking 
Member Glenn Thompson for any opening remarks he may have.

    The Chairman. And with that, I will turn it over to our 
distinguished Ranking Member for his opening remarks.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    Mr. Thompson. Mr. Chairman, thank you so much. Thank you 
for holding this hearing to review carbon markets, and my 
appreciation to the distinguished panel of witnesses that we 
have. I am really looking forward to that.
    Mr. Chairman, I do want to say, and I encourage all of our 
Members on both sides of the aisle to focus on this incredibly 
important issue. Although I do want to say, in my previous role 
as Vice Chair of this Committee, I had tolerated a lot of 
diatribes from Members across the aisle who inserted issues 
that weren't really relevant or germane to the hearings and the 
things we were talking about, so I don't think in any way, we 
should run this according to procedure, and I appreciate how 
you do that. But I don't think we should be ever stepping on 
the rights and the privileges that every one of our Members 
have to exercise their voice.
    This is an incredibly important topic today. I approach it 
from--and as we explore this, I look at this in a spirit of 
optimism. The fact that we know that natural land-based 
solutions, which is agriculture, it is all forms of 
agriculture, including forestry. As I like to tell my friends, 
like Mr. Rouzer and Mr. Scott, including trees, whether we free 
range them like I do in Pennsylvania, or you all line them up--
you are very organized in certain states with your trees. And 
the fact that we know that the data shows that we sequester 6.1 
gigatons of carbon annually at this point, and as I like to 
say, I have no idea how big a gigaton is, but to put it in 
perspective, at the end of the day the data also shows that we 
sequester over ten percent more carbon than what we produce on 
those lands, leading to the conclusion by a third party, the 
number one thing that we can do to reduce greenhouse gas 
emissions around the world is for American farmers, ranchers, 
and foresters to produce more and export it overseas. Largely 
because of our productivity, it has increased 287 percent in 40 
years. Pretty impressive.
    So, I look at this not as doom and gloom in this 
discussion, but in optimism because it is the American farmer, 
rancher, and forester that is leading on climate and doing the 
right things, and we know that it is what we do in American 
agriculture--science, technology and innovation, so that means 
we can always do it better, and we should push ourselves to 
even increase those numbers.
    In July, I requested this hearing along with legislative 
hearings on several proposed climate bills within our 
jurisdiction, and unfortunately, it seems like many Members and 
stakeholders feel rushed to move legislation on carbon markets 
without Congress thoroughly vetting the issue. And that is why 
I am thankful for this hearing today. That is what we are 
doing. We are vetting today. Honestly, I would have preferred a 
hearing on the many issues the Committee should be addressing, 
such as the farm bill implementation, the oversight of COVID 
relief, or simply a general audience with the Secretary of 
Agriculture or other USDA officials. But having said that, I 
support the private marketplace and feel comfortable to let it 
potentially grow into a means of supporting farmers' journeys 
to more sustainable practices, or let it fail if the economics 
don't work for the farmers and ranchers.
    But with the Senate's insistence on instituting what is 
essentially a new regulatory regime through the Growing Climate 
Solutions Act (S. 1251), that body is forcing the House to 
evaluate the efficacy of these markets now. Now, without 
government intervention, the marketplace could answer questions 
of permanence, science, or fairness to the markets, and if we 
provide market information through a USDA website, as the 
Growing Climate Solutions Act requires, the government becomes 
a certifier of the middle men. Now, we need to be more diligent 
in our oversight of these markets and its players now, before 
we legislate in this space.
    As farm groups across the spectrum have lavished praise on 
these markets, we only now are hearing from participants about 
the enormous length and complexity of contracts, and the meager 
prices farmers receive through these markets. The markets are 
woefully inadequate in covering even the basic implementation 
costs of carbon sequestering practices.
    One example presented in the recent report by the National 
Sustainable Agriculture Coalition is especially telling. The 
Natural Resources Conversation Service will pay a producer 
$53.41 an acre over 5 years to implement cover crops through 
EQIP. Still, the current price in the Indigo Agriculture carbon 
market is $3.30 per acre, by passing the Growing Climate 
Solutions Act Congress is implicitly supporting these minuscule 
prices.
    Additionally, there has been very little discussion on the 
effect of these markets on the socially disadvantaged 
community. Most carbon markets prioritize large operations, 
large acreage to gain the economies-of-scale. It is 
understandable. Again, it is noted in the NSAC's report, NORI 
requires a minimum of 1,000 acres enrolled to qualify. Now, 
giving more resources to the largest and most innovative farms 
seems regressive when Congress and the Administrations are 
trying to ensure socially disadvantaged farmers who 
overwhelmingly operate small farms and small acreage are 
treated fairly.
    Another problem I see is stakeholders, including the Food 
and Agriculture Climate Alliance, continue to suggest policy 
proposals to make up for the inequities of the carbon markets, 
that is incredibly small compared to our current farm bill 
conservation programs. Policy suggestions such as payments for 
early adopters, a carbon bank to increase the price and demand 
of credits, and a carbon bank to help with other racial, 
regional, and economic disparities again illustrate the need to 
evaluate these markets.
    Now, I recognize the landscape of this subject has changed 
over the past decade, but I think it behooves us to remember 
that during the 111th Congress, we debated cap and trade. At 
first, farmers and ranchers were sold on the opportunity to 
find new markets from trading sequestered carbon. When we all 
saw how that could have ended, with minimal opportunity for row 
crops, and a rise of the cost of inputs.
    Now, I sincerely wish USDA was here to testify, as 
Republicans suggested to the Majority, to answer questions on 
these markets. If they were invited to testify today, USDA 
would tell us the top three barriers to entry for agriculture 
producers participating in private carbon markets are a lack of 
demand, confusion in the marketplace, and high transaction 
costs with very little benefits for farmers. We would hear from 
2013 through June 2020, just less than 140 million carbon 
credits were verified across all industries in the United 
States. Of those credits, about 2.5 million, less than two 
percent, came from the agriculture sector. So, here we are, 
discussing a market that provides a few million dollars a year 
to U.S. producers that do not cover the cost of their 
activities, compared to the current farm bill conservation 
programs that provide nearly $6 billion per year in incentives 
and cost-shares. I think we are both very proud of the fact of 
what that farm bill conservation title does.
    Now, I ask my colleagues, do we understand the complicated 
process landowners have to go through to generate and become 
profitable in a carbon market? Do we have a sense of what is 
happening in the private-sector and the markets currently? Why 
is there so much focus on carbon sequestration and not on other 
environmental service markets? Why should USDA resources be 
diverted from proven conservation programs to stand-up carbon 
markets as proposed in related legislation?
    Now, I really do want to thank the Chairman for allowing 
witnesses with diverse opinions to testify in these markets, 
unlike the Senate Agriculture Committee who only permitted 
witnesses favorable to the Growing Climate Solutions Act, 
ensuring the narrative of no concerns with these markets was 
upheld. I look forward to a more robust conversation and I am 
really looking forward to the testimony of all of our 
witnesses, and their perspective and experiences. But again, I 
want to make clear this subject and the related legislation 
deserve much more scrutiny than one hearing.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you.
    Mr. Austin Scott of Georgia. Mr. Chairman, I have a point 
of order.
    The Chairman. Thank you, Ranking Member----
    Mr. Austin Scott of Georgia. Mr. Chairman, I have a point 
of order. Mr. Chairman, I have a point of order.
    The Chairman. The chair would request that other Members 
submit their opening statements for the record so witnesses may 
begin their testimony, and to ensure that there is ample time 
for questions.
    [The prepared statement of Ms. Schrier follows:]

 Prepared Statement of Hon. Kim Schrier, a Representative in Congress 
                            from Washington
    Farmers and ranchers are at the front lines of the climate crisis. 
Across the country, droughts, fires, and floods are affecting their 
livelihoods. Carbon markets are one tool we have to address and 
mitigate the growing threat of climate change. Carbon markets have the 
potential to make an impact and have garnered broad bipartisan support. 
But they do need to be implemented thoughtfully to ensure that they 
result in long-lasting carbon sequestration.
    I first want to talk about forests, which have enormous potential 
to sequester carbon. As conventional agriculture works to develop and 
implement regenerative practices and carbon markets, forests have 
greater carbon storage potential in the near-term. Increasing carbon 
sequestration through forestry is simple--it is grounded in science-
based forest management.
    While there are often high barriers to entry into these markets, we 
know what the right practices are: hazardous fuels management, 
reforestation, and supporting an active wood products industry.
    In addition to the carbon storage benefits, implementing these 
practices, both on public and private lands, also has the potential to 
reduce the frequency and severity of wildfires. It also provides 
ecological benefits, such as improved wildlife habitat. Traditional 
threats to forests like wildfire still pose risks to the forestry 
carbon market. And disease can rapidly erase years of progress. 
Therefore, active and aggressive forest management is key to mitigate 
these risks and make our forests more resilient.
    We need an all hands-on-deck approach to forest management, which 
is why I introduced the National Prescribed Fire Act (H.R. 3442) to 
increase Federal investment in prescribed burning as a pre-season 
wildfire mitigation strategy. I also helped secure $60 million in this 
year's budget for the Collaborative Forest Landscape Restoration 
Program (CFLRP) and am working with local stakeholders in my district 
to bring a small diameter sawmill to central Washington
    I also want to note that private companies interested in offsetting 
their carbon footprint understand the potential forests hold and are 
driving demand for carbon credits from forests. Not only do these 
companies want to invest in forests, they want to invest in forests 
domestically.
    While these markets represent great potential in both forestry and 
conventional agriculture, they are not the only way to offset carbon 
emissions and are currently ill equipped to support the small and 
medium farmers, such as specialty crop farmers and orchardists in my 
district. That is why it is so important that these markets are 
voluntary. We need to ensure the incentives promoting climate-smart 
agriculture are not just rewarding big farms, corporations, and those 
with the resources to benefit from these programs.
    We need to support programs such as the Sustainable Farms and 
Fields program that was recently signed into law in Washington State. 
This bipartisan, voluntary program supports farmers in the 
implementation of practices that increase agricultural carbon 
sequestration. The program is particularly suitable for small- and 
medium-sized farms because farmers do not have to enter a carbon market 
to be compensated for sequestering carbon.
    It crucially gives farmers different options for participation. For 
example, funds can be used for site-specific consultations, the 
purchase of goods such as seed for cover cropping, the purchase of 
shared-use equipment such as no-till seed drills, and direct payments 
for contracted carbon storage. It also supports first-time, low-income, 
and minority farmers by providing technical and financial assistance 
through conservation districts.
    I sent a letter to Secretary Vilsack in March highlighting the 
potential of this program and asking for its consideration as a 
demonstration project for future Federal programs that incentivize 
farmers to sequester carbon and improve soil health on their land. I 
look forward to continuing to work with USDA and my colleagues on this 
Committee to ensure we incentivize all farmers and ranchers to adopt 
climate friendly practices.

    Mr. Austin Scott of Georgia. Mr. Chairman, I have a point 
of order that is timely.
    The Chairman. Our witnesses today are the following. Ms. 
Debbie Reed, Executive----
    Mr. Austin Scott of Georgia. Mr. Chairman, I have a point 
of order that is timely. Mr. Chairman, my point----
    The Chairman. Mr. Scott, you are out of order.
    Mr. Austin Scott of Georgia. No, sir----
    The Chairman. This hearing goes forward.
    Mr. Austin Scott of Georgia. With all due respect, 
Chairman, you are out of order. I have a point of order that is 
timely. I made a point of order that is timely.
    The Chairman. Mr. Scott, I am tired of your shenanigans. I 
am tired of your disrespect, and if you do not change what you 
are doing----
    Mr. Austin Scott of Georgia. I have a point of order that 
is timely, Mr. Chairman. My question is where in the rules does 
the chair get to dictate what a Member can and cannot discuss? 
We have always, regardless of who was in charge----
    The Chairman. I remind the Members to be respectful.
    Now, Mr. Scott, you have used every single meeting we have 
had, you have disrespected the blueberry bill, which was there 
for a very good industry, you have disrespected other Members' 
bills. Every meeting, you have tried to hijack this Committee--
--
    Mr. Austin Scott of Georgia. That is not true, Mr. 
Chairman.
    The Chairman.--and here we are--yes, it is.
    Mr. Austin Scott of Georgia. It is not true.
    The Chairman. So, with that, I am moving this hearing on. I 
am not going to allow you to disrespect these witnesses with 
your selfishness and your disrespect.
    Mr. Austin Scott of Georgia. Mr. Chairman, I have a simple 
question.
    The Chairman. The hearing goes forward.
    Mr. Austin Scott of Georgia. I asked you a simple question. 
Where in the rules do you have the----
    The Chairman. The hearing goes forward.
    Mr. Austin Scott of Georgia.--authority to tell a Member 
what they can and cannot ask?
    The Chairman. Our witnesses today are Ms. Debbie Reed, 
Executive Director of the Ecosystem Services Market Consortium. 
We have Mr. Leo Bastos, Senior Vice President, Head of Global 
Commercial Ecosystems at Bayer. We also have Mr. Brian Luoma, 
President and Chief Executive Officer at The Westervelt Company 
on behalf of National Alliance of Forest Owners. We also have 
Mr. David Antonioli, Chief Executive Officer at Verra. We also 
have Ms. Callie Eideberg, Director of Government Relations at 
Environmental Defense Fund, and we also have Mr. David 
Milligan, President of the National Association of Wheat 
Growers, and we also have Ms. Jeanne Merrill, Policy Director 
at the California Climate and Agriculture Network, on behalf of 
National Sustainable Agriculture Coalition. What a wonderful 
and distinguished group of witnesses we have, and I am so 
pleased to have each of you here with us.
    The process for you witnesses will proceed as follows. Each 
of you, when you are called upon, will have 5 minutes. There is 
a timer that should be visible to you on your screen, and will 
count down to zero, at which point your time has expired.
    So, Ms. Reed, let us begin with you when you are ready, and 
welcome, Ms. Reed.

STATEMENT OF DEBBIE REED, EXECUTIVE DIRECTOR AND MEMBER, BOARD 
    OF DIRECTORS, ECOSYSTEM SERVICES MARKET CONSORTIUM AND 
                       ECOSYSTEMS MARKET 
             RESEARCH CONSORTIUM, WASHINGTON, D.C.

    Ms. Reed. Good morning, Chairman Scott, Ranking Member 
Thompson, and distinguished Committee Members. Thank you for 
the opportunity to appear before you today. I am Debbie Reed, 
the Executive Director of the Ecosystem Services Market 
Consortium, and our research arm, the Ecosystem Services Market 
Research Consortium.
    With 25 years' experience working in private voluntary 
carbon and ecosystem service markets with an exclusive focus on 
agriculture, I am delighted to see the strong and growing 
interest in the value of natural climate solutions from working 
ag lands.
    ESMC is a member-based, nonprofit organization with over 80 
members across the agricultural supply chain and value chain. 
Our members have co-invested with us in a national scale 
science-based voluntary ecosystem service market program, 
devoted exclusively to agriculture. We generate multiple 
stacked environmental credits from farms and ranches. Our 
members include a wide range of food and beverage companies, 
agribusinesses, farmer-led associations, farmer check-offs and 
cooperatives, conservation NGOs, and land-grant universities. 
Our innovative program generates multiple credits in high 
demand from corporates as well as from municipalities and 
government agencies, all of whom are currently engaged in our 
products across the country as buyers of these credits.
    ESMC's mission is to scale soil health and beneficial 
impacts from agriculture. That success requires that we 
adequately compensate farmers and ranchers for their services 
that are in such high demand, and provide them the tools to be 
successful in these markets. While we can operate in 
traditional carbon markets, right now we are not. To meet our 
members' highest needs, we are operating in a new market 
context across agricultural supply chains. Private-sector 
action is the reason there is a new and significant demand for 
natural climate solutions and ecosystem services markets. Our 
member corporations in the food and beverage sector and ag 
value chain are investing millions of dollars to reduce their 
environmental footprint from food and agriculture. ESMC is an 
enabling program to leverage those private-sector investments 
and ensure these organizations are successful at scale.
    This new market is different than traditional carbon offset 
markets, and can provide additional income streams to farmers 
and ranchers.
    When private-sector corporations calculate their greenhouse 
gas inventory and commit to reduce that inventory, they 
calculate their direct greenhouse gas emissions from their 
facilities and operations, and their indirect emissions from 
their supply chains. Corporations can purchase carbon offsets 
to help reduce their direct greenhouse gas emissions, but 
market standards and accounting rules prohibit the purchase of 
offset credits to reduce indirect supply chain emissions. 
Companies have to actively generate emission reductions from 
the farms and the ranches they produce products from and 
purchase those products from, and they file annual reports 
quantifying the environmental impacts achieved.
    Those supply chain emission reductions are referred to as 
insets. They are not the same as carbon offsets. They are not 
tradable assets like carbon offsets, and they can't be 
generated, claimed, or sold to anyone outside the ag supply 
chain. Up to 90 percent of the total greenhouse gas footprint 
for many food and beverage companies is from their indirect 
agricultural supply chain. That means the majority of their 
actions and investment have to come from farmers and ranchers 
in their supply chain. It is costly and resource-intensive for 
every company to do that individually across their entire 
supply chain for all their purchased commodities, and it is 
hard to reach farmers and ranchers across the country.
    ESMC's program enables collective action across our 
members, which include buyers and sellers in the same supply 
chains and on-the-ground partners like The Nature Conservancy 
and farm organizations. Ours is a collective team effort. Our 
model allows multiple members to co-invest in projects and 
share costs. ESMC ensures the protocols we use are standard-
based, science-based, transparent, and validated by global 
standard bodies, and we undertake the role of quantification. 
We work with independent verifiers, and we issue high quality 
credits that corporations buy. We then pay the farmers and 
ranchers whose actions create the value. We can stack and sell 
the credits in a bundle, or disaggregate and sell them 
separately.
    Our member corporations, including companies like General 
Mills, ADM, Nestle, and McDonald's, for instance, are buying 
the carbon inset credits, and in some cases, the water quality 
credits from these projects as well. We have municipalities and 
state agencies such as the Kansas Department of Health and 
Environment Corps purchasing the water quality credits, and we 
recently launched our first cropland project, which includes 
buyer diversity credits as well, to be purchased by the 
Missouri Department of Conservation.
    I would like to publicly thank our members and funders for 
their partnership, their collaboration, and ongoing 
contributions. I appreciate the opportunity to appear here 
today to discuss how these markets work and how they can 
benefit farmers and ranchers.
    Thank you.
    [The prepared statement of Ms. Reed follows:]

Prepared Statement of Debbie Reed, Executive Director and Member, Board 
   of Directors, Ecosystem Services Market Consortium and Ecosystems 
              Market Research Consortium, Washington, D.C.
    Chairman Scott, Ranking Member Thompson, and other distinguished 
Members of the House Agriculture Committee, thank you for the 
opportunity to testify today to discuss voluntary carbon markets for 
agriculture and forestry. My name is Debbie Reed and I am the Executive 
Director of the Ecosystem Services Market Consortium (ESMC), a member-
based, not-for-profit organization launching a national scale ecosystem 
services market for agriculture to recognize and reward farmers and 
ranchers for their environmental services to society. We appreciate the 
opportunity to provide feedback to the Committee on how these markets 
work and how they can benefit our American farmers, ranchers and 
foresters and I look forward to answering your questions today.
The Ecosystem Services Market Consortium (ESMC)
    ESMC is a nonprofit organization, and a public-private partnership. 
We have raised and are investing to date approximately $23 million in 
our voluntary, private market program, leveraging Federal and private-
sector funds. We operate in the pre-competitive space to enable 
collective action and collective success across the agricultural supply 
chain and value chain.
    ESMC's mission is to scale beneficial environmental outcomes from 
agriculture, using private voluntary markets as the mechanism. We 
operate a market exclusively for generating ecosystem services credits 
from the agricultural sector. Our innovative program, business model 
and protocols were designed to overcome the challenges and failures of 
past and current markets to accommodate agricultural projects, and to 
account for and stack the many benefits of agricultural systems 
outcomes--not just carbon or greenhouse gases (GHG). Our projects 
generate credits for increased soil carbon, reduced GHG outcomes, 
improved water quality, water use conservation, and biodiversity. By 
stacking multiple credits, we ensure that all the beneficial impacts to 
society are quantified and verified; and by selling them separately or 
in a bundle we ensure that farmers and ranchers are paid for each of 
these services, all of which are currently in high demand.
    ESMC's value proposition to members is a national scale, harmonized 
standardized market program that streamlines and lowers the burden on 
farmers and ranchers, and ensures our science-based, standards-based 
market program and all credits generated by our program are credible 
and have the highest integrity. This credibility is important to buyers 
and investors in carbon and ecosystem credits--whether corporate, 
municipal, or local government buyers--to ensure the outcomes they pay 
for are real and verified. These credits are intangible assets--they 
represent products that often cannot be seen or sold in a store. For 
this reason, we must ensure the proper quantification, verification, 
and certification of these credits to prevent buyers and agricultural 
producers who sell credits to avoid charges of green-washing or green-
wishing.
    With corporations now facing the prospect of mandatory financial 
disclosures and Securities and Exchange Commission (SEC) filings of 
their climate risk and mitigation plans, as well as their annual ESG 
reports, credibility and integrity of their mitigation plans and 
strategies and documentation of progress will take on an entirely new 
requirement, with potential regulatory and additional financial risks 
if these plans are deemed insufficient or inaccurate.
Ecosystem Services Market Research Consortium (ESMRC)
    ESMC operates its market program and a separate research program, 
[ESMRC]. ESMRC is the business incubator for ESMC in which we are 
investing in technologically advanced infrastructure, tools, 
technologies and an innovative market design to overcome past and 
current challenges in these markets--particularly challenges to 
agricultural participation.
ESMC's Next Generation Market Program for Agriculture
    ESMC has engaged in due diligence to develop this program. Planning 
began in 2017 with a series of multi-stakeholder roundtable discussion 
to assess interest and need for a new market program. The stakeholder 
discussions arrived at consensus agreement that a fit-for-purpose 
national scale, next generation ecosystems market for agriculture was 
desired. In 2018 we developed our first-generation innovative, 
integrated multi-credit protocols and our innovative market design.
    In 2019, with the generous funding and support of a $10.3 million 
grant from the Foundation for Food and Agriculture Research (FFAR), we 
launched our member-based consortium, in which we are leveraging 
another $10.3 million in private-sector investments from members to 
match the FFAR grant. Together with these funds and additional funds 
from philanthropic and other private-sector contributions, our member-
based consortium is co-investing $23 million in the build-out of a 
national scale, harmonized, dedicated program to ensure success of all 
our partners in the agricultural supply chain and value chain in 
realizing improved and sustainable outcomes from the agricultural 
sector.
    ESMC has over 80 members across the agricultural supply chain and 
value chain. Figure 1 below depicts our current members and funders who 
are collaborators and co-investors in our unique market program.
Figure 1: ESMC/ESMRC Members and Funders


ESMC/ESMRC: Enabling Collective Success
    Since 2015, private-sector corporations have taken on new and 
increased commitments to reduce their carbon and GHG footprints, reduce 
their consumptive water use, improve impacts to water quality, and 
protect natural resource and biodiversity outcomes within their 
operations and supply chain operations. These commitments have 
increased exponentially since 2018 as the world's scientists have 
agreed not only that we must utilize all tools to combat climate change 
and associated impacts, but that every sector must play a decisive role 
in the same.
    The programmatic and infrastructure investments ESMC and ESMRC are 
making overcome the need for every company to make these investments 
themselves. ESMC/ESMRC is an enabling platform for collective 
investments, collective action, and shared collective benefits.
    Corporations in our membership are investing millions of dollars a 
year each on regenerative and sustainable agricultural outcomes. In 
many cases they are struggling to effect change within their 
agricultural supply chain, and to appropriately quantify and document 
the outcomes of actions agricultural producers in their supply chain 
have undertaken to reduce their environmental footprints.
    Private corporations will find it hard to justify continue 
investments in these activities if they cannot show with certainty and 
credibility that the outcomes they are achieving result in real, 
quantified, verified improvements in soil carbon, reduced GHG 
emissions, and improved water and biodiversity impacts. They must show 
impacts to make valid claims for these outcomes in the annual ESG 
reports they file.
    ESMC's collective enabling program ensures they are successful. We 
take on not just the programmatic infrastructure development burden, 
but are having our projects, protocols, quantification and verification 
approaches approved and validated by appropriate third party standards. 
In our case, we are working with Gold Standard and SustainCERT to 
achieve this work.
    A successful market requires not just that we meet the needs of 
buyers, but sellers as well. ESMC/ESMRC's model is dependent on 
ensuring that the farmers and ranchers who work in partnership with us 
and with the corporations to achieve improved environmental footprints 
are adequately compensated for their actions and have all the tools and 
technologies necessary to be successful as well. For these markets to 
work, we need to ensure we are generating enough supply to meet the 
growing buyer demand. Farmers and ranchers are the supply side in this 
market program, and our goal is to arm them with the resources they 
need to supply the credits in high demand. Farmers and ranchers are 
farming and ranching first and foremost, and if these markets don't 
work for them and contribute also to their success, we cannot hope to 
succeed.
    ESMC operates a Producer Circle of 34 farmers and ranchers from 
across the country. The Producer Circle is an advisory body that 
provides grower insights to our program, reviews and provides feedback 
to materials and the program operations, and in general ensures that 
the voices of farmers and ranchers are represented in our operations. 
The Producer Circle is in addition to the many growers involved in our 
projects across the country, and the many national and state level 
producer groups represented in our membership whose valuable voices 
also help guide program development and operations.
ESMC/ESMRC's Program and Current Deployment
    ESMC/ESMRC is concluding year 2 of our 3 year market program 
infrastructure build-out in which we have been pressure testing the 
entire program and refining it in preparation for a full market launch 
in September 2022. Our pre-market soft launch has enabled us to test 
the program in multiple regions and all major agricultural production 
systems, and we are constantly launching new projects. This year we are 
launching full dairy operation projects in two regions of the country, 
an almond project in California, and an animal feed production project 
in the Southeast. We are also able to operate scaled projects beginning 
in January 2022 based on the program refinements accorded by our 
project activities to date.
    ESMC is selling credits in our projects currently and paying 
producers for the credits. For instance, checks are currently going out 
to wheat growers for a Kansas project in which General Mills Inc. is 
purchasing supply chain carbon assets and the Kansas Department of 
Health and Environment are purchasing water quality credits from the 
same project.
    For our national scale launch in September 2022, we are refining 
program contracts to ensure the program operates smoothly at scale. We 
are also completing sensitivity analyses across the program to reduce 
data collection requirements and producer burdens, while ensuring we 
still meet buyer needs and market standards to generate verified, 
certified credits.
    We would like to publicly thank our members and funders for their 
partnership, collaboration and contributions in building this 
innovative market program. Together we have built out and tested our 
program with our members and collaborators to ensure it meets 
everyone's needs. Our program currently covers all major crop and 
livestock systems across about 75% of the U.S. We generate quantified 
and verified credits for soil carbon increases, total greenhouse gas 
emissions, water quality improvements, water use conservation (where 
there is demand), and have just launched our first project in Missouri 
soy and corn systems that will generate and sell biodiversity credits 
as well.
Figure 2: ESMC/ESMRC Program Coverage in 2022: all major crop and 
        livestock systems
        
        
Private Voluntary Ecosystem Services Markets: The Genesis of Carbon 
        Markets
    Successful markets link supply and demand for goods and services. 
In carbon markets, the original demand started approximately 25 years 
ago with the UN Framework Convention on Climate Change (UNFCCC), when 
countries committed to reduce their GHG inventories each year to try to 
head off dangerous impacts of global climate change. Under the UNFCCC, 
each country calculated their total GHG inventories, and developed 
plans to reduce GHG emissions over time. The U.S., as a signatory to 
the UNFCCC, reports its annual GHG inventory and progress in meeting 
emissions reductions every year, as do all other countries who are 
signatories.
    The greatest source of GHG emissions for most industrialized 
countries, including the U.S., has historically been the energy, 
transportation, buildings and manufacturing sectors. As such early 
efforts in the U.S. and globally focused on reducing emissions from 
these sectors. These are capital intensive sectors with long investment 
and capital turnover times--so emissions reductions approaches tend to 
be costly and offer greater medium- to long-term emissions reductions 
opportunities than shorter-term, cost-effective ones.
    It was recognized that other sectors could provide more immediate 
and less costly GHG emissions reductions at far less cost than these 
sectors. This was the original genesis for carbon markets. The intent 
was for a given period of time to allow the GHG-intensive, capital-
intensive sectors to purchase emissions reductions from these other 
sectors while capital turnover and long-horizon investments in GHG 
emissions reductions technologies were made.
    From the early days, agriculture and forestry have been viewed as 
sectors with great potential to provide offset credits for other 
sectors in these carbon markets. Since forestry credits are relatively 
easier to develop than agricultural credits, forestry projects have 
proliferated in these markets and have become fairly well established 
as a sector for carbon-intensive sectors to purchase credits from. 
Agricultural projects proved harder to scale, for many reasons, and 
have never really take off in these markets to date. But that is 
changing.
The Sudden Growth and Interest in Carbon and Ecosystem Services Markets
    Since their genesis 25 years ago, carbon markets have made slow but 
steady growth. Compliance markets, which are those created by 
legislation or a regulatory requirement, generally operate within a 
certain government jurisdiction. Examples of compliance market programs 
include California's cap-and-trade market, the European Union's 
Emissions Trading System (EU ETS), and the Regional Greenhouse Gas 
Initiative (RGGI), comprised of eleven states operating the first 
regional cap-and-trade program. In a compliance market a regulatory 
body establishes annual ``caps'' or upper limits of GHG emissions in a 
given jurisdiction and designates which high emitting sectors are 
subject to these ``caps''. Regulators then establish annual emission 
reduction targets for the jurisdiction and for capped sectors in the 
jurisdiction. Typically, capped sectors are given some percentage 
amount of their emissions reductions that they can achieve by buying 
credits from others--in the form of carbon offset credits. Besides 
purchasing offset credits, the capped sectors must devise ways to 
reduce their GHG footprints within their own operations--through energy 
efficiency measures, for instance, or by devising means to operate with 
new technologies that do not emit GHG or that emit fewer GHG emissions.
    Voluntary carbon markets, by contrast, operate without regulatory 
or legislative mandates for emissions reductions to be achieved. 
Voluntary markets have been market venues for corporates who have made 
voluntary commitments to reduce their GHG inventories. They operate 
like compliance carbon markets, but without legislative or regulatory 
mandates or total caps on GHG emissions.
    What has changed and created a sudden uptick of activity and demand 
in these markets? It is not compliance market or regulatory market 
activity, but rather voluntary action by the private-sector. When the 
Paris Agreement was reached in 2015 under the UNFCCC, many private-
sector corporations and multinationals made either new robust 
voluntary, commitments to reduce their GHG, and some who had existing 
commitments doubled down and took on more stringent emissions reduction 
commitments. These corporates are doing what governments had previously 
done to stimulate these markets in the first place. They are assessing 
their total GHG inventories, and then developing concrete plans to 
reduce their GHG emissions on an annual basis. Since 2015, the number 
of industries and companies in the private-sector who have taken on 
emissions reductions commitments has rapidly escalated. We have all 
seen the drumbeat of new commitments from private-sector corporations 
as well as many government jurisdictions--from national to local--to 
become climate neutral, achieve net zero GHG emissions, or become 
climate positive.
    In addition to reducing just their own direct GHG footprints, 
however, these corporations are also looking at their indirect supply 
chain GHG footprints and striving to reduce these footprints as well. 
Supply chain activity from private corporations is what is new and 
different and creating a robust new demand for carbon credits. But 
these credits are not what we traditionally think of when we think of 
carbon offset credits. Actions that reduce GHG emissions within a 
supply chain are sometimes referred to as carbon insets, rather than 
offsets. They have a different purpose and serve a different 
requirement for reporting companies. Companies cannot utilize carbon 
offsets to make claims within their supply chain inventories.
What is a carbon offset credit?
    What is a carbon offset credit? Carbon markets are global in 
nature, and carbon credits have an accepted representation in these 
markets. One carbon credit represents 1 ton of carbon removed from the 
atmosphere (in the case of soil carbon sequestration, for example, 
which removes carbon from the atmosphere and stores it in soil), or 1 
ton of GHG emissions reductions, which can include reduced nitrous 
oxide (N2O) emissions or reduced methane (CH4), 
as well as carbon dioxide from reduced fossil fuel utilization. The 
credits are generally expressed as carbon dioxide equivalents 
(CO2e), which allows different GHG with different global 
warming potentials to be compared on an equivalent basis.
    A carbon offset credit is generated and can be sold when a protocol 
that has been approved by a carbon market registry is used to create 
credits that are quantified, verified and certified to carbon offset 
market standards.
Carbon Insets, or Supply Chain GHG Emission Reductions
    Not only have carbon market demands increased, but the demand 
includes a new type of credit--for carbon ``insets'', or credits that 
can account for emissions reductions achieved by the corporate sector 
within their supply chains. ESMC is the first organization to apply a 
market approach to supply chain emissions reduction reporting. These 
markets are new and additional to traditional carbon offset markets.
How are ``carbon offset'' credits different than supply chain carbon 
        ``insets''?
    Carbon Offset credits represent a `trade' of greenhouse gas 
credits. For example, Party A generates carbon credits by developing 
projects that quantify, verify and certify carbon credits according to 
market standards. Party B pays Party A for those carbon credits, and 
Party B can claim they have `reduced' their emissions by the amount of 
credits they purchase. Party A can no longer make those emissions 
reductions claims, since they sold the credits and the rights to those 
claims to Party B.
    Offset credits can originate from any sector and be sold to any 
other sector. The reduction claim, then, is transferable from any 
sector to another. That becomes problematic when trying to account for 
how much emissions reductions have been achieved in any given sector--
particularly if that sector has sold credits to another as offset 
credits. It is also problematic when, for instance, trying to account 
for emissions reductions achieved within a supply chain. If emissions 
reductions have been sold to another sector as offset credits, they 
cannot be counted towards efforts to reduce indirect supply chain 
emissions. Offset credits, then, can compete with a corporations' 
commitments and obligations to achieve emissions reductions within its 
supply chain. Emissions reductions achieved for one cannot be claimed 
for the other--since that would create double-counting.
Supply Chain GHG Emissions Reductions: ``carbon insets''
    Carbon ``Insets'' refer to emissions reductions achieved within a 
sector's supply chain. Carbon insets are emissions reductions for which 
the claims, and the right to count the emissions reductions, remain 
within that supply chain: they are not transferable to another sector. 
Insets then, are emissions reductions that remain within the sector, 
and cannot be sold to other sectors or claimed by them.
    So for ESMC, for instance, with a focus exclusively in agriculture, 
we aim to help agricultural supply chain partners such as corporate 
organizations in the food and beverage sector, to reduce their supply 
chain emissions reductions within their agricultural supply chains. 
Corporate insetting efforts and claims, then, are more of a team effort 
within the supply chain.
    In ESMC's program, and in agricultural supply chain programs, 
carbon insets that represent 1 ton of increased soil carbon or 1 ton of 
reduced GHG emissions are impacts and claims that that are `retained' 
within the ag supply chain: they are not attributable elsewhere, and 
thus are not `tradable' assets
    These carbon insets can be co-claimed by different organizations in 
the supply chain, however, which enables collective action to generate 
and share in their claims. So for instance, if a rancher in Texas 
generates a carbon inset credit on her ranch, and sells the beef to 
Party A, who processes the beef and sells half of it to Party B and 
half of it to Party C, all of these actors in that supply chain can 
share in the emissions reductions claims. This allows multiple partners 
to collectively invest in projects, working with the Texas rancher and 
with each other.
    This collective investment reduces these corporations' costs, but 
done right, the `stacked' investments of these corporates can ensure 
that the rancher is paid enough to make it worthwhile to change 
practices on her ranch that lead to increased soil carbon and/or 
reduced GHG.
What about other Ecosystem Services Market Credits?
    Increasingly, these same private-sector corporations who are making 
voluntary carbon and GHG emissions reduction commitments are also 
taking on commitments to reduce their water quality footprints and 
their water use, and to improve their biodiversity impacts. ESMC's 
market program was set up to generate not just increased soil carbon 
credits, but also reduced net GHG emissions, improved water quality and 
water use conservation.
    In all of our projects we are generating soil carbon, GHG and water 
quality credits. An almond pilot and a dairy pilot that we are 
launching this year with partners--both in California--will also 
generate water quantity credits. We have also just launched our first 
project in Missouri in which we are also generating biodiversity 
credits--in addition to the soil carbon, GHG and water quality 
credits--on soy and corn cropping systems.
How ESMC's Market Program Meets Corporate ``Carbon Inset'' Needs
    The entirety of ESMC's program focus right now is working with the 
food and beverage sector and the agricultural supply chain to generate 
stacked credits to meet corporate needs and demands in the agricultural 
supply chain. We have found that in some projects--such as our Kansas 
and Missouri projects--we have different buyers for different credits. 
In our Kansas wheat project General Mills is buying the supply chain 
carbon inset credits, and the Kansas Department of Health and 
Environment is buying the water quality credits.
Why the Sudden Interest in Agricultural Offset and Inset Credits?
    During the 2015 Paris Accord, the worlds' scientists indicated that 
we are seeing extreme weather events and other anticipated consequences 
of unmitigated climate change, and to stabilize the climate we must 
only not stop emitting more GHG, but actively remove GHG from the 
atmosphere. Also, it was agreed that every sector has to reduce GHG 
emissions--we can no longer afford to pick and choose from various GHG 
emissions reductions pathways if we are to prevent continued dangerous 
climate disruptions. The only currently available opportunities for 
cost-effective carbon removals at scale are from biological systems: 
increased soil carbon sequestration, and forestry sequestration.
    There are industrial carbon removal technologies in development but 
they tend to be incredibly expensive, not operational at scale, and 
largely pre-commercial. Agricultural and forestry carbon removals and 
reductions can occur now, more cost-effectively than many other 
options, and at scale. The health and welfare of our food production 
systems and ecosystems and human populations depend on these outcomes. 
The actions that improve soil carbon sequestration and reduce GHG 
emissions from agriculture and forestry not only combat climate change, 
they make those natural and managed ecosystems more resilient to 
climate change. These natural climate solutions benefit everyone, and 
not surprisingly, are in high demand from corporations as well as 
consumers and society.
    I appreciate the opportunity to testify today and look forward to 
answering your questions.
            Sincerely,

Debbie Reed,
Executive Director,
Ecosystem Services Market Consortium LLC (ESMC).

    The Chairman. Thank you so very much, Ms. Reed, for your 
excellent testimony.
    And now, I will turn next to Mr. Bastos. You are now 
recognized for 5 minutes.

           STATEMENT OF LEONARDO BASTOS, SENIOR VICE 
  PRESIDENT--HEAD OF GLOBAL COMMERCIAL ECOSYSTEMS, BAYER CROP 
                     SCIENCE, ST. LOUIS, MO

    Mr. Bastos. Thank you, Chairman Scott, Ranking Member 
Thompson, and Members of the Committee. Thank you for holding 
this important hearing today and for inviting me to testify.
    My name is Leo Bastos, and I am the Senior Vice President 
of Global Commercial Ecosystems at Bayer Crop Science. Bayer 
Crop Science is a division of Bayer that works with farmers to 
provide them with seeds, traits, crop protection products, and 
additional farming products to American farmers.
    Bayer is committed to de-carbonize the agriculture sector 
and remove greenhouse gases already in the atmosphere to reduce 
the impacts of climate change. We are also committed to 
research and innovation to increase agriculture's resiliency to 
climate change impacts that are actually reduced and farmers 
are already experiencing.
    Agriculture can be part of the solution for climate change. 
By helping farmers produce more while removing greenhouse gases 
and storing carbon deep into the soil. Carbon markets are an 
economically efficient way to reduce greenhouse gases by 
incentivizing adoption of agronomic practices that contribute 
to healthier soils, enhancing yield, while ensuring growers 
they can turn their soil into a big part of their farming 
business.
    More than a year ago, Bayer began enrolling farmers in a 
carbon program that pays them to adopt agronomic practices 
primarily in no-till and cover crops, and these farmers do not 
have be part of the Bayer customer base. They don't have to buy 
Bayer seed. They don't have to buy Bayer crop inputs to 
participate in the program.
    There are a couple of things that make us a little bit 
different. One is we eliminate the risk for farmers 
economically because they have typically to invest up front, 
they have to measure, and then get paid. What we actually do is 
pay up front so farmers can make an economic decision and have 
the opportunity to participate in carbon marketplace.
    The second thing--and it still is in development--is a low-
touch, low-cost verification and quantification of carbon 
sequestration, so there is more money available as a revenue 
stream for farmers. We are harnessing the power of farm data, 
digital technologies, and imagery to verify, quantify, and 
validate the carbon stored into the soil. As carbon prices 
actually go up, farmers actually benefit from higher payments 
as well.
    Soil carbon standards are evolving and are being worked on 
by multiple global standard organizations, leading to still 
numerous questions and uncertainty. We hear from farmers every 
day that this uncertainty reduces their willingness to 
participate in carbon markets, whether they can be sure whether 
their investment is going to create a verifiable carbon credit.
    In order to move carbon markets forward, we must tackle 
this uncertainty and the resulting confusion by having common 
standards. This Committee can help voluntary markets scale up 
faster and provide more certainty for farmers in this rapidly 
evolving space. One way is to consider the Growing Climate 
Solutions Act, which provides a foundation for assisting 
farmers in navigating a complex system. Another is to work with 
the USDA on clarifying the concept of the carbon bank. Farmers 
and companies are expecting more clarity to make investments 
and decisions.
    Bayer's carbon program in the U.S. is just the beginning. 
We are enabling and incentivizing farmers to adopt climate-
smart practices to capture and sequester carbon in their 
fields. Similar programs are now live in Brazil, Argentina, 
India, and some select European countries. That is a good 
proposition for growers, consumers, and our planet.
    With the 2018 Farm Bill, this Committee made historic 
investments in on-farm conservation. Once again, this Committee 
is in the position to shape the future of American agriculture 
and ensure that farmers can participate and benefit from the 
growing demand for sustainably produced foods.
    We look forward to helping you and our farmer customers 
make the most of this exciting, new opportunity. Thank you.
    [The prepared statement of Mr. Bastos follows:]

 Prepared Statement of Leonardo Bastos, Senior Vice President--Head of 
    Global Commercial Ecosystems, Bayer Crop Science, St. Louis, MO
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for holding this important hearing and for 
inviting me to testify. I am Leo Bastos and I am Senior Vice President 
and Head of Global Commercial Ecosystems for Bayer Crop Science, the 
agriculture division of Bayer that provides seeds, traits, chemistry, 
and digital products to American farmers. I am responsible for 
developing farmer-focused low-cost carbon solutions, including the 
carbon program we launched in the U.S. last year.
    Bayer is committed to helping de-carbonize the agriculture sector 
and remove greenhouse gases already in the atmosphere in order to 
reduce the impacts of climate change. We are also committed to research 
and innovating new ways to increase agriculture's resiliency to the 
climate change impacts farmers are already experiencing.
    When it comes to climate change, agriculture is a contributor to 
greenhouse gas emissions, and we must cut emissions in our sector to 
keep global warming below 2 Celsius. But agriculture can also be part 
of the climate change solution if we help farmers draw down greenhouse 
gases already in the atmosphere and store it deep in the soil. The 
science tells us that this is possible. But agriculture is complex. 
Differences in crops grown, soils, regional climates, pest and disease 
pressure, and historical practices all impact how a farmer might grow 
their crop each season. So there will be varied solutions for farmers 
all over the country. But today we are focusing on the underlying 
driver of action and innovation: trading carbon on voluntary markets. 
Carbon markets are an economically efficient way to reduce greenhouse 
gases by incentivizing rapid large-scale adoption of climate-smart 
agronomic practices that help benefit growers' soil health, potentially 
enhancing yield, while ensuring growers can turn soil carbon into a 
part of their farm business.
    The recent boom in carbon credit markets has been driven by 
consumer demand for and corporate interest in sustainability, combined 
with farmers looking to generate another revenue stream from their 
lands and their interest mitigating climate change through on-farm 
conservation practices. As an agriculture and technology company, we 
see Bayer as optimally positioned to help line up all these factors and 
deliver a climate-smart revenue stream for farmers.
    More than a year ago, Bayer began enrolling farmers in a carbon 
program that pays them to adopt agronomic practices--primarily no-till 
and cover crop planting--to sequester carbon in the soil of their 
fields. These farmers do not have to grow Bayer seeds nor use Bayer 
crop inputs to participate. There are a couple of things that make our 
program different. First, we eliminate the economic risk for farmers 
who typically must invest in climate-smart farming, measure the carbon 
stored, and then get a payment. Instead, we pay farmers for the 
practices up front so they can easily make an economic decision and 
enter the carbon marketplace. We've made it simple to enroll. Farmers 
choose the practices and fields they want to enroll and payments are 
generated independent of carbon stored.
    The second thing that we are doing that is different is low-cost, 
low-touch verification of carbon sequestration so that there is enough 
money left for a revenue stream for farmers. We do this by harnessing 
farm data, digital technologies and imaging to verify and validate the 
carbon stored in the soil. Finally, we are committed to helping farmers 
get the value of a carbon credit by ensuring future carbon credit value 
increases are shared.
    On the other side of the carbon market, we work with supply chain 
partners to link demand for carbon storage with the supply that farmers 
can provide. When it comes to the agriculture and the food value chain, 
large seed and input suppliers such as Bayer have the closest 
connection to farmers through our retail networks. This relationship to 
farmers along with our climate commitments create the opportunity for 
us to partner with other members of the value chain to help meet their 
own commitments to sustainable food systems.
    Our work to link the demand for carbon storage to farmers has 
taught us how complex voluntary carbon markets are. A carbon credit 
that is tradable on a marketplace requires verified, audited carbon 
removals that meet the science-based standards set by organizations and 
registries that regulate carbon markets. But carbon standards for soils 
are constantly evolving and are being worked on by multiple global 
standards organizations leading to numerous standards and confusion 
about what will ultimately be considered a carbon credit. We hear from 
farmers that this confusion reduces their ability to participate in 
carbon markets when they can't be sure they are making a capital 
investment that will ultimately produce a verified carbon credit.
    In order to move carbon markets forward we must tackle this 
uncertainty and the resulting confusion. We must recognize that while 
U.S. agriculture is diverse, we need consistent standards to accurately 
measure, track, and evaluate de-carbonization over the long-term. 
Consistent standards will allow farmers to participate profitably by 
giving them predictability, a return on early investments, and enabling 
monetary and technical support to ensure farmers can participate in 
this climate-sustainable market.
    This Committee can help voluntary carbon markets scale up faster 
and provide more certainty for farmers in this rapidly evolving space. 
One way the Committee can help is by passing the Growing Climate 
Solutions Act, which provides a foundation for assisting farmers 
navigating a complicated system so that they have confidence in their 
information about enter the carbon business. I also urge the Committee 
to work with USDA to eliminate the confusion created by a lack of 
information about the carbon bank concept. Farmers and companies are 
waiting to make investments and decisions until we know what the carbon 
bank is.
    Innovations in agriculture are transforming farms to not only 
reduce their emissions, but also pull carbon out of the atmosphere. 
This is the insight behind Bayer's Carbon Program in the U.S., which 
enables and incentivizes farmers to adopt climate-smart practices that 
capture and store carbon in their fields. Similar programs are now live 
in Brazil, Argentina and select European countries. By simultaneously 
prioritizing soil health, farmers' livelihoods and our climate, this 
global initiative is laying strong foundations for a net-zero carbon 
emissions future. That's good for growers, consumers and our planet.
    With the 2018 Farm Bill, this Committee made historic investments 
in on-farm conservation. Once again, this Committee is in the position 
to shape the future of American agriculture and ensure that farmers can 
participate and benefit from the consumer demand for climate 
sustainable foods. We look forward to helping you and our farmer 
customers make the most of this exciting new opportunity.

    The Chairman. Thank you, Mr. Bastos.
    And now, our next witness is Mr. Luoma.

         STATEMENT OF BRIAN LUOMA, PRESIDENT AND CHIEF 
          EXECUTIVE OFFICER, THE WESTERVELT COMPANY, 
TUSCALOOSA, AL; ON BEHALF OF NATIONAL ALLIANCE OF FOREST OWNERS

    Mr. Luoma. Thank you, Chairman Scott, Ranking Member 
Thompson, and distinguished Members of the House Agriculture 
Committee. We thank you for the opportunity to testify. Thank 
you also to all the bipartisan Working Forest Caucus Members 
who serve on this Committee, including Ranking Member Thompson 
and Caucus Co-Chair Sanford Bishop.
    I am Brian Luoma, the President and CEO of The Westervelt 
Company headquartered in Tuscaloosa, Alabama. The Westervelt 
Company was founded in 1884 and is currently under its fourth 
generation of family leadership. Westervelt is an industry 
leader in land management and wood products manufacturing, as 
well as environmental mitigation. We own and manage more than 
\1/2\ million acres, and we believe that sustainability is both 
our responsibility and our legacy.
    Our nation's forests are our most important carbon asset. 
They sequester and store billions of tons of carbon through 
tree growth, and they store billions more tons of carbon in 
wood products. Together, forest and wood products already 
offset 15 percent of the U.S. industrial carbon emissions each 
year. 70 percent of working forests in the U.S. are privately 
owned by families, businesses, and investors. Private working 
forests are sustainably managed to supply 90 percent of the 
wood and fiber for the forest products we use every day.
    At the same time, these forests account for nearly \3/4\ of 
our gross forest carbon sequestration, enough to offset 
greenhouse gas emissions from all passenger vehicles in the 
U.S. each year. But that is not all. Private forests also store 
an additional 83 billion metric tons of carbon, more than all 
other forests combined.
    Wood is 50 percent carbon by weight, so we continue to 
store carbon in long-lived wood products like the wood we use 
in building construction. Today, wood products store more than 
10 billion tons of carbon. That is nearly three times the 
amount stored in all of our National Parks combined.
    Strong traditional forest product markets are the key to 
these carbon benefits. New voluntary markets for forest carbon 
and increased wood use in mass timber construction offer new 
opportunities for even greater carbon benefits. Forest carbon 
projects that sequester and store more atmospheric carbon are 
rapidly attracting customers in voluntary markets seeking to 
reduce their carbon footprints. To date, the volume of forest 
carbon purchased has increased by over 240 percent over 2020 
levels, but mostly in Asia. Even though we have an abundance of 
forests in the U.S. and North America, forest carbon markets 
here are relatively small and maturing, particularly in the 
voluntary markets.
    We have learned much from the first generation of forest 
carbon projects through the contributions of carbon registries 
like Verra, that do exceptionally good work to help verify 
carbon benefits. We see two clear opportunities.
    First, we can increase market participation among private 
forest owners in the voluntary markets with improved protocols 
and reducing unnecessary costs and complexity.
    Second, we can increase confidence in the high-quality 
forest carbon among carbon purchasers and voluntary markets 
through improved data analysis, measurement, and verification.
    USDA operates the Forest Inventory Analysis Program, the 
world's most comprehensive forest census. Further improvement 
to the carbon data and analysis provided through FIA will help 
scale projects more quickly and reliably. Congress is also 
working to address these challenges. The Growing Climate 
Solutions Act, which passed the Senate 92-8, provides a 
template. Increased use of wood in the built environment, such 
as using advance engineered wood products like mass timber, 
significantly reduce the amount of energy required for building 
construction, while storing vast amounts of carbon in the 
completed structure. Mass timber markets will benefit 
significantly from improved data analysis via life cycle 
assessments. Reduction of the carbon footprint in public and 
private buildings will also further wood utilization.
    Recently, I joined 42 of my fellow CEOs and counterparts at 
the Environmental Defense Fund and The Nature Conservancy to 
adopt a set of principles outlining how private forests can 
provide market and incentive-based climate solutions. We also 
worked closely with the Forest Climate Working Group and the 
Food and Agriculture Climate Alliance. These collaborations are 
helping us find common ground that help pave the way for smart 
policy. My colleagues at the National Alliance of Forest Owners 
have put together a data visualization of Forest Service and 
EPA data available at forestcarbondataviz.org. We urge you to 
use this information to recognize and advance the vital role 
private forests can play.
    Thank you again for conducting this hearing. The Westervelt 
Company and the National Alliance of Forest Owners stand ready 
as willing partners. I will welcome your questions. Thank you.
    [The prepared statement of Mr. Luoma follows:]

   Prepared Statement of Brian Luoma, President and Chief Executive 
Officer, The Westervelt Company, Tuscaloosa, AL; on Behalf of National 
                       Alliance of Forest Owners
    Chairman Scott, Ranking Member Thompson, and distinguished Members 
of the House Agriculture Committee, on behalf of The Westervelt 
Company, thank you for the opportunity to testify on private working 
forests and the important role they can play as a natural climate 
solution, including through voluntary carbon markets.
Introduction
    I am the President & CEO of The Westervelt Company, a privately 
held company headquartered in Tuscaloosa, Alabama. The Westervelt 
Company was founded in 1884 and is currently under the fourth 
generation of family leadership. Westervelt is an industry leader in 
land management, wood products manufacturing, and environmental 
mitigation. We own and manage more than half a million acres of land--
growing trees and producing high quality Southern yellow pine lumber is 
the foundation of our business.
    At The Westervelt Company, we are stewards of the land. We believe 
that sustainability is both our responsibility and our legacy. Our 
company is recognized for excellence in sustainable forest management, 
responsibly sourced forest products and services, natural resource 
stewardship, and ecosystem conservation.
    Private working forests provide clean air and water, wildlife 
habitat, and jobs through market demand for forest products. Today, I'd 
like to focus on how forestry businesses like Westervelt can use this 
formula to support climate objectives by the nature of what we do--
growing trees that sequester and store carbon and making long-lived 
wood products that store carbon and displace more carbon intensive 
alternatives. With the right market signals, we can do even more. 
Voluntary carbon markets for forests are increasingly important to our 
sector and are poised to grow significantly.
Importance of Private Working Forests & Wood Products to the Climate
    Climate mitigation from our nation's forests includes two important 
elements: forest carbon sequestration and storage, and carbon storage 
in long-lived wood products. Together, sustainably managed working 
forests and the forest products they produce are already one of our 
nation's greatest assets for achieving our climate goals: U.S. forests 
and forest products offset 15% of U.S. industrial carbon emissions 
every year.
    More than \1/3\ of the United States is covered by forests, and 47% 
of U.S. forests are privately owned working forests--forests owned by 
families, businesses, and investors. These forests are sustainably 
managed to supply a steady, renewable supply of wood for lumber, 
energy, paper, and packaging, providing more than 5,000 items that 
consumers use every day. They are the source of 2.5 million well-paying 
American jobs, mainly in rural communities.
    Approximately 90% of the wood and fiber used to make forest 
products in the U.S. comes from private working forests. At the same 
time, these forests account for 72% of our gross forest carbon 
sequestration, enough to offset greenhouse gas emissions from all 
passenger vehicles in the U.S. each year. Private working forests in 
the U.S. also store an additional 82 billion metric tons of carbon. 
That amount is more than all other forest types combined. By providing 
a continuing cycle of growing, harvesting, and replanting, sustainable 
forest management optimizes the capacity of private working forests to 
sequester and store carbon and improves their health and resilience.
    Because wood is fifty percent stored carbon by weight, long-lived 
wood products also store vast amounts of carbon. Each year, wood 
products add an additional 100 million metric tons of carbon to the 
nearly 10 billion tons of carbon stored in wood products--that's nearly 
three times the carbon stored in all national parks combined. Advanced 
engineered wood products like mass timber present an enormous 
opportunity to lower the carbon footprint in the built environment.
    Sustainably managed private working forests are more than capable 
of meeting any additional demand for wood in the built environment. 
Each year we harvest about 2% of our working forest land base; we also 
reforest 2% of our working forests land base each year through planting 
or natural regeneration. According to the USDA,\1\ from 1953 to 2011, 
in a time of expanding population and increasing demand for homes, 
paper products, and energy, the total volume of trees grown in the U.S. 
increased by 60%.\2\ Today, private forest owners are growing 43% more 
wood than they remove.\3\
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    \1\ https://www.fs.fed.us/research/publications/gtr/gtr_wo87.pdf.
    \2\ https://www.fs.usda.gov/treesearch/pubs/57903.
    \3\ https://nafoalliance.org/wp-content/uploads/2019/07/
Forest2Market_Inventory_and_Har
vest_Trends_05-24-2019.pdf.
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    In addition to climate mitigation, there are other important 
environmental benefits to keeping working forests working. Water 
supplies for communities around the country come through forested 
watersheds, where forests act as a natural filtration system for nearly 
30% of the water we drink.\4\ Private working forests also play an 
important role in conserving at-risk and declining species. Access to 
these forests is vital to wildlife conservation, as 60% of our nation's 
at-risk species rely on private forestland for survival. Collaborative 
conservation efforts such as the National Alliance of Forest Owners' 
Wildlife Conservation Initiative \5\ can benefit species while keeping 
private working forests intact.
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    \4\ https://www.fs.fed.us/managing-land/private-land.
    \5\ https://nafoalliance.org/issues/wildlife/.
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    I am proud that private working forest owners like Westervelt are 
leading the way in pursuing natural climate solutions. Recently, I 
joined the CEOs of 42 other leading U.S. forest-owning companies, the 
National Alliance of Forest Owners, The Nature Conservancy, the 
Environmental Defense Fund, American Forests, and the American Forest 
Foundation to adopt a unique set of Principles on Private Working 
Forests as a Natural Climate Solution.\6\ These ``CEO Principles'' 
express our common vision for increasing the climate mitigation of 
sustainably managed private working forests and sustainably produced 
solid wood products through market and incentive-based approaches.
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    \6\ https://nafoalliance.org/ceo-principles/.
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    Over the past few years, the National Alliance of Forest Owners has 
worked closely with a broad community of stakeholder organizations to 
advance the climate mitigation benefits of private working forests and 
solid wood products. One of these is the Forest-Climate Working Group, 
which provides a unified voice within the forestry community for 
advancing forest climate policy. NAFO is also a founding member of the 
Food and Agriculture Climate Alliance, which works across the working 
lands community to advance broader climate mitigation solutions. These 
collaborations are helping us find common ground that can pave the way 
for smart, impactful policy.
Forest Carbon Markets
    Strong forest product markets are the economic force behind our 
nation's private working forests and the many public benefits they 
provide. These markets will remain the bedrock of our sector. At the 
same time, new carbon mitigation opportunities are creating options for 
private working forest owners to increase climate benefits. Among 
these, voluntary forest carbon markets are a rapidly growing catalyst 
to scale natural climate solutions while providing important income 
potential for forest landowners. While there are compliance carbon 
markets in places like California, today I will focus on voluntary 
markets.
How they work
    There are three main types of forest carbon projects. Afforestation 
and reforestation involve converting non-forest land to forestland. 
Avoided conversion protects forestland at high risk of being turned 
into other land uses. Improved forest management leverages proven 
forest management techniques to increase carbon sequestration on 
existing forest land.
    Each project type is underpinned by three critical requirements: 
(1) additionality, meaning increased carbon sequestration above a 
baseline; (2) permanence, ensuring the carbon is stored for an 
appropriate duration, often 40, 60 or 100 years; and (3) preventing 
``leakage,'' which occurs when increasing sequestration or storage in 
one location causes a corresponding reduction in sequestration or 
storage in another location.
    Significant investment is required to participate in forest carbon 
markets. A forest owner must establish a carbon baseline for their land 
and then ensure the additional carbon sequestered or stored on their 
land is appropriately measured and verified. Forest owners typically 
use sophisticated models to project the amount of additional carbon 
they can sequester on their land over time to determine how much 
additional carbon they can sell. This process must comply with the 
protocols of one of several available carbon registries for a 
landowner's carbon to be viable in the marketplace. Once that carbon 
enters the marketplace, the landowner must be able to measure and 
verify that they achieve the projected level of sequestration over 
time. The registries track which carbon has been purchased, what 
remains available, and so on. It is a time consuming, complex, and 
expensive process.
The opportunity: Scaling up natural climate solutions in private 
        working forests
    Voluntary carbon markets are a valuable tool for increasing carbon 
sequestration and storage in privately owned working forests. The 
customers for these markets are primarily companies seeking to reduce 
their carbon footprints in a variety of ways, including by investing in 
natural carbon removals, like forest carbon sequestration. Demand for 
carbon sequestration via the voluntary market is growing rapidly, with 
forest carbon experiencing the highest increase in demand. According to 
Ecosystem Marketplace,\7\ the volume of forest credits purchased grew 
over 30% worldwide between 2019 and 2020, and by over 240% between 2020 
and 2021, year to date. Yet, the U.S. occupies a relatively small 
portion of these markets: Asia comprises most of the market, while 
North America, with its significant forest resources, is only beginning 
to emerge. We have a once-in-a-generation opportunity to change that 
dynamic.
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    \7\ https://www.ecosystemmarketplace.com/publications/state-of-the-
voluntary-carbon-markets-2021/.
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The challenge: Increasing participation and confidence in forest carbon 
        markets
    The urgency of climate change and the need to scale natural climate 
solutions is driving unprecedented investor interest in carbon markets 
at a time when those markets are still maturing. The first generation 
of forest carbon projects has taught us much that we can use to improve 
market dynamics and the quality of carbon outcomes. I want to emphasize 
that this first generation has delivered significant carbon value--but 
we can and should take the opportunity to make real improvements for 
even better outcomes for the climate.
    Today, forest carbon markets face two key challenges which we must 
address to harness their potential to deliver scalable carbon 
mitigation: removing barriers to participation and increasing 
confidence in the quality of delivered carbon.
    First, participating as a landowner in carbon markets is a lengthy 
and expensive process. Collecting the data and following the protocols 
to enroll lands in registries costs, at minimum, several hundred 
thousand dollars in addition to the cost of ongoing forest management 
activities for enrolled land. There is also a high degree of 
variability, unpredictability, and complexity in the requirements of 
voluntary and compliance protocols, which adds additional and often 
unnecessary costs and inefficiencies to carbon projects. These 
unintended barriers to entry in forest carbon protocols keep private 
working forest participation too low, leaving a large amount of climate 
mitigation potential untapped.
    Second, concerns among purchasers about the integrity of delivered 
carbon exist because of shortcomings in data and analysis, the design 
of some first-generation projects, and the requirements of existing 
protocols. These concerns will undermine investor confidence and 
sideline significant amounts of capital until they are addressed.
The solution: Improvements to data and protocol design can increase 
        confidence and participation
    These challenges reveal two clear needs: improved data collection, 
analysis, and information transfer, and improved protocol design to 
increase efficiency and reduce cost.
    First, robust carbon data and analysis are the foundation of high-
quality carbon projects and underpin the scalability of forest carbon 
mitigation strategies. We need more and better data. USDA operates the 
Forest Inventory & Analysis (FIA) program, the world's premiere forest 
data collection and reporting system. FIA is used for an increasing 
number of public- and private-sector purposes, including carbon 
projects in voluntary carbon markets. USDA's carbon data collection is 
advanced in the forestry space compared to agricultural lands and soil 
carbon, but across the board, there is room for improvement. We need 
comprehensive, nationwide data that is more useful to end-users.
    To help improve the credibility of forest carbon outcomes, data 
must be accessible, accurate, current, and relevant. This requires an 
ever-improving combination of field data collection, financial 
accountability, technology, and user-driven analysis to increase the 
scope, quality, and usefulness of data. Increased investments in FIA 
will help improve field work and the use of technology to collect and 
analyze forest carbon data. USDA is also well positioned to improve the 
use of technology and reporting methods to make carbon data more 
accessible and more useful for carbon projects and aggregate carbon 
reporting. As the needs and uses of carbon expand, we must expand FIA's 
carbon capability while maintaining existing program delivery that is 
vital to forest management decisions.
    Second, protocols can be improved to be even more reliable, high-
quality, and predictable. Innovation in the voluntary marketplace 
provides a wealth of new ideas and new approaches but can lead to 
inconsistencies or problems in protocols, project design, and project 
execution. We need to bolster confidence among carbon purchasers, 
financial institutions, government, landowners, and other stakeholders 
that voluntary markets have addressed these challenges and are truly, 
and with great consistency, removing additional carbon from the 
atmosphere. This could be addressed in a variety of ways, but it's 
clear that the lack of a common approach to what ``good'' looks like in 
this space is a gap we must fill.
    These challenges are interwoven, and they are well within our 
ability to address. More available data and analysis makes carbon 
markets more accessible and creates confidence in the marketplace. 
Having a common approach to what ``good'' looks like shores up 
stakeholder buy-in and makes investment in carbon markets less risky 
from a landowner perspective. We can improve protocols to make them 
more accessible while maintaining and even improving credibility.
    Congress is already addressing some of these challenges. The 
Growing Climate Solutions Act, recently passed by the Senate, would 
help private forest owners of all sizes deliver carbon mitigation 
benefits at scale. The National Alliance of Forest Owners supports 
working with USDA to address cost and technology barriers to 
participation in forest carbon markets while maintaining the rigor 
needed for high quality carbon outcomes.
Wood Products Markets
    Increased demand for wood in the built environment is another 
significant climate mitigation opportunity that is as important as 
forest carbon markets. Increased market demand for wood utilization 
coupled with increased demand for forest carbon can optimize mitigation 
outcomes.
The opportunity: Reducing the carbon footprint of the built environment 
        through mass timber and other advanced engineered wood products
    The United Nations reports \8\ that 10% of global greenhouse gas 
emissions come from building construction materials. Advanced 
engineered wood products, like mass timber, require significantly less 
energy to produce than alternative building products. Wood used for 
construction also stores significant amounts of carbon (typically 
referred to as ``embedded carbon'') for long periods of time, further 
expanding the mitigation benefit. With the introduction of mass timber 
in the nation's preeminent model building code, wood is now approved as 
a structural material for buildings up to 18 stories tall,\9\ a height 
that encompasses the vast majority of buildings in the U.S.
---------------------------------------------------------------------------
    \8\ https://globalabc.org/sites/default/files/inline-files/
2020%20Buildings%20GSR_FULL%20
REPORT.pdf.
    \9\ https://www.woodworks.org/wp-content/uploads/
wood_solution_paper-TALL-WOOD.pdf.
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The solution: Improving life cycle assessment (LCA) data and analysis 
        and setting the tone for reducing the carbon footprint of the 
        built environment
    Improved data and analysis are fundamental to capturing the carbon 
benefits of increased wood utilization in the built environment. The 
USDA Forest Products Lab is engaged in life cycle assessment research 
on building materials, such as mass timber. Increased funding for such 
research can inform and foster more vigorous marketplace innovation by 
enabling project developers to more easily compare the embodied and 
embedded carbon of mass timber with that of alternative building 
products.
    Federal infrastructure and procurement policies can set the tone 
for private-sector investment by establishing a preference for reduced 
carbon building materials that help transform the built environment 
from an emissions source into an emissions reduction tool. Federal 
policy can also foster marketplace innovation through significantly 
increased investments in the Wood Innovation Grant program, with 
increased emphasis on advanced engineered wood products and technology 
transfer.
Conclusion
    The true scale of our forests' climate impact is hard to fathom. My 
colleagues at the National Alliance of Forest Owners have put together 
a forest carbon data visualization--available at 
ForestCarbonDataViz.org--that uses publicly available EPA and USDA's 
Forest Service data to demonstrate the enormous carbon contributions of 
private working forests and solid wood products.
    In the data visualization, you will see the scale of the 
opportunity for carbon sequestration and storage in U.S. forests. For 
perspective, you may have seen a recent story \10\ heralding the 
opening of the new largest direct-air carbon capture (DCC) plant in the 
world earlier this month. Located in Iceland, the new plant is expected 
to sequester up to 4,000 tons of CO2 per year. For that 
technology to match the annual gross sequestering power of U.S. 
forests, they would need to build almost 400,000 more of those DCC 
plants. We need all the negative-emissions technology we can get, but 
this anecdote underscores how important our forests and forest products 
are to climate mitigation. Forests and forest products are already the 
most powerful carbon-capturing technology on [E]arth.
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    \10\ https://www.axios.com/co2-sequestration-iceland-climeworks-
carbfix-74ac0180-e668-4848-939a-0e55a6b70686.html.
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    The recommendations given today are designed to provide climate 
mitigation solutions that support good paying jobs and economic 
prosperity in rural forested communities across the country. As the 
Committee considers policy options for natural climate solutions, we 
urge Committee Members to recognize the unmatched mitigation benefits 
our forests and forest products are already providing and their 
potential to do even more. Encouraging participation and increasing 
confidence in voluntary carbon markets is key to maximizing our 
forests' ability to deliver the climate solutions our country needs.
    Thank you again for conducting this hearing. The right climate 
solutions can enable private forest owners to invest further in 
sustainable management that enhances forest carbon sequestration and 
storage, water quality, wildlife habitat, and good paying rural jobs. 
The Westervelt Company and the National Alliance of Forest Owners stand 
ready as a resource to this Committee as it addresses the important 
challenge of climate change, and the solutions private working forests 
can offer.

    The Chairman. Thank you very much, Mr. Luoma, for your 
excellent testimony.
    And now, I recognize Mr. Antonioli, please. You are 
recognized for 5 minutes. Pardon me if I didn't get all the 
syllables in your name correct.

 STATEMENT OF DAVID ANTONIOLI, CHIEF EXECUTIVE OFFICER, VERRA, 
                        WASHINGTON, D.C.

    Mr. Antonioli. That is okay. Chairman Scott, Ranking Member 
Thompson, distinguished Members, my name is David Antonioli. I 
am the Chief Executive Officer of Verra, a nonprofit 
organization based in Washington, D.C. Thank you for the 
invitation to speak at today's hearing.
    Verra manages the world's leading greenhouse or carbon 
crediting program, the Verified Carbon Standard, or VCS 
Program. Since 2007, we have issued 760 million credits from 
over 1,700 projects worldwide, including 28 million credits 
from over 80 projects in the United States.
    Today, I share three messages. First, how carbon crediting 
programs operate; second, how voluntary carbon markets are 
evolving at home and abroad; third, how participating in 
voluntary carbon markets can benefit the American agriculture 
and forestry sectors.
    Let me begin with how our program works. A project 
proponent, such as a farmer or forest owner, proposes an 
activity to reduce or remove greenhouse gases from the 
atmosphere. For example, shifting to cover cropping or planting 
trees. They prepare a document describing their activity, how 
it meets all of the relevant VCS program requirements, and 
demonstrate how the activity will cut emissions beyond what 
they would have been in the absence of the project. The 
document is posted for public comment, and is assessed by 
independent auditors whose work we oversee. Verra conducts a 
final assessment and formally registers the project if find 
that the project meets all of our requirements. The proponent 
must then implement their project, monitor emissions over time, 
and calculate its emissions impacts. Once again, they provide 
documents for assessment by independent auditors and then by 
us. Assuming we find the emission reductions meet all of our 
requirements, we then issue carbon credits, one carbon credit 
per ton of carbon dioxide equivalent that was reduced or 
removed.
    Credits can be used for various purposes. Most commonly, 
corporations use them to voluntarily compensate for their 
emissions and declare this in their annual or sustainability 
reports. Once used, a carbon credit is removed from the market 
and cannot be used by anyone else.
    High integrity carbon crediting programs possess several 
attributes to ensure the integrity of the credits they issue. 
First, they rely on scientifically sound methodologies or 
protocols to quantify the emission reductions. Currently, Verra 
has approved six methodologies in the agricultural sector, and 
14 in the forestry sector.
    Second, they rely on independent auditing. Expert 
independent auditors assess projects and credits at all stages 
against the requirements of the relevant carbon crediting 
program. For their part, carbon crediting programs need to 
ensure that the auditors working under their programs are 
trained and accredited properly.
    And third, they rely on a publicly accessible registry. 
Credits are uniquely identified, linked to project records, and 
tracked to prohibit double counting.
    My second message is that voluntary markets are evolving 
globally. To address the climate emergency, nearly 27 billion 
tons of emission equivalents worldwide must be reduced or 
removed. Voluntary carbon markets, which could generate 2 to 3 
billion tons of this annual reduction, remain a small but 
important part of the solution, especially because they have 
the infrastructure and capacity to scale up quickly.
    This growth has already begun. Demand is escalating 
rapidly, fueled primarily by corporations seeking to fulfill 
net-zero or zero emissions pledges, including major American 
and international corporations. When demand grows, supply grows 
too. Verra issued 141 million credits last year, and we 
anticipate that doubling this year.
    This takes me to my third and final message. Participating 
in voluntary carbon markets can benefit the American 
agriculture and forestry sectors, and I say this for a few 
reasons. The first is that nature-based solutions can reduce 
emissions in the near-term, versus technological solutions that 
are still very expensive and will require time to scale up. The 
second is that nature-based solutions deliver many beyond 
carbon benefits. They improve water quality, they prevent 
erosion, and they protect biodiversity. The third is that 
finance from carbon credits can lead to important innovations, 
such as supporting the transition to regenerative agriculture, 
and the ongoing development of science and technology to 
measure soil carbon. Fourth and finally, high integrity carbon 
crediting programs provide American farmers and forest owners 
the ability to secure finances that will help them implement 
farming and forest management practices that benefit both them 
and the climate.
    Thank you very much for the opportunity. I look forward to 
your questions.
    [The prepared statement of Mr. Antonioli follows:]

Prepared Statement of David Antonioli, Chief Executive Officer, Verra, 
                            Washington, D.C.
    Chairman Scott, Ranking Member Thompson, and distinguished Members 
of the Committee:

    Thank you for the opportunity to provide testimony for the hearing 
``Voluntary Carbon Markets in Agriculture and Forestry''.
    My name is David Antonioli, and I am the Chief Executive Officer of 
Verra, a nonprofit corporation under the laws of the District of 
Columbia and a tax-exempt organization under Section 501(c)(3) of the 
U.S. Internal Revenue Code.
    Founded in 2007, Verra certifies the impacts of environmental and 
social activities. We manage the world's largest voluntary carbon 
crediting program: the Verified Carbon Standard (VCS) Program.
    To date, the VCS Program has issued 760 million carbon credits from 
1,733 projects in over 80 countries. This includes 28.1 million carbon 
credits from 93 projects in the United States of America. Each of these 
carbon credits represents 1 tonne of greenhouse gas that has been 
reduced or removed from the atmosphere.
    In providing this testimony, I aim to convey three messages. The 
first is to explain how high-integrity carbon crediting programs 
operate. The second is to outline how voluntary carbon markets are 
evolving in the United States and globally. The third is to identify 
specifically how participation in voluntary carbon markets can benefit 
the American agriculture and forestry sectors.
1. High-integrity carbon crediting programs
    A high-integrity carbon crediting program, such as the VCS Program, 
involves multiple processes aimed at ensuring that the carbon credits 
it creates represent real emission reductions or removals. In this 
testimony I focus on two of these processes.
    The first is registration. In this process, one or more entities 
propose the implementation of an activity, known as a ``project'', to 
reduce or remove emissions from the atmosphere. These project 
proponents must describe what this project will undertake, and this 
project can be in almost any sector of the economy and involve almost 
any type of activity--for example, planting trees or changing an 
agricultural practice. They must also identify what emissions would be 
in the absence of this project--in other words, the baseline level of 
emissions under a business-as-usual scenario. Finally, they must 
calculate the projected difference between the baseline emissions and 
the estimated emissions.
    The project proponents must submit a document setting out how the 
project meets the VCS Program requirements to an accredited, 
independent auditor, who scrutinizes the document to ensure that the 
project meets all program rules, which are developed with extensive 
scientific input and thorough public consultations. If the auditor 
approves, Verra then conducts an additional review and, if Verra also 
approves, the project can be formally registered.
    All that said, registration alone is insufficient to create carbon 
credits. To create carbon credits, a second process, known as issuance, 
must be completed.
    In the issuance process, and provided that the project has been 
successfully registered, the project proponents must actually implement 
their project: they must plant the trees, or they must change the 
agricultural practice that they committed to. The project proponents 
must also measure the emissions that they are reducing or removing as a 
result of their project activities.
    Once again, the project proponents must submit their findings, in 
the form of a monitoring report, to an accredited, independent auditor, 
who scrutinizes the report to ensure that the project, again, meets all 
rules of the VCS Program. If the auditor approves, Verra then conducts 
an additional review and, if Verra also approves, Verra will create, or 
``issue'', carbon credits corresponding to these emissions reductions 
and removals.
Graphic 1: Project cycle


    Upon issuance, carbon credits have many possible uses. The most 
common use of carbon credits issued by the VCS Program (``Verified 
Carbon Units'' or ``VCUs'') is the retirement of these units by 
corporations that wish to compensate for their corporate emissions 
(e.g., for travel, or for electricity consumption that cannot be 
provided by renewables) voluntarily and report this compensation in 
their annual and/or sustainability reports. VCUs can also be retired to 
satisfy compliance obligations in jurisdictions where they are 
accepted. Retiring a carbon credit means it is removed from the market 
and cannot be used anymore by anyone other than the retiring entity.
    I describe the above processes because I wish to clarify the 
attributes that we believe are crucial in ensuring the high integrity 
of carbon credits. These include:

   Accounting Methodologies: Projects and carbon credits must 
        be assessed using a technically sound methodology to accurately 
        quantify emission reductions and removals.

     In the agriculture sector, Verra has approved six (6) 
            methodologies that quantify changes in soil organic carbon 
            stocks and nitrous oxide and methane emissions. Management 
            practices covered by these methodologies include improved 
            cropland and grassland management such as reduced tillage, 
            cover cropping, and rotational grazing. Our most recent 
            methodology covers most of these practices and was 
            developed with the support of U.S. company Indigo Ag. We 
            also recently approved an accounting methodology that 
            quantifies reductions in methane emissions through the use 
            of a food additive that helps inhibit the microbes in a 
            cow's stomach.

     In the forestry sector, Verra has approved fourteen 
            (14) methodologies that span improved forest management, 
            conservation, reforestation, and avoided deforestation. We 
            are working with various U.S. public and private entities 
            on a new methodology that uses fuel treatments (thinning, 
            prescribed fire, and managed natural fire) to reduce the 
            risk of large-scale stand-replacing wildfires, and increase 
            forest resiliency to withstand increased threats.

   Independent Auditing: Carbon credits must come from projects 
        that have been assessed by qualified independent third parties, 
        with a second check applied by the crediting program, to ensure 
        that standards are met and that methodologies are correctly 
        applied. This takes place initially at project registration and 
        then upon every instance of credit issuance. Verra works with 
        the ANSI National Accreditation Board (ANAB) to accredit U.S. 
        and internationally-based auditors. We currently have six 
        auditors accredited for the VCS Program based in the United 
        States and have accredited a total of 27 auditors around the 
        world. This accreditation is done against International 
        Organization for Standardization (ISO) standards for 
        accreditation for GHG auditing organizations to ISO 14065 We 
        work with national auditing bodies such as the Standards 
        Council of Canada, the Mexican Accreditation Entity EMA, and 
        other anchor partners in Colombia and South Africa, which will 
        soon be complemented with partners in Europe, Asia and South 
        Asia.

   Registry: Registrations and issuances must be tracked to 
        ensure transparency and to prohibit the double-counting of 
        carbon credits. Verra operates a registry, which records 
        projects at all stages of the registration process, records 
        every carbon credit that has been issued, and records how these 
        carbon credits are transferred and ultimately used (i.e., 
        retired). To obtain an account in the Verra registry, we apply 
        robust Know Your Customer checks.
Graphic 2: Components of the VCS Program


    In short, carbon credits issued by Verra under the VCS Program 
follow a rigorous assessment process to be certified. They originate 
from projects in various sectors, with agriculture and forestry being 
the largest. Crucially, they must adhere to transparent and robust 
methodological standards, be independently audited, and be tracked in a 
publicly accessible, secure registry.
2. Evolution of voluntary carbon markets
    Before outlining how voluntary carbon markets are evolving in the 
United States and globally, I wish to express a critical reminder.
    The world is facing a climate emergency. Under our current 
emissions trajectory, global temperatures are expected to rise to 2.7 
Celsius above pre-industrial levels by the end of the century, with 
devastating consequences including rising sea levels, devastating 
floods caused by severe rainfall, and destructive wildfires fueled by 
extended periods of drought, all of which put communities at risk, 
including here in the United States. To avert this calamity, we must do 
all that we can to limit the temperature increase to 1.5 Celsius above 
pre-industrial levels.
    In practice, this means cutting global emissions by \1/2\ by 2030, 
and then eliminating remaining global emissions to zero by 2050. In 
numerical terms, that means cutting over 27 billion tons of carbon 
dioxide, or its equivalent in other greenhouse gases, in the next 9 
years.
    To date, the quantity of emissions that have been reduced or 
removed through voluntary carbon markets is a small portion of that 
amount. Yet voluntary carbon markets provide built-out, ready-made 
infrastructure for identifying opportunities to cut emissions and to 
quantify the impacts of these opportunities. It can be scaled up 
rapidly to meet the demand that has finally arrived. For this reason, 
it is widely argued that voluntary carbon markets must scale up rapidly 
over the coming decade. The Taskforce on Scaling Voluntary Carbon 
Markets (TSVCM), led by United Nations Special Envoy on Climate Action 
and Finance Mark Carney, who is also the former Governor of the Banks 
of Canada and England, argues that voluntary carbon markets must be 
scaled up fifteen-fold by 2030.
    At Verra, we are seeing this growth already starting to take place. 
Corporations around the world are increasingly recognizing the 
importance of cutting their emissions. Many are reducing their carbon 
footprints through energy efficiency, purchasing of renewable energy 
and other measures. Quite often, however, these entities cannot meet 
their targets or eliminate their carbon footprints altogether, at least 
in the near term, with internal reductions alone. They need a flexible 
mechanism to achieve these aspirational goals. By using voluntary 
carbon markets, corporations can complement internal reductions and 
neutralize or offset their emissions by retiring carbon credits 
generated by projects that reduce emissions elsewhere.
    Today's voluntary carbon market is a robust and effective means to 
tackle climate change with the international validation provided by 
international certification bodies like Verra, strong corporate 
awareness, and market growth. Leading scientists, private 
practitioners, community members, landowners, and decision-makers from 
all corners of the world have engaged in voluntary carbon markets, 
mainstreaming this increasingly robust and accepted tool for driving 
finance to reducing emissions.
    As an example of this mainstreaming, consider that the 
infrastructure provided by voluntary carbon markets is increasingly 
being used to support jurisdictional efforts to address climate change. 
Taxes established in Colombia in 2016 and South Africa in 2020 permit 
the use of high-integrity carbon credits, such as those issued by 
Verra's VCS Program, to meet compliance obligations. Specifically, 
companies in those countries can retire eligible carbon credits (such 
as VCUs) instead of paying the carbon tax. The International Civil 
Aviation Organization (ICAO) established the Carbon Offsetting and 
Reduction Scheme for International Aviation (CORSIA), a global market-
based mechanism in which airlines and other aircraft operators will 
offset any growth in their CO2 emissions above 2020 levels 
with the use of carbon credits generated by organizations like Verra
    Governments have also supported the use of voluntary carbon markets 
as a means to help companies achieve ambitious non-regulatory climate 
targets while also helping to drive finance towards climate action. For 
example, Australia manages the National Carbon Offset Standard (NCOS) 
which sets minimum requirements for calculating, auditing and 
offsetting the carbon footprint of an organization or product to 
achieve 'carbon neutrality', and provides guidance on what is a 
genuine, additional voluntary carbon credit.
    I express the above viewpoints to illustrate that the voluntary 
carbon market is evolving rapidly, is entering the mainstream, and is 
emerging as the instrument of choice for helping corporations and 
increasingly governments around the world to address greenhouse gas 
emissions.
3. Benefits for American agriculture and forestry sectors
    From Verra's perspective, there is a significant opportunity for 
scaling up the supply of carbon credits from the American agriculture 
and forestry sectors in order to meet corporate demand, both at home 
and abroad. We base this statement on the following observations.
    The first is that nature-based solutions, such as agriculture and 
forestry, represent a unique opportunity to reduce emissions in the 
near term. Technological solutions such as carbon capture and use or 
sequestration (CCUS), or direct air capture (DAC), hold significant 
promise, and at Verra we are directing considerable time and effort to 
facilitating their growth. However, the reality is that these solutions 
are currently very expensive to operate, and they will take 
considerable time to scale up.
    The second is that nature-based solutions provide multiple other 
benefits. To begin, they can provide additional income to those on the 
front-lines of climate action, such as farmers and forest owners who 
can use the voluntary carbon market to help them cover the costs 
associated with new practices. In addition, nature-based solutions can 
improve water quality, prevent erosion, and strengthen biodiversity. 
These additional benefits are increasingly quantified and verified, and 
they can help meet environmental justice and other local priorities.
    The third is that there is considerable scope for innovation in 
agriculture and forestry. For example, Verra recently launched a public 
comment period for a methodology being developed to quantify emissions 
reductions and removals via biochar in soils as well as non-
agricultural applications like asphalt and cement. Verra is also in 
conversations with agricultural technology companies about supporting 
the use of innovative fungal inoculants and other probiotics to reduce 
synthetic fertilizer needs, thereby reducing nitrous oxide 
(N2O) emissions, another potent greenhouse gas. The 
voluntary carbon market provides a mechanism for driving private 
finance to climate action projects that would otherwise not get off the 
ground due to cost or technological limitations.
    The fourth is that the voluntary carbon market provides a route-to-
market for American farmers and forest owners. Given the scaling of 
global demand, the time is ripe to facilitate their access to ready-
made infrastructure to reward them for cutting emissions and to enable 
them to sell these credits to markets at home and abroad, and high-
integrity carbon crediting programs such as Verra's VCS Program can 
help to provide this opportunity.
    Thank you for your consideration of my testimony, and I look 
forward to your questions.

    The Chairman. Thank you very much for your excellent 
testimony.
    And now, Ms. Eideberg, please begin when you are ready for 
your 5 minutes. Thank you.

         STATEMENT OF CALLIE EIDEBERG, J.D., DIRECTOR, 
 GOVERNMENT RELATIONS, ENVIRONMENTAL DEFENSE FUND, WASHINGTON, 
                              D.C.

    Ms. Eideberg. Thank you, Mr. Chairman, and thank you, 
Ranking Member Thompson, and all of the Members of this 
Committee for the opportunity and the invitation to participate 
in today's hearing.
    The topic of voluntary carbon markets is extremely timely, 
and it is of significant importance to farmers in all of our 
shared environment. I am here to represent the Environmental 
Defense Fund, an international nonprofit organization that 
creates transformational solutions to the most serious 
environmental problems. We link science, economics, law, and 
innovative private-sector partnerships to accomplish this goal.
    At EDF, we collaborate with farmers, farm organizations, 
and businesses throughout the supply chain to ensure a climate 
resilient and profitable future for U.S. agriculture. Our 
Farmer Advisory Board is made up of large-scale conventional 
farmers from many of the districts represented in this room, 
and that Farmer Advisory Board is instrumental in shaping our 
agricultural policy and our research priorities.
    EDF has also helped to found the Food and Agriculture 
Climate Alliance, along with some of the leading agricultural 
and commodity groups. We want to build support for climate 
solutions and innovative approaches, including voluntary carbon 
markets, and we want to build them across party lines.
    These voluntary markets, although currently in their 
infancy, have the potential to reward producers for management 
practices that reduce greenhouse gas emissions while also 
improving the resilience of farmers and our rural communities.
    I have included a number of EDF's policy recommendations 
that can maximize this potential in my written testimony, but 
in my comments today, I will emphasize three important 
considerations for this Committee that will foster efficient 
and effective voluntary markets.
    First of all, there are a number of ways that working lands 
can contribute to and profit from climate solutions. While 
storing carbon in soil is one of those options, it is also one 
of the more difficult ways to reduce emissions, and we still 
have a lot to learn about its true potential. Therefore, 
policies and incentives should prioritize practices that are 
now shovel ready and enjoy high confidence in terms of 
greenhouse gas reductions. These would include avoided 
emissions, avoiding emissions of methane and nitrous oxide 
specifically.
    Second, because the science and data on soil sequestration 
is not yet fully mature, voluntary markets should remain the 
focus of policy makers, and I stress the word voluntary. Until 
we have a higher level of confidence in environmental outcomes, 
carbon credits should not be allowed to satisfy current or 
future compliance obligations, either for companies or for 
farmers.
    And third, the private-sector is already engaging in the 
voluntary greenhouse gas marketplace, and farmers are already 
being paid for their environmental outcomes. However, our 
approaches to accounting for these environmental benefits are 
all over the map. There is no referee on the playing field to 
ensure consistency in the measurement, the reporting, or the 
verification of those emissions reductions. So, without better 
standards or any type of standardization, we may very well see 
these markets fail.
    So now, I appreciate the Committee having this hearing. Now 
is precisely the time for Congress to step in, provide some 
direction, and provide some guidance. America's working lands 
can be an important climate solution provider by reducing 
emissions and building resilience to climate impacts that we 
are already seeing on the land. Voluntary markets have the 
potential to increase investment in these solutions and deliver 
durable benefits for the climate and for farmers and ranchers 
and foresters. To help realize that potential, Congress and 
USDA should promote equitable access to financial incentives, 
technical assistance, and to research that will help accelerate 
and reward agriculture and forestry's climate contributions.
    EDF looks forward to working with this Committee to tackle 
these issues, and I appreciate having this conversation with 
you all today. Thank you.
    [The prepared statement of Ms. Eideberg follows:]

   Prepared Statement of Callie Eideberg, J.D., Director, Government 
        Relations, Environmental Defense Fund, Washington, D.C.
    Thank you, Chairman Scott, Ranking Member Thompson, and all the 
Members of this Committee for the opportunity to provide testimony 
about the role of agriculture in voluntary carbon markets. I am honored 
to share Environmental Defense Fund's perspective.
    EDF is a leading international nonprofit organization that creates 
transformational solutions to the most serious environmental problems 
by linking science, economics, law and innovative private-sector 
partnerships. With more than 2.5 million members and a global staff of 
750 scientists, economists, policy experts and other professionals, 
we're one of the world's largest environmental organizations.
    At EDF, we are also proud to collaborate with farmers, farmer 
organizations, land-grant universities and businesses throughout the 
supply chain to ensure a climate-resilient and profitable future for 
U.S. agriculture. EDF's farmer advisory board is instrumental in 
shaping our agricultural policy and research priorities, and EDF helped 
found the Food and Agriculture Climate Alliance, along with leading 
agricultural and commodity groups, to build support for agricultural 
climate solutions and innovative approaches like voluntary carbon 
markets.
    As the Director of Government Relations, I advocate for policies 
that reduce the climate impact of farming and agricultural production, 
while simultaneously maintaining or improving farmer profitability. 
This is a tough path to carve, but it can, and must, be done.
    Farmers, foresters and landowners are squarely at the intersection 
of climate adaptation and mitigation. Domestic farming operations 
contribute approximately 10% to overall U.S. greenhouse gas emissions 
and are also at high risk from climate-induced stressors such as heat, 
drought and pests.
    Voluntary carbon markets, although currently in their infancy, have 
the potential to reward producers for practices that can reduce 
greenhouse gas emissions and may sequester carbon in soil, plants and 
trees, while also improving the resilience of farmsand rural 
communities.
    However, the U.S. voluntary carbon market currently involves 
multiple carbon registries and protocols for different types of 
emissions reduction and carbon removal practices, with variable 
measurement and accounting approaches. For some newer credits, such as 
soil carbon credits, we need standards for consistent, transparent 
measurement and accounting. Otherwise, farmers, other credit developers 
and purchasers risk investing in poorly quantified and potentially 
reversible climate benefits.
    As our understanding of long-term sequestration potential evolves, 
the U.S. Department of Agriculture and Congress should support efforts 
to secure emissions reductions through increased efficiency in on-farm 
operations, fertilizer management and methane management. Developing 
these elements of the carbon market now will provide more time to 
develop high-quality credits through soil carbon sequestration.
    EDF recommends a number of policy principles to help build a high-
quality carbon market that compensates farmers for putting America's 
working lands to work for climate action broadly, equitably and with 
strong integrity.
    This testimony will focus on four areas of policy that Congress 
should consider when developing voluntary carbon markets for working 
lands: quality framework and assessment of protocols; research and 
incentives; benefits for early adopters; and technical assistance.
1. Quality framework and assessment of protocols
    The voluntary market for greenhouse gas emissions reductions or net 
carbon sequestered in the agriculture and forestry sector is growing 
rapidly with a wide range of differing crediting standards. Congress 
can help provide clarity by establishing a framework for quality 
assurance. This framework would not prescribe the use of specific 
protocols but would instead set quality objectives to ensure that the 
voluntary credits assessed across different climate registries are 
comparable and equivalent.
    EDF recently published a report comparing existing protocols used 
to generate credits for soil carbon sequestration and found that the 
protocols differ in the treatment of additionality, uncertainty, 
permanence and reversal, leading to inconsistency of credit 
quantification. This variation causes uncertainty for farmers 
generating credits and for buyers purchasing credits, and makes it 
difficult to determine if credits are truly delivering net climate 
benefits.
    The inconsistency undermines confidence in and the credibility of 
voluntary agricultural carbon markets. A protocol assessment by USDA or 
a neutral third party would reduce risks across markets and could 
assist with moving from isolated projects to a scale that can address 
reversal, additionality and permanence and make a real contribution to 
the climate effort.
    One possibility would be for USDA to establish an advisory group to 
define criteria for greenhouse gas quantification; monitoring, 
reporting and verification, or MRV; and social impact guardrails. The 
advisory group deliberations would be transparent and published on the 
USDA website and membership would be drawn from USDA, civil society and 
carbon market experts. EDF, along with partners World Wildlife Fund and 
Oko-Institut, authored a report that identified six ``quality 
objectives'' for carbon credits and established specific criteria that 
can be used to evaluate credits against each of these quality 
objectives. This could be a starting point for the advisory process.
    Once criteria are agreed upon, USDA would publish the criteria and 
use them to assess, score and certify registries' methodologies and 
categorize credits in accordance with their level of scientific 
certainty. USDA would publish the evaluation of protocols, driving all 
protocols to adhere to the quality criteria set by USDA.
2. Research and incentives
    Congress should direct USDA to prioritize scientific and economic 
research about voluntary markets and the agricultural practices that 
are most likely to provide a return on investment and reduce emissions. 
This practice-based research should increase the use of climate-smart 
practices on farms, while also improving the rigor and transparency of 
climate models and measurements to support the efforts of voluntary 
carbon markets.
    Connecting the extensive agricultural research community to USDA's 
vast agricultural datasets is a critical strategy to quickly and 
efficiently answer key research questions about the multiple benefits 
of climate-smart agricultural practices. USDA should engage trusted 
research partners to advance USDA research priorities by developing and 
testing tools for farmers and university researchers to access and 
standardize anonymized USDA datasets.
    The scale and scope of the agricultural research investments needed 
to prepare farmers for climate impacts and adaptation can be 
accomplished through partnerships with land-grant universities, 
commodity groups and other trusted partners. Researchers and 
corporations should be encouraged to share their data within this 
anonymized data framework. USDA should also establish and maintain 
shared public research data repositories to allow all users to benefit 
equally from data that improves ecosystem quantification methodologies, 
such as process models.
    Creating channels to clearly communicate how producer data is being 
used, allowing producers to opt in or out of research projects, and 
communicating the results of research that producers opted in to can 
build farmer and ranchers' trust that their data is being used 
responsibly and effectively to generate knowledge that will ultimately 
benefit their operations.
    USDA should expand knowledge of regional climate impacts and 
climate-smart agricultural practices and invest in researching new 
practices to engage the full diversity of U.S. farmers, ranchers and 
production systems in conservation and climate solutions.
    There is a strong body of existing knowledge about the long-term 
financial and environmental benefits of common conservation practices, 
such as cover cropping and no till, in major row cropping systems that 
can be used to expand adoption of those practices today. However, 
research should also develop new strategies and practices, particularly 
for other crops, animal operations and smaller operations with 
different economic constraints. This includes developing additional 
tools to measure and manage the major sources of emissions from 
livestock and nitrogen application, and to harness bioenergy from 
crops, food processing, livestock waste management and on-farm energy 
use.
3. Benefits for early adopters
    Congress should carefully consider how best to incorporate the 
successful practices of early adopters. Federal policy should recognize 
and reward early adopters' efforts, ensure additionality, and protect 
against the risk of practice reversal as producers aim to set their 
baseline.
    As part of EDF's work with the Food and Agriculture Climate 
Alliance, we recommended that early adopters be eligible for a one-time 
bonus payment contingent upon participation in a new or existing 
conservation program. This one-time payment would motivate producers 
who have already adopted conservation practices to maintain or increase 
enrollment in voluntary conservation programs to ensure continued 
sequestration efforts and promote additionality. This would also assist 
producers in the transition from participating in practice-based 
programs to outcomes-based programs.
4. Technical assistance
    USDA and Congress should prioritize and skillfully implement 
technical assistance to enable equitable access to voluntary markets 
for all potential participants and to help farmers and ranchers plan 
their climate mitigation and adaptation efforts. Technical assistance 
from trusted partners and on-the-ground support is critical to help 
farmers and ranchers overcome knowledge and administrative barriers 
that impede the adoption of climate-smart practices.
    Recommendations for technical assistance include data collection 
and dissemination, increased investments in conservation programs and 
ensuring equitable access for all participants.

   Collecting and publishing market data. In coordination with 
        the Environmental Protection Agency and State Department, USDA 
        should report yearly on the status of voluntary carbon markets, 
        including where voluntary reductions credits are being used in 
        compliance markets, such as California's Air Resource Board 
        Emissions Trading Program. Reporting should be similar to 
        USDA's published commodity reports.

   Collecting and analyzing data on landscape levels. Data 
        collection and analysis at landscape scales would reduce the 
        risks associated with additionality, permanence and leakage, 
        while also decreasing measurement, reporting and verification 
        costs. For example, USDA Agricultural Statistical Districts 
        could be used to aggregate climate contributions from farms 
        with similar soil and climate types, allowing for USDA or 
        another entity to conduct landscape-scale monitoring of both 
        areas with carbon sequestration projects and areas without 
        projects. This monitoring, analogous to the jurisdictional 
        approaches proposed for high-quality REDD+ tropical forest 
        carbon credits or for national emissions inventories, would 
        facilitate full carbon accounting, reducing issues associated 
        with additionality, permanence and leakage and reducing the 
        potential for double-counting. USDA could similarly categorize, 
        research and update potential credits from crops, livestock and 
        forestry as more is learned.

   Ensuring equitable access to markets. USDA should engage 
        with socially disadvantaged farmers, including organizations 
        representing Black farmers and small-scale farmers, directly to 
        hear what their producers need to be successful and to have 
        equitable access to USDA conservation programs and voluntary 
        carbon markets. This should occur very early in USDA's 
        engagement with private, voluntary carbon markets. Based on 
        this engagement, USDA may choose to treat socially 
        disadvantaged farmers differently than other categories of 
        farmers to promote equitable outcomes. Large farming 
        operations, for example, have different economies of scale, 
        face lower prices for inputs, have better access to finance and 
        can more easily engage in climate-smart activities relative to 
        many smaller farm operations. USDA policy that accounts for 
        these differences and applies appropriate administrative 
        processes and incentives based on farm size should help smaller 
        farms and historically underrepresented producers participate 
        in voluntary markets.

   Ensuring environmental injustices are addressed. As the 
        agricultural sector works to reduce greenhouse gas emissions 
        from livestock production, it must also engage with 
        environmental justice communities and remedy localized harms 
        such as dust, odor and spray from manure lagoons reaching 
        nearby resident's homes, community buildings and schools. USDA 
        must prioritize the most vulnerable communities and coordinate 
        efforts to ensure local impacts from farming, such as harmful 
        air and water quality and the associated public health risks, 
        are remediated. USDA should work with the private-sector to 
        research, develop and bring new technologies to scale that can 
        address these externalities alongside emission reductions.

   Increase conservation program investments. Congress should 
        set aside significant funding from mandatory farm bill 
        conservation programs and fund a technical assistance 
        initiative focused on increasing climate resilience and 
        reducing net greenhouse emissions. Funds could be used to 
        recruit and train additional technical assistance providers and 
        staff who would provide the on-the-ground support needed to 
        implement soil health and climate stewardship practices.

    Agriculture and forestry are essential to climate solutions, 
including cutting greenhouse gas emissions, storing carbon and building 
resilience to climate-fueled impacts like droughts and floods. 
Voluntary carbon markets have the potential to increase investment in 
these climate solutions and deliver durable benefits for the climate, 
farmers, ranchers and foresters.
    To fully tap into that potential, Congress and USDA must promote 
equitable access to the financial incentives, technical assistance and 
research advancements that will help accelerate, and reward, 
agriculture and forestry's climate contributions.

    The Chairman. Thank you very much, Ms. Eideberg, for your 
excellent testimony.
    And now, Mr. Milligan, we will turn to you. Please begin 
when you are ready.

STATEMENT OF DAVID MILLIGAN, PRESIDENT, NATIONAL ASSOCIATION OF 
                WHEAT GROWERS, WASHINGTON, D.C.

    Mr. Milligan. Chairman Scott, Ranking Member Thompson, and 
Members of the Committee, thank you for the opportunity to 
testify today. I am David Milligan, President of the National 
Association of Wheat Growers. I raise wheat, corn, soybeans, 
and dry edible beans with my son on our farm in Cass City, 
Michigan.
    On our farm, wheat planting time is from September to 
October. We are harvesting dry edible beans followed by seeding 
wheat with over one million seeds per acre. Soon, the ground 
will be covered with growing wheat with active roots, providing 
a cover all winter. We will harvest the wheat in July. That can 
be followed by a cover crop like clover, or perhaps a double 
crop of soybeans in areas with longer growing seasons.
    Wheat is produced in 42 states, from Washington State to 
Pennsylvania, and from Montana to Texas. Each area has a 
different climate, soil, rotations, and planting dates for 
spring and winter wheat. The typical rainfall in wheat 
production regions can range dramatically from 6" to 35". In 
certain regions, winter wheat can be added to a corn-soy 
rotation. By adding wheat to this rotation, we can add 
additional benefits such as reducing weed pressure, decreasing 
disease, and providing a cover. Any carbon market has to take 
this rotation into consideration. Additionally, there are some 
geographical regions in the United States where wheat is the 
only major food commodity that can be grown.
    Wheat growers need additional technical assistance to be 
able to balance the economics of their operation with the 
uncertainty of undertaking different management systems as the 
concept of carbon markets come to develop. The drier, arid 
regions where growing spring wheat have limited the use of 
cover crops due to the lack of moisture. They are using carbon-
saving practice like residue, no-till, and reduced-till to 
conserve moisture for the wheat crop.
    Many producers already practice excellent environmental 
stewardship that sequesters carbon and should be treated 
equally with new adopters under new carbon markets. Excluding 
early adapters does not take into consideration the long-term 
management and ongoing investments in environmental benefits to 
maintaining conservation systems, such as no-till.
    Wheat producers have a high rate of adoption of reduced 
tillage, with 67 percent of wheat growers adopting conservation 
tillage. Carbon markets should not discourage production of 
wheat for harvest. In production agriculture, we talk a great 
deal about value-added products. The grain that we grow in the 
field goes on to a different product where processing and 
packaging add value along the supply chain. That $3 loaf of 
bread includes just pennies paid to the farmer for their wheat. 
The carbon credit will be generated on the farm. The farmer 
needs to have an equitable return as the carbon credits 
increase in value.
    As the Committee continues to review these issues, the 
voluntary carbon markets should be in addition to and not 
replace USDA programs. USDA conservation programs, funding for 
wheat research, new varieties, and new technology will be 
necessary. Research is essential to increasing our productivity 
and continuing to produce more using less resources. Many of 
the management systems will not be possible without access to a 
variety of crop production tools. Conservation tillage, 
protecting the growing crops, and allowing us to be the most 
efficient with the land production requires crop production 
tools.
    NAWG members are cautiously optimistic about voluntary 
carbon efforts. We see the potential to have both increasing 
positive environmental impact and additional revenue stream. 
However, there is still uncertainty regarding diverse rotations 
and different crops in the field throughout the year, and the 
impact on some practices of crop production and quality. An 
added complexity of winter wheat production is a unique system 
of planting in the fall, providing a root system over the 
winter, with harvest in the summer.
    I want to thank the Chairman, the Ranking Member, and 
Members of the Committee for inviting me to testify today on 
this important topic. Wheat growers continue to have questions 
about the transparency and clarity of requirements, costs, 
measurement, and carbon pricing for the numerous voluntary 
carbon efforts before our growers today.
    Thank you, and I look forward to taking your questions.
    [The prepared statement of Mr. Milligan follows:]

 Prepared Statement of David Milligan, President, National Association 
                   of Wheat Growers, Washington, D.C.
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for the opportunity to testify today. I am David 
Milligan, President of the National Association of Wheat Growers. I 
raise wheat, corn, soybeans, and dry edible beans with my son on our 
farm in Cass City Michigan. Thank you for holding this hearing today to 
discuss voluntary carbon markets in agriculture and forestry. NAWG is 
very interested in engaging in the policy discussions, market 
development and as individual grower members--understanding the details 
and weighing the options for participation in voluntary carbon 
programs, protocols, and markets.
    The National Association of Wheat Growers represents state wheat 
grower associations and grower members in 20 states. The wheat 
production in each of those states is varied, from the climate, soil, 
rotations and most importantly the type of wheat and end-use markets 
for the wheat produced. As a crop that is primarily destined for the 
food supply the quantity and quality of the wheat we produce is equally 
important. It is important to point out that there are six different 
classes of wheat. The six classes of wheat have a variety of end uses--
whether it is pizza, pasta, bread, cakes, or crackers--each product has 
characteristics that rely on a different type of wheat and a different 
protein content in the wheat and flour. Some wheat--winter wheat--is 
planted in the fall and harvested in the following summer and some--
spring wheat--is planted in the spring and harvested a few months later 
in the summer.
    There are several benefits of growing wheat. Wheat improves soil 
quality, protects the soil from erosion and reduces weed pressure when 
added to a crop rotation. Winter wheat provides living plant cover over 
the winter months. The wheat straw residue left on the field provides a 
durable residue cover to protect the soil from wind and water erosion. 
In certain regions, winter wheat can be added to a corn-soy rotation 
adding a third crop over the 2 years and providing a living cover over 
winter and additional economic revenue from adding a wheat crop.
    Like many areas of U.S. agriculture, wheat growers are producing 
more with less. Over the last 100 years, wheat yields have increased 
3\1/2\ times with about \2/3\ the acres in production. As you may know, 
there is not commercially available genetically modified wheat and we 
have not had the level of research and advancement in wheat research 
that other crops have experienced over the last 25 years. Wheat growers 
depend on different management strategies including diverse crop 
rotation, conservation practices, research and breeding including new 
hybrid wheat varieties, and crop protection tools. Technical assistance 
from Land-Grant University wheat research programs, extension programs, 
USDA and conservation district employees, and private agronomists is 
needed to make these systems work and allow growers to make ongoing 
improvements to their cropping systems.
    I mention these production issues because they are some of the 
unique characteristics that wheat growers must consider when looking at 
the developing voluntary carbon market opportunities. At this point, 
NAWG members probably have more questions than answers about 
participation in voluntary carbon markets.
NAWG Policy
    NAWG members have been discussing carbon programs and policies and 
have developed several guiding statements that were approved by the 
board earlier this year. NAWG believes that carbon policies and 
programs should recognize the environmental benefits of agricultural 
practices. Growers undertake conservation practices at their own 
expense and while these practices have environmental benefits, they can 
also have financial costs to install and can impact yield or reduce 
acreage in production and therefore reduce the income of the farm. NAWG 
supports voluntary, market-based programs and policies that provide 
economic opportunities for farmers and that recognize the achievements 
of growers in protecting and restoring the environment by rewarding 
early adopters and adding new practices. A voluntary market-based 
approach allows for growers to have that additional income stream from 
adopting and maintaining different production and conservation systems. 
Programs should be science-based, flexible and inclusive to include 
allowances for regional, geographic, or preferential differences in 
farming practices. We know very clearly that one specific approach 
won't work for all the producers across the U.S., so flexibility in 
addressing the diverse cropping systems will be essential.
    Last year, NAWG joined the Ecosystem Service Market Consortium. 
ESMC provides a forum where many grower organizations, food companies, 
input supply companies and technical advisors can come together to 
discuss the creation of ecosystem service protocols that could work 
across the U.S. NAWG is interested in voluntary carbon market 
opportunities that work for diverse wheat production systems across the 
country.
Wheat Production
    The opportunity to diversify income streams and quantify the 
environmental benefits of conservation actions is of interest to wheat 
growers. The potential for additional revenue from carbon or ecosystem 
service credits must be weighted with the specific characteristics of 
the farm. Growers must balance the economics of their operation with 
the uncertainty of undertaking different management systems. Developing 
the cropping system that works for an individual farming operation can 
take many years of exploring practices and rotations adding risk to the 
operation and making changes to those systems also comes with risk. 
There are several issues unique to wheat production that would likely 
factor into a wheat grower's decisions on potential participation in 
voluntary carbon markets:

   Diversity of wheat cropping systems.

   Relatively high rate of conservation tillage adoption and 
        treatment of early adopters.

   Regional climate, especially production in semi-arid 
        regions.

   Winter wheat provides a living crop in the field over 
        winter.

   Technical assistance is needed to understand the agronomic 
        and environmental impact of practices, such as nutrient use 
        efficiency and cover crops in semi-arid regions.

   Need to maintain a high-quality wheat crop to meet market 
        demands.

    Wheat is produced from Washington State to Pennsylvania and down 
the coast to North Carolina and from Montana to Texas, with wheat 
production in 42 states. As mentioned earlier, the different classes of 
wheat, the timing of planting, and end markets allow producers to grow 
wheat varieties that align with their local conditions and diverse 
cropping systems. For example, here are a few production scenarios:

   In central Kansas, a wheat grower could also be producing 
        corn, soybeans, sorghum, and alfalfa, practice no-till for over 
        15 years, and be trying out cover crops--but finding the right 
        mix that works for this cropping system takes time.

   In Colorado, where there is an arid climate, a wheat grower 
        may also produce corn, cattle, and practice no-till for about 
        15 years, but cover crops are a challenge in the dry climate.

   In Ohio, a wheat grower could also be producing corn and 
        soybeans, and cover crops may be used--but the winter wheat is 
        also in the ground over winter.

   In northern Minnesota, a wheat grower may produce corn, soy, 
        and sugarbeets, but there is not as much no-till in this area 
        due to the colder, wetter climate.

   In dry northern Montana, a wheat grower would also be 
        producing pulse crops and practice no-till for over 20 years 
        and trying different farming practices to conserve water but 
        cover crops not working--however the cropping system has the 
        ground covered most of the year.

   In eastern Washington, a wheat grower could also produce 
        bluegrass seed, lentils, garbanzo beans, dry peas, and canola, 
        and there is more minimum-till than no-till in the area.

    From these examples, you can see that wheat growers know the 
importance of diversifying their cropping systems to meet the unique 
growing conditions, keeping the ground covered with a growing crop to 
protect the soil from wind and water erosion, managing plant pest and 
weed resistance, and pursuing market opportunities by producing crops 
that fit their geographic location and climate. According to USDA data, 
67 percent of wheat growers have adopted conservation tillage--up from 
under 40 percent in 2004. With wheat production in semi-arid regions, 
growers take action to protect limited soil moisture and conservation 
tillage is part of that management system. In the eastern U.S., where 
there can be the opposite issue with too much moisture, wheat provides 
a living cover over winter and reduces erosion and provides durable 
crop residue as part of a no-till system.
    Growers will need technical assistance to understand both the 
agronomic and environmental impact of additional climate-smart 
practices. As I mentioned, wheat growers have been adopting 
conservation tillage over the last 15-20 years or more. Still, 
additional technical assistance will be needed to continue to expand 
and incorporate further climate-smart practices. Whether it is 
additional practices to sequester carbon or nutrient use efficiency and 
avoided greenhouse gas emissions, or practices that continue to benefit 
water quality, growers need to understand the costs and benefits of the 
practices. Technical assistance can come from different sources but 
must be from a trusted source for growers to take action to change 
production systems. Additionally, any recommendations and information 
must be regionally appropriate given the diverse production regions for 
wheat.
    Regardless of the wheat production region, the most important 
consideration for wheat growers will be economics. The changes to 
management systems could impact the quality of the wheat crop, and that 
impacts their long-term economic viability. If new market opportunities 
come with costs that don't balance out, growers cannot afford to be 
involved. And the current uncertainty of costs and obligations for the 
growers is another layer of questions and not being able to make the 
scenarios pencil out.
Wheat Production & Voluntary Carbon Efforts
    In many voluntary climate efforts (programs, protocols, markets), 
early adopters of conservation practices are not recognized as 
potential participants, and growers cannot get credit for years of 
positive environmental impacts. No-till systems must be continually 
maintained, and growers must actively manage these systems. Yet many 
climate efforts indicate that growers who have already adopted 
conservation practices will not be eligible, or that once a practice 
has been widely adopted it has become a normalized practice. This view 
of early adopters does not take into consideration the long-term 
management, ongoing investments and environmental benefits to 
maintaining conservation systems such as no-till.
    The uncertainty of the impact of certain conservation practices on 
cash crops will increase growers' skepticism of participation in 
voluntary carbon efforts or make participation unlikely. Wheat growers 
in semi-arid regions are not likely to see the same benefits from cover 
crops as those in higher rainfall areas. In the semi-arid production 
regions, cover crops can use the limited soil moisture and adversely 
impact the moisture available for the wheat crop and are not a 
recommended practice.
    No-till and cover crops are two primary practices that are 
mentioned in many of the voluntary carbon programs, but these may not 
be viable options to allow wheat growers to participate in the programs 
because conservation tillage adoption rates are high, and cover crops 
are not currently recommended for several wheat production regions. 
Also, growers planting winter wheat will have a crop in the ground 
during the traditional winter cover crop timing. This wheat acts as 
that ``cover crop,'' providing a living cover over-winter and the same 
carbon sequestration benefits.
    Additional climate-smart practices that sequester carbon or avoid 
greenhouse gas emissions must be fully understood by growers--both the 
agronomic and environmental implications. As mentioned earlier, the 
technical assistance to understand these practices and the costs and 
benefits will be critical for adopting more climate-smart practices.
    Regionally appropriate recommendations and understanding of site-
specific cropping systems will be necessary to ensure that wheat 
systems maintain high quality wheat. Our foreign and domestic customers 
source wheat and flour based on quality and U.S. wheat growers know the 
importance of maintaining the supply of high quality domestically 
sourced wheat. Changes to crop management systems could impact quality 
that would impact the wheat growers' market and our ability to stay in 
business. These agronomic impacts must be fully understood and take 
time to work into a growers' farming operation. As has been outlined in 
this testimony, wheat production is extremely varied across the 
country, so those unique localized approaches that allow growers to 
understand what works on their operation will be essential.
    In production agriculture, we talk a great deal about value-added 
products. The grain that we grow in the field goes on to become 
different products where processing and packaging add value along the 
supply chain. Wheat becomes flour that becomes that bread that you 
purchase at the store. That $3 loaf of bread includes just pennies paid 
to the farmer for their wheat at the beginning of the supply chain. As 
voluntary carbon markets develop, growers must see a larger financial 
return on carbon sequestration or avoided emissions generated on-farm. 
Those carbon credits generated on farms will not change--they will 
retain the same amount of carbon throughout the process to the end 
purchaser. Therefore, growers must be paid substantially for the carbon 
credits generated, without additional financial reductions along the 
process.
    In addition to these production issues, there is uncertainty about 
contracts and the data, land ownership and land rental, and financial 
obligations related to carbon programs. There are so many different 
carbon program options. Growers must take a great deal of time and 
effort to review the requirements before making any long-term 
commitment. It probably will require a grower to use a lawyer to fully 
understand the contract obligations and long-term implications for 
their operation. A few of the questions that I am hearing from growers 
are:

   How is carbon measured--is there a standardized approach for 
        all programs?

   How are baselines determined?

   How are early adopters treated?

   What are the data privacy issues? Data ownership?

   How much does a change in practices cost--not just in terms 
        of seed cost, but farmer time to manage the changes, income 
        forgone resulting from the change in practices, or just the 
        uncertainty of the impact on the crop?

   How easy is it to participate--data entry, time on paperwork 
        details?

   Does a farmer need to own the land? What if there is no 
        long-term rental agreement?

   How does a farmer get paid?

   When does a farmer get paid?

   How does a farmer know how much they will get paid? How do 
        they determine the financial risks?

   What happens if crop protection tools are removed from our 
        toolbox during the life of the contract?

    As the Committee continues to review these issues, the voluntary 
carbon markets should be in addition to and not replace the USDA 
programs. Wheat growers participate in and rely on the voluntary, 
incentive-based conservation programs and technical assistance that 
USDA provides. As outlined in this testimony, not all practices are 
going to work for all wheat growing regions. Wheat production is very 
diverse in geography and type of wheat grown and the crop management 
systems are equally varied. USDA conservation has provided the 
assistance to aid growers in making changes over the years and must 
continue to do so as we learn more and expand conservation practice 
adoption. In addition, USDA research funding for wheat research, new 
varieties, and new technology will be necessary. Research is essential 
to increasing our productivity and continuing to produce more using 
less resources.
    Many of the management systems would not be possible without access 
to a variety of crop protection tools. Whether it is glyphosate used to 
ensure there is no volunteer wheat in the field before planting that 
can result in disease impacting the planted wheat crop, or to help 
manage no-till systems or insecticides and fungicides used to protect 
the growing crop, growers need continued access to these tools. Efforts 
to restrict the use of these tools or remove products from the market 
will adversely impact a grower's ability to manage these conservation 
systems and could put long term management systems in jeopardy.
Conclusion
    NAWG members are cautiously optimistic about voluntary carbon 
efforts. We see the potential to have both increasingly positive 
environmental impact and additional revenue stream for those ecosystem 
services. However, there is still uncertainty if growers can 
participate based on current conservation practice adoption, diverse 
rotations that have different crops in the field throughout the year 
and the impact of some practices on crop production and quality. An 
added complexity of winter wheat production is its unique system of 
planting in the fall, providing a living root system over winter with 
subsequent harvest in the summer. Wheat growers also continue to have 
questions about the transparency and clarity of requirements, costs, 
measurement, and carbon pricing of the numerous voluntary carbon 
efforts before growers today. NAWG looks forward to continuing to be 
engaged in the discussions surrounding these voluntary efforts. Thank 
you again for the opportunity to testify today.

    The Chairman. Thank you very much, Mr. Milligan. I 
appreciate your excellent testimony.
    And now we turn to you, Ms. Merrill, for your testimony. 
You can begin now.

         STATEMENT OF JEANNE MERRILL, POLICY DIRECTOR, 
          CALIFORNIA CLIMATE AND AGRICULTURE NETWORK, 
                          ALAMEDA, CA

    Ms. Merrill. Thank you, Chairman Scott, Ranking Member 
Thompson, and Members of the Committee. My name is Jeanne 
Merrill. I am the Policy Director for the California Climate 
and Agriculture Network, a coalition of the state's leading 
sustainable organic agriculture organizations.
    Since 2009, we have worked to advance agricultural 
solutions to the climate crisis at the state and Federal 
levels, working in partnership with the National Sustainable 
Agriculture Coalition. Thank you for the opportunity to address 
the important issue of carbon markets and their potential in 
supporting farmers in mitigating and adapting to climate 
change.
    Today, I will speak to the California experience of the 
carbon markets, and our state Climate-Smart Agriculture 
programs. I will begin my remarks with an overview of the 
original market efforts in this space.
    Agriculture can and must be a part of the country's efforts 
to reduce greenhouse gas emissions, increase carbon sinks, and 
improve resilience. Effective policy tools exist to help 
farmers achieve these goals. However, since 2003, carbon 
markets have proved themselves an inadequate tool to reach the 
diversity of farmers and ranchers we must reach. Simply put, 
carbon market approaches at the voluntary and compliance levels 
have consistently failed to deliver on climate solutions in 
agriculture on any meaningful scale, leaving the vast majority 
of farmers without adequate resources to address the climate 
crisis.
    The Chicago Climate Exchange was the first national effort 
to put a carbon market in place in 2003. The exchange set up a 
market for offset credits generated by farmers whose practices 
reduced greenhouse gas emissions, practices such as rotational 
grazing, conservation tillage, prairie plantings. Companies and 
local governments would buy those credits as a way of 
voluntarily offsetting their own emissions. Farmer response to 
the exchange was considerable. Within 2 years, the Farmers 
Union had 2.6 million agriculture acres under contract with the 
exchange in Minnesota, Wisconsin, Montana, and the Dakotas. The 
Iowa Farm Bureau had another 600,000 acres under contract.
    By 2010, the exchange had collapsed. The carbon market was 
swamped with offset credits from willing farmers but didn't 
have enough buyers, and as a result, the price of carbon 
credits went from a high of roughly $7 to just 5 per metric 
ton of CO2 equivalent. In December 2010, the 
exchange closed its doors, leaving farmers without support for 
their projects.
    The next significant effort to create a carbon market came 
from California. In 2012 as part of its climate change law, the 
state launched a cap-and-trade program, requiring large 
greenhouse gas emitters to participate.
    Now, 5--excuse me, 9 years later, there are still very few 
ways for farmers to earn carbon credits, and they include 
installing dairy digesters and taking up certain rice 
management practices, both aimed at reducing methane emissions.
    But with a low carbon price and high transaction costs for 
farmers, only the dairy digester projects have sold carbon 
credits, largely because of other state financial support for 
those projects. Despite the 7 years it took to develop the rice 
protocol for the carbon market, the state's rice producers have 
stayed out of the California carbon market. It just doesn't 
make financial sense.
    Instead of relying on the carbon market, starting in 2014, 
the State of California launched its first grants-based climate 
change programs for farmers and ranchers. The Climate-Smart 
Agriculture programs bypassed the complexities of the carbon 
market, offering farmers technical and financial assistance to 
develop their projects. The programs are modeled after USDA's 
farm bill conservation programs.
    Farmer response to the state Climate-Smart Agriculture 
programs has been considerable, with application requests far 
exceeding available funding. Together, these multi-benefit 
Climate-Smart projects have resulted in greenhouse gas emission 
reductions of more than 20 million metric tons of 
CO2 equivalent, or the equivalent of taking more 
than 4.3 million cars off the road for 1 year.
    To summarize, carbon markets have failed to deliver on 
their promises. High transaction costs, the complexity of 
developing offset protocols for compliance markets, low carbon 
prices, and the inability to incentive multi-benefit projects 
means few farmers can participate in the many opportunities for 
agriculture to be part of the climate solution and are left 
behind.
    Time is ticking. According to the Intergovernmental Panel 
on Climate Change, we have only until 2030 to bend the curve on 
global greenhouse gas emissions to avoid the very worst of 
climate change impacts. We cannot waste time on complex and 
ineffective approaches. We have tried for nearly 20 years to 
make carbon markets work for agriculture, and they have failed.
    The good news is that we have time-tested and proven farm 
bill conservation programs that can deliver the resources 
farmers and ranchers need to mitigate and adapt to climate 
change today, and we can do this while supporting farm 
viability and profitability, reaching a diversity of producers, 
including small and mid-scale producers, farmers of color, and 
beginning farmers.
    Thank you very much for the opportunity to address the 
Committee today, and I look forward to your questions.
    [The prepared statement of Ms. Merrill follows:]

   Prepared Statement of Jeanne Merrill, Policy Director, California 
              Climate and Agriculture Network, Alameda, CA
    Thank you, Chairman Scott, Ranking Member Thompson, and Members.
    My name is Jeanne Merrill and I am the Policy Director for the 
California Climate and Agriculture Network. We are a coalition of the 
state's leading sustainable and organic agriculture organizations. 
Since 2009, we have worked to advance agricultural solutions to the 
climate crisis at the state level and at the Federal level, working in 
partnership with the National Sustainable Agriculture Coalition.
    Thank you for the opportunity to address the important issue of 
carbon markets and their potential role in supporting farmers in 
mitigating and adapting to climate change.
    Today, I will speak to the California experience of the carbon 
markets and our state-funded, grant-based Climate-Smart Agriculture 
programs. I will begin my remarks with an overview of the original 
market efforts in this space.
    Farmers and ranchers have an important and unique role to play in 
addressing climate change. Agriculture can and must be part of the 
country's efforts to reduce greenhouse gas emissions, increase carbon 
sinks and become more resilient. Effective policy tools exist to help 
farmers achieve these goals.
    However, since 2003, carbon markets have proved themselves an 
inadequate tool to reach the diversity of farmers and ranchers we must 
reach. Simply put, carbon market approaches at the voluntary and 
compliance levels have consistently failed to deliver on climate 
solutions in agriculture on any meaningful scale, leaving the vast 
majority of farmers and ranchers without adequate resources to address 
the climate crisis.
The Chicago Climate Exchange
    The Chicago Climate Exchange was the first national, voluntary 
effort to put a carbon market in place. The Exchange set up a market 
for offset credits generated by farmers and ranchers whose practices 
reduced greenhouse gas emissions and increased carbon sinks \1\ on 
agricultural lands--practices such as rotational grazing,\2\ 
conservation tillage,\3\ and prairie plantings.\4\ Companies and local 
governments would buy those credits as a way of offsetting their own 
greenhouse gas emissions.
---------------------------------------------------------------------------
    \1\ http://www.fao.org/soils-portal/soil-management/soil-carbon-
sequestration/en/.
    \2\ https://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/home/
?cid=nrcs142p2_020783.
    \3\ https://asi.ucdavis.edu/programs/ucsarep/about/what-is-
sustainable-agriculture/practices/conservation-tillage.
    \4\ https://uwmadscience.news.wisc.edu/ecology/grasslands-among-
the-best-landscapes-to-curb-climate-change/.
---------------------------------------------------------------------------
    I was working in Wisconsin in 2006 when the state's Farmers Union 
began reaching out to dairy producers and other farmers offering to pay 
them for their climate-beneficial practices. The response was 
considerable: Within 2 years, the Farmers Union had 2.6 million 
agricultural acres \5\ under contract with the Chicago Climate Exchange 
in Minnesota, Wisconsin, Montana, and the Dakotas. The Iowa Farm Bureau 
had another 600,000 acres under contract.
---------------------------------------------------------------------------
    \5\ https://www.minneapolisfed.org/publications/fedgazette/turning-
carbon-into-cash.
---------------------------------------------------------------------------
    But by 2010, the exchange had collapsed. The carbon market was 
swamped with offset credits from willing farmers, but it didn't have 
enough buyers. As a result, the price of the carbon credits went from a 
high of roughly $7 to just 5 per metric ton of CO2 
equivalent. In December 2010, the Chicago Climate Exchange closed its 
doors, leaving farmers and ranchers without support \6\ for their 
carbon farming practices.
---------------------------------------------------------------------------
    \6\ https://archive.nytimes.com/www.nytimes.com/cwire/2011/01/03/
03climatewire-chicago-climate-exchange-closes-but-keeps-ey-
78598.html?pagewanted=all.
---------------------------------------------------------------------------
California Carbon Market
    The next, significant effort to create a carbon market came from 
California. In 2012, as part of its climate change law, the state 
launched a cap-and-trade program, requiring large greenhouse gas 
emitters to participate. Now, 9 years later, there are still very few 
ways for farmers to earn carbon credits, and they include installing 
dairy digesters \7\  and taking up certain rice management 
practices,\8\ both aimed at reducing methane emissions. But with a low 
carbon price and high transaction costs for farmers, only the dairy 
digester projects have sold carbon credits, largely because of other 
state financial support \9\ for the projects. Despite the 7 years it 
took the industry, working with environmental partners and the state, 
to develop the rice protocol for the carbon market, the state's rice 
producers have stayed out of the California carbon market. It just 
doesn't make financial sense.
---------------------------------------------------------------------------
    \7\ https://ww3.arb.ca.gov/cc/capandtrade/protocols/livestock/
livestock.htm.
    \8\ https://ww3.arb.ca.gov/cc/capandtrade/protocols/
riceprotocol.htm.
    \9\ https://www.cdfa.ca.gov/oefi/ddrdp/.
---------------------------------------------------------------------------
California's Climate-Smart Agriculture Programs
    Instead of relying on the carbon market, starting in 2014, the 
state of California launched its first grants-based programs to pay 
farmers and ranchers who take up farm management practices that reduce 
greenhouse gas emissions and increase carbon sinks. California became a 
pioneer for what is now called ``Climate-Smart Agriculture'' \10\ 
programs. The programs bypass the complexities of the carbon market, 
including price volatility, offering farmers and ranchers technical and 
financial assistance to develop their climate-friendly management 
projects. The programs are modeled after USDA's farm bill conservation 
programs.
---------------------------------------------------------------------------
    \10\ http://calclimateag.org/wp-content/uploads/2019/02/CSA-fact-
sheets-combined.pdf.
---------------------------------------------------------------------------
    The first Climate-Smart Agriculture programs focused on three 
areas: drought and farm resiliency, farmland protection from urban 
sprawl, and the development of dairy digesters. Grant funds were made 
available to farmers to improve their irrigation management systems to 
save water and energy and reduce related greenhouse gas emissions. 
Recognizing that protected farmland on the urban edge of our cities and 
towns could reduce sprawl development and greenhouse gas emissions 
associated with passenger cars, the state also invested in conservation 
easements to permanently protect agricultural lands at risk of 
development. Finally, looking at potent methane emissions from dairy 
manure, the state launched its dairy digester program to reduce 
emissions from large dairy farms.
    The second wave of state investment in new Climate-Smart 
Agriculture programs came in 2017 with the creation of the Healthy 
Soils \11\ and the Alternative Manure Management \12\ (AMMP) programs. 
Under the former, farmers and ranchers are paid to practice soil 
management and farmscape practices that sequester carbon and reduce 
greenhouse gas emissions. The latter focuses on dry manure management 
practices for dairies and other livestock operations to reduce methane 
emissions, including composting manure.
---------------------------------------------------------------------------
    \11\ http://calclimateag.org/solutions/healthysoils/.
    \12\ http://calclimateag.org/ammp/.
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    Farmer response to the state Climate-Smart Agriculture programs has 
been considerable with application requests far exceeding available 
funding, even during the difficult times of the pandemic. For example, 
despite the shelter-in-place orders, which had greatly disrupted 
agricultural markets in March 2020, more than 600 farmers and ranchers 
applied for the state's Healthy Soils Program. A total of $22 million 
in projects were funded, bringing the total to nearly 700 funded 
Healthy Soils projects statewide.
New Voluntary Markets
    Now, a private, voluntary national carbon market developed by one 
ag-biotech company offers farmers $15 per metric ton of carbon 
sequestered.
    However, state initiatives offer a better value for farmers to meet 
their basic costs in transitioning to new farming methods. For example, 
one California Healthy Soils grant recipient, a farm in Butte County in 
northern California, will sequester 110 metric tons of carbon and will 
receive a grant worth $64,000 from the state. Under the new voluntary 
carbon market program, the same farm would receive just $1,650 for 
those same 110 metric tons of carbon sequestered. That is a stark 
difference.
    The state's program bases its funding awards on the costs of 
installing or shifting to new farm management practices--e.g., the cost 
of cover crop seed, compost, mulch, etc.--and the carbon market 
approach is based largely on what the buyer is willing to pay for a 
metric ton of carbon equivalent, even if that is well below what the 
farmer may need to cover his or her costs.
Carbon Market Challenges, Farm Bill Conservation Program Opportunities
    To summarize, carbon markets have failed to deliver on their 
promises:

   High transaction costs for project development and 
        verification mean small and mid-scale farmers and farmers of 
        color are left out of compliance and voluntary markets.

   The complexities of developing offset protocols for 
        compliance markets, which must be additional, verifiable, and 
        permanent, means that it can take years to develop credible 
        offsets, as in the case of the rice/methane protocol in 
        California, which took 7 years to develop. And even now not a 
        single rice farmer has signed up for those carbon credits.

   Low carbon prices do not come close to compensating farmers 
        for the true costs of their new practices, resulting in only 
        the largest producers participating, and often that is because 
        there are other sources of public and private funds, as in the 
        case of dairy digesters.

   Carbon markets are blunt tools that cannot adequately 
        incentivize multi-benefit projects that address other 
        environmental and public health concerns, like enhanced 
        biodiversity, improved air, and water quality, and more.

    Time is ticking. According to the Intergovernmental Panel on 
Climate Change \13\ (IPCC), we have only until 2030 to bend the curve 
on global greenhouse gas emissions to avoid the very worst of climate 
change impacts. We cannot waste time on complex and ultimately 
ineffective approaches like carbon markets. We have tried for nearly 20 
years to make carbon markets work for agriculture and they have failed.
---------------------------------------------------------------------------
    \13\ https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-
ipcc-special-report-on-global-warming-of-1-5c-approved-by-governments/.
---------------------------------------------------------------------------
    We have time-tested and proven farm bill conservation programs that 
can deliver the research, technical assistance, and financial 
assistance that farmers and ranchers need to reduce their greenhouse 
gas emissions, improve their carbon sinks and build their resilience to 
greater weather extremes. And we can do this while supporting farm 
viability and profitability, reaching a diversity of producers and 
agricultural communities. We are doing that in California through our 
Climate-Smart Agriculture Programs. We modeled our efforts off of 
USDA's Natural Resource Conservation Service programs, adding in a 
focus on climate change outcomes.
    The Agriculture Resilience Act (ARA) and related legislative 
efforts that focus on scaling up and refining farm bill conservation 
programs to address the climate crisis can provide the necessary 
resources for farmers to address climate change challenges, allowing 
our agricultural industry to thrive.
    Thank you for the opportunity to speak today.

    The Chairman. Thank you very much, Ms. Merrill.
    And now, first, your testimonies were just outstanding, and 
you have brought some very important information and facts to 
the Committee, and we want to thank you for that.
    Now, at this time, Members will be recognized for questions 
in order of seniority, alternating between Majority and 
Minority Members. You will be recognized for 5 minutes each in 
order to allow us to get as many questions in as possible. And 
again, Members, please keep your microphones muted until you 
are recognized so that we can minimize the background noise. 
Please remember that.
    And now, I will start off the questions. I recognize myself 
for my 5 minutes.
    I want to put this to every one of you, and hopefully you 
have time to answer it and give me your opinions.
    As we are moving into this area of engaging our farmers, 
our food producers, textile producers, forestry, all of the 
important elements of our agriculture production process, do 
any of you feel that in any way our food security production 
processes, the amount of food we are producing, that any of 
pulling our farmers away from doing what they naturally do, 
planting the cotton, doing what is necessary to keep our 
agriculture system moving? Does it in any way offer any kind of 
negativism to our ability to keep our agriculture production at 
the level that it needs to be if we are pulling our farmers 
away to engage in partnerships dealing with these carbon 
markets? Would you, any of you, just comment on that? Give us a 
yes or no. It is important that the American people know that 
our food security and our agriculture production will not go 
down as we move farmers into engagements with carbon markets.
    Mr. Milligan. Thank you, Mr. Chairman. David Milligan.
    I think you raise a very excellent point, and I think it is 
a very important fact that we need to remember food security. 
We don't have to go very far back to the pandemic when we saw 
some empty shelves, and I think that is very important as we 
move ahead that food security be very top priority.
    And yes, I think there is a possibility that this could 
become a problem to food security if some of these programs I 
hear out there would be forcing reduced production. I think 
that could be a concern, so I think I very much appreciate you 
bringing that concern. I think it is a very important point.
    The Chairman. Let me ask you, if I may, what--could you 
describe, pinpoint what that concern is? How would it 
negatively impact?
    Mr. Milligan. There seems to be certain crops that might be 
favored over others because of carbon sequester. One might be 
better than the other, which might reduce supplies. There has 
been some idea of idling more land. That might be an option.
    The Chairman. Okay.
    Mr. Milligan. That would be a real serious consideration to 
the amount of production we might have.
    The Chairman. Very good. I think you had a comment, ma'am? 
Go right ahead.
    Ms. Eideberg. Sure, Mr. Chairman. What a really important 
question.
    Many of the practices that are incentivized by markets and 
via a lot of the conservation programs we see implemented today 
also have very good co-benefits for the land by increasing soil 
fertility. So, increasing soil fertility, both brings up a 
farmer's yield especially over time, and decreases the negative 
impacts to the environment. So, we frankly see this might, over 
time, be a strong positive, especially as we are seeing 
stronger storms and more extreme weather hit in more isolated 
areas. We want to make sure that those farmers are as resilient 
as they can be in these challenging times.
    The Chairman. Thank you.
    Mr. Bastos, you mentioned in your testimony that Bayer is 
committed to share carbon credit value with farmers. How are 
you doing that?
    Mr. Bastos. Thank you, Chairman Scott.
    Bayer, as a company, we actually have the focus of being a 
farmer-centric organization. So, we need to work with the 
farmers. Whatever we do, we need to work with the farmers.
    So, what we have today is a contractual agreement with the 
farmers that has, like, a specific provision in terms of 
sharing the net proceeds of these credits as we actually have 
them into the market, and those net proceedings and the 
contractual provisions, they exist, they audit it, and there is 
the disclosure mechanism that we have to make sure that we are 
fulfilling our promises in sharing the most of the value to the 
farmer.
    The Chairman. Thank you very much. I thank both of you, all 
of you, very much.
    And now, Ranking Member, Mr. Thompson, I yield 5 minutes to 
you. Thank you.
    Mr. Thompson. Mr. Chairman, thank you so much. Once again, 
thanks to all the witnesses.
    I want to start out, first question is for Ms. Jeanne 
Merrill for the California Climate and Agriculture Network.
    Ms. Merrill, I found your testimony very insightful and I 
appreciate hearing about your experience with these markets. In 
your testimony, you say: ``. . . since 2003, carbon markets 
have proved themselves an inadequate tool to reach the 
diversity of farmers and ranchers we must reach. Simply put, 
carbon market approaches at the voluntary and compliance levels 
have consistently failed to deliver on climate solutions in 
agriculture on any meaningful scale, leaving the vast majority 
of farmers and ranchers without adequate resources to address 
the climate crisis.''
    Can you summarize why, in your opinion, your observations, 
the carbon markets have failed to deliver on their promise?
    Ms. Merrill. Yes, thank you.
    Two things. One is we have seen in California with our 
compliance markets, we have a regulated carbon market, and as 
just one example, it took 7 years for the California Rice 
Commission working with environmental partners and the state to 
develop a protocol to reduce methane emissions from rice 
production. It was complex. They were very much steeped in the 
science, but also steeped in the sort of practicalities of what 
would work for farmers.
    At the end of the day, after all of those many years of 
trying to develop the protocol and coming up with methods of 
reducing methane in rice production, not a single rice producer 
in California or anywhere in the country, because our market is 
available to producers nationwide and in some parts of Canada, 
have signed up for that protocol. And that is because we have a 
relatively low price for carbon. We don't pay very well, and we 
have high transaction costs. And for most small- and mid-scale 
producers, entry into the carbon market, whether it is the 
California version or the voluntary market, doesn't make a lot 
of economic sense because of those high transactions costs of 
developing projects, of having them verify it. It is just 
proved a very complex and ineffective way to deliver the 
resources that we need to deliver that both help farmers to 
reduce their greenhouse gas emissions and increase carbon 
sinks, but also to become more resilient, to be able to better 
weather greater weather extremes. We simply haven't seen in 
California farmers being interested in the carbon market, but 
we have overwhelming demand for our grants-based Climate-Smart 
Agriculture programs which, as I mentioned, are modeled after 
the USDA farm bill conservation programs.
    Mr. Thompson. Thank you, ma'am.
    Mr. Milligan, good to see you. I think the last time we 
crossed paths for us was in Michigan, and really glad to have 
you here. Thanks for coming to Washington.
    Earlier this year, I introduced the SUSTAINS Act (H.R. 
2606, Sponsoring USDA Sustainability Targets in Agriculture to 
Incentivize Natural Solutions Act of 2021), which would allow 
for third parties, including corporations, businesses of all 
sizes, from large, mega-size, you pick it, Amazon, Google, 
whatever, Disney, down to the mom-and-pop hardware store owners 
on the corner, to invest in NRCS conservation programs. In 
doing so, it would allow the private-sector to partner with 
farmers, ranchers, landowners, in support of agricultural 
conservation, the programs that we see out of the farm bill.
    Do you believe that this concept is something that you and 
others would support?
    Mr. Milligan. Thank you, Representative Thompson.
    Yes, I see a lot of positives to some of these programs, 
EQIP and the CSP that have been out there. They have been very 
positive to help growers.
    We certainly feel that everything needs to be voluntary, 
though, and they are, these programs, but looking ahead, I 
still think it is very important that we remain voluntary on 
these programs.
    Mr. Thompson. Thank you. Thank you for those comments.
    We invest billions of dollars through the farm bill. We are 
really proud of the conservation title, and the benefits it 
brings. A lot of that has helped us reach that natural land 
solutions level of 6.1 gigatons of carbon sequestered annually, 
and we can do better.
    Despite investing billions, I believe the number was in 
2020 there were 80,000 EQIP applications we couldn't fund 
because we had exhausted those resources. When you think about 
just doing a little bit more with EQIP and perhaps other 
conservation programs, how much more carbon could we sequester? 
And it honors the principle of you can't have a healthier 
environment without a healthier economy, because it is helping 
our farmers, ranchers, and foresters.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Ranking Member.
    And now, I will recognize the gentlewoman from North 
Carolina, Ms. Adams, who is also Vice Chair of our Agriculture 
Committee here in the House. You are recognized, Ms. Adams, for 
5 minutes.
    Ms. Adams. Thank you, Mr. Chairman, and thank you to the 
Ranking Member as well, and to our witnesses. Thank you for 
being here.
    Mr. Bastos, in your testimony you suggested that there is a 
role for this Committee and Congress to play in scaling up 
voluntary carbon markets. My question is what policies or 
incentives can best encourage participation in carbon markets 
by limited resource landowners, such as small, historically 
disadvantaged farmers?
    Mr. Bastos. Congresswoman Adams, thanks for the question.
    I think that the--I will say that some of the things we 
[inaudible] helped scale in these programs in the voluntary 
markets is related to bringing confidence to the market. 
Relating to standards, investing and perhaps having the USDA to 
work with a standards organization to build commonality, and 
something that can be actually shared and understood by 
farmers.
    The second piece of that is actually a bit of the research 
and the foundational research, and I think some of the 
conservation programs can actually yield some of that research 
data that will hopefully benefit the markets in terms of 
quantification.
    And last, I would say that there is an important investment 
that needs to be done in terms of upscaling a labor force to 
work at the intersection of agriculture and carbon markets so 
farmers can get assisted in how they implement those best 
practices to keep producing their crops in a sustainable 
manner.
    So, these are my thoughts.
    Ms. Adams. Okay, thank you very much.
    Ms. Merrill, thank you for sharing the programs California 
farmers have been able to engage with to achieve both 
environmental and economic benefits.
    So, could you speak to California's efforts to ensure that 
historically disadvantaged farmers are able to access and 
participate in California's Climate-Smart Ag programs?
    Ms. Merrill. Thank you, Representative Adams, for that 
question.
    We have a very strong focus on reaching socially 
disadvantaged farmers and ranchers. We have a Farmer Equity Act 
that was passed in 2017 that focuses in particular on farmers 
of color and women farmers, and making sure that our state 
programs are reaching them. So, as part of the Climate-Smart 
Agriculture programs, we have a technical assistance fund to 
provide funding for technical assistance providers, our 
resource conservation districts, our co-op extension folks to 
develop projects, Climate-Smart Agriculture projects with 
farmers and to help with their application, as well as project 
implementation, and a minimum of 25 percent of those dollars 
must benefit socially disadvantaged farmers and ranchers, and 
since that fund was created, we have seen a significant 
increase in the number of socially disadvantaged farmers or 
underserved farmers who are participating in our programs like 
the Healthy Soils Program and others that are really about 
delivering not only benefits to the environment, but also to 
farmers.
    Ms. Adams. Okay. Are they able to submit multiple 
applications, or just the one time?
    Ms. Merrill. We have multiple programs, so they can submit 
multiple applications to those multiple programs. So, whether 
it is Healthy Soils to look at your soil management practices, 
or our state Water Efficiency and Enhancement Program, which is 
all about better irrigation management to reduce water and 
energy associated with moving water.
    Ms. Adams. Thanks very much.
    Mr. Milligan, in addition to potentially mitigating 
greenhouse gas emissions, many recognize that agriculture 
practices used to generate carbon offsets such as no-till and 
cover cropping provide other benefits such as reduced soil 
erosion and improved water management. So, would you have 
adopted the new farming or forest management practices required 
for participation in the carbon market program if you had not 
enrolled in the program?
    Mr. Milligan. We as a general organization are very in 
favor of all the voluntary programs. Some of our members have 
enrolled in them and some have not.
    Ms. Adams. Okay, great. Well, thank you very much, and 
thank you all for your testimony.
    Mr. Chairman, I yield back.
    The Chairman. Thank you.
    The gentleman from Georgia, Mr. Austin Scott, is recognized 
for 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman.
    Mr. Milligan, I am going to come to you pretty quick here, 
but I do want to mention that when we talk about the 
environment, I think that we need to talk about it as a whole, 
not as individual segments like carbon, for example. And I will 
tell you, in my district they have cut down a tremendous number 
of acres of forestland that provided tremendous wildlife 
habitat. As we know, the forests are good for the environment 
and the wildlife and the water, and I think that when you cut 
down forestlands and replace it with solar panels, I don't know 
that the net is a positive for the environment as a whole. I 
mean, certainly the solar panels don't produce as much carbon 
as other methods of producing the energy, but I do think it is 
dangerous that we are not talking about the environment from 
the stand point of wildlife habitat and water resources as a 
whole when we segment this thing out. I am not sure that we end 
up with a net positive.
    I have a facility in Cook County, Georgia, and I was down 
there the other day and I asked what all of those large 
generators were for. I couldn't figure it out. And lo and 
behold, the company out of Canada is mining coins in Cook 
County, Georgia. And I don't understand the creation of the 
coins or the value of the coins, just as I don't understand the 
creation of the carbon credits or how the value of the carbon 
credits are derived.
    Mr. Milligan, you are the farmer of the group. Do you 
understand how the carbon credits are valued, and how it is 
determined what the farmer gets for the carbon credit?
    Mr. Milligan. No, I do not at this time. It is a developing 
market. I think that perhaps some of these markets are testing 
the waters, shall we say. I think we need to have a standard as 
to how to measure these, a consistent standard across the grain 
market. Somebody sets a standard of what a bushel of wheat is, 
what it weighs, what the grade is. I think these priorities 
need to be established. I think there is a lot of, maybe the 
science isn't quite caught up to where we are yet. It is a new 
field. I think that we have to be real careful moving in. I 
don't think we want to make a lot of mistakes. We don't want 
this to fail. I think there needs to be a lot of groundwork 
done yet.
    Mr. Austin Scott of Georgia. That is what scares me about 
the application of this to agriculture is that the people who 
are ultimately responsible for America's food supply may be 
signing up for something that in some cases has a 100 year 
requirement on it. And we don't know even how the value is 
calculated or where the credit comes from, just as I don't 
understand the mining of coins and the value of coins.
    But I do know that there is a simpler way to do this, and 
through ASCS, we used to encourage farmers to use good 
practices for the environment, like no-till, and we used to--
there used to be a payment--some assistance for farmers to use 
things like no-till, and those payments have disappeared, it is 
my understanding. Is that correct?
    Mr. Milligan. I think that was touched on a little bit 
earlier with the Ranking Member. There have been some programs 
out there that have worked very effectively, and as we 
mentioned the funding ran short on that. So, I think you make a 
valid point.
    Mr. Austin Scott of Georgia. And so, if I could, one of my 
concerns is that some of the people that I see up here in 
Washington, one of which is from my state, has adopted a lot of 
these practices, and that is very nice if you can afford to pay 
$20 for a range-fed chicken, which is what they get for a 
range-fed chicken--I might add, that is not cooked--when most 
of us, if we are going to spend $20 on chicken, we do it at KFC 
and we get a 12-piece bucket with mashed potatoes and green 
beans. And I do think that there is a significantly better way 
for us to help agriculture in this by simply adopting best 
practices in parity with our producers, and helping with the 
increased costs of that.
    So, my concern with where this is taking us is that there 
is going to be a value created out of thin air that is going to 
provide very little for the farmer or the environment, and then 
a whole bunch of people that don't have anything to do with 
agriculture are going to be getting the money.
    And with that, Mr. Chairman, is that acceptable?
    The Chairman. Yes, it is.
    The gentlewoman from Maine, Ms. Pingree, is recognized for 
5 minutes.
    Ms. Pingree. Thank you very much, Mr. Chairman. Thank you 
for holding this hearing. I think this is a really important 
topic, and there is a lot to say and not a lot of time to say 
it, so I will try to be quick.
    I think it is one--a couple things before I ask my 
questions. I do think it is really important we don't muddy the 
waters here between voluntary and mandatory carbon markets, 
compliance markets. This is about voluntary markets and really 
most of the witnesses have dealt with that, and I appreciate 
that.
    And just quickly, I think it is very difficult to use an 
example for 2010. I love the programs that California is doing 
and I know they have a lot of great work going, but the changes 
in these markets from 2010 to today is enormous, and I think we 
have to talk about what we are dealing with now, and the huge 
interests in the voluntary markets that is going on right now. 
So, I just want to put that out there.
    But first, I want to ask, Ms. Reed, thank you so much for 
your testimony. We have heard a lot of the witnesses talk about 
scaling up and refining the farm bill conservation programs, 
and I am pleased to hear that there is so much agreement on 
that, and that is really one of the reasons why it is such an 
important part of the Build Back Better Program, because we do 
need to invest more.
    But I want to talk about all the tools that we can use, so 
we know those things are really important to our carbon 
sequestration. But could you talk a little bit more about how 
those two work together, these voluntary ecosystem services 
markets, and the role they play in our broader strategy of 
conservation programs and what we are talking about today?
    Ms. Reed. Yes, thank you, Representative Pingree. Nice to 
see you, and thanks for the question.
    So, these voluntary markets are entirely complementary to 
USDA conservation programs. As a matter of fact, those 
conservation programs are a form of up-front financing to help 
farmers and ranchers actually participate in the markets, which 
can bring in an additional income stream. We do view them as a 
form of up-front financing, and we feel that USDA conservation 
and technical assistance is essential to farmers and ranchers 
to have place-based assistance to help them be successful.
    So, again, they are entirely complementary and a new and 
additional opportunity, if you will, to invest in climate-smart 
practices. And I think the reason that companies are investing 
as well in both of those opportunity sets is because the 
practices we are trying to increase at scale actually make 
farmers and ranchers more resilient to the impacts of climate 
change. So, all of them together are really win/win 
opportunities for producers.
    Ms. Pingree. Great, and thanks for talking about the 
importance of the resilience for farmers, because we do want to 
make sure all of our farmers both get that extra income stream, 
but have these resilient practices.
    So, a couple more quick questions to Ms. Eideberg from EDF. 
Thank you so much for your testimony here today.
    It has been touched on a little bit, and I think everybody 
is very concerned about the lack of uniformity. So, if you want 
to just say a couple things about what happens if the USDA 
doesn't play a role, as this is increasingly becoming the Wild 
West out there, and there are a lot of different systems and it 
does need to be managed differently.
    And if you could just throw in one other thing that I am 
concerned about. I deal with a lot of organic farmers, 
sustainable farmers who have been using these practices for a 
long time. Mr. Milligan from the Wheat Growers mentioned it. 
How do we recognize those farmers that already have good 
practices going to make sure that what they have been doing in 
the past isn't left out, or set aside?
    Ms. Eideberg. Thank you, Congresswoman, for the question.
    If USDA doesn't get involved--and I would actually even 
hedge and say that it doesn't necessarily have to be USDA. It 
could be another neutral third party. But if we don't have a 
referee on the field, we don't have someone setting standards 
and providing consistent measurement, farmers are probably 
going to get the short end of the stick. They need to be able 
to have a consistent target to shoot for, and then buyers want 
to make sure that the credits that they are buying are quality 
credits and are not going to be eliminated or discounted later. 
So, I think for the protection of farmers, we have to have that 
referee out there.
    Second, in dealing with early adopters, this is a really 
challenging place. I think that, I will go back to the Food and 
Agricultural Climate Alliance that EDF is a part of. This is 
something that our organizations have wrestled with. We think 
there are some options out there. Our specific recommendation--
and I know that there are others out there--but our specific 
recommendation was to do one-time payments to farmers who are 
early adopters, and then make sure that they are continuously 
enrolled in some sort of state or Federal or other approved 
conservation program. So, there were innovative and different 
ways we could think about it, but it is extremely important.
    Ms. Pingree. Thank you. I am out of time. I yield back. 
Thank you, Mr. Chairman. I really do appreciate this 
conversation today.
    The Chairman. Yes, thank you, Ms. Pingree.
    And now, I recognize the gentleman from Tennessee, Mr. 
DesJarlais, 5 minutes.
    Mr. DesJarlais. Thank you, Mr. Chairman, and certainly, 
thank you to all of our witnesses for appearing here today. I 
am grateful for your testimony, and the opportunity to hear 
your answers to this subject as to how we can best help our 
U.S. farmers.
    No one cares more about the land than this nation's farmers 
and ranchers. They depend on healthy soil to feed and clothe 
our country. When it comes to carbon markets and the farmers in 
my district, the number one priority is that any programs 
remain voluntary. Overburdensome government regulations create 
costly and time-consuming barriers for hardworking members of 
our agriculture community. I am a firm believer that the 
private marketplace will best regulate itself.
    There are still a lot of questions to be answered when it 
comes to the carbon stored in soil becoming its own commodity 
crop. Congress must ensure any legislation passed does not pick 
winners and losers, and ultimately hinder innovation and stifle 
competition.
    Mr. Milligan, in your testimony you listed 11 questions you 
frequently hear from growers. Considering the lack of full 
understanding of these emerging markets, do you think it is 
premature for the Federal Government to get involved?
    Mr. Milligan. I think that as we have discussed this and we 
have a special committee at National Association of Wheat 
Growers, and we feel that government would have a very 
prominent place in establishing some standards so we have 
uniform standards across the industry, maybe a few other 
guidelines as science, I mean, what does carbon look like? How 
do you measure it? It is a Wild West field out there.
    Yes, I think there is a place to set some uniformity and 
some standards.
    Mr. DesJarlais. Do you think Congress should divert USDA 
resources for new programs to stand up carbon markets?
    Mr. Milligan. We feel that voluntary works well, and the 
private--I think the private has an opportunity to step in and 
fill that need.
    Mr. DesJarlais. Yes, I find it has been a rare occasion 
that the Federal Government does much better in anything than 
the private-sector can do, and certainly, I trust our farmers 
who are actually in the field, like yourself, to make better 
decisions.
    Currently, what is the largest barrier to participation in 
these markets for wheat growers, and more broadly, other 
agriculture producers?
    Mr. Milligan. I think it is the unknown. I have not had 
personal experience with it, and I know some of our growers 
have. The dollar amounts out there have not been--I think fell 
way short of what the cost might be involved. There are some 
long-term commitments that people have asked for that certainly 
people are very hesitant to get into. It is the uncertainty.
    Mr. DesJarlais. So, that wouldn't necessarily indicate that 
this hearing is premature, but possibly any action that was 
taken in this timeframe would be premature and would be harmful 
to the ag community. Would you agree with that?
    Mr. Milligan. It is a work in progress.
    Mr. DesJarlais. Any idea what kind of timeframe it would 
take to undertake something of this magnitude?
    Mr. Milligan. It is a little above my pay grade.
    Mr. DesJarlais. But anything that usually is rushed by our 
government tends not to work out very well, and it seems like 
we are in a big rush. We have a lot of pressing issues that we 
need to be discussing right now, including our role in 
oversight, but I appreciate we are moving forward with 
hearings. It is good to have this conversation. I think it is a 
little premature, and seems to be driven by a bigger agenda, 
but I thank you for your answers and your time here.
    I yield back.
    The Chairman. Thank you, Mr. DesJarlais.
    And now, the gentlewoman from New Hampshire, Ms. Kuster, 
you are recognized for 5 minutes.
    Ms. Kuster. Thank you, Mr. Chairman, and thank you. I 
appreciate you holding this hearing on carbon markets.
    Given the weather events that happened across our country 
this summer, whether it was wildfires or floods or hurricanes, 
I do not believe that this is too soon to be talking about the 
impact of carbon on the changes to our climate, particularly 
for farmers, with the droughts and the very heavy rains. It has 
been a very, very challenging time.
    So, I believe that the crisis of climate change requires an 
all hands on deck approach, and all viable solutions must be on 
the table, including carbon markets for farmers and foresters.
    I have talked to farmers and foresters across New 
Hampshire, and I have been deeply impressed by all that they 
are already doing to adopt climate-smart practices and make 
their lands effective carbon sinks. Many are doing this on 
their own initiative. Farmers know all too well their 
livelihoods are on the line with the threats of climate change 
and extreme weather.
    I had hail on my deck this summer in New Hampshire that was 
several inches deep, and it harmed the apples at the orchard 
right down the road from my house. So, these are fantastic 
USDA, Natural Resources Conservation Service programs that 
support our efforts and provide valuable technical assistance 
to producers to cope with these extreme weather events.
    As private carbon markets grow, I can see these invaluable 
opportunities to further strengthen the agriculture sector's 
conservation work and carbon capture potential. In fact, it is 
one of the main reasons that I came back to the Agriculture 
Committee this session.
    It is also important that we continue to reduce and 
eliminate emissions by buying credits to offset them, and I am 
concerned that small farmers and forest operations will have 
limited access to participate in carbon markets. It is 
important, as the witness said, that these markets have 
rigorous protocols and oversight to ensure effectiveness, but 
often, this can be burdensome for smaller farmers, like the 
farmers in my state that have limited time and resources to 
meet those requirements. Entities looking to purchase carbon 
credits need to see the value of working with family farmers 
and our homegrown foresters. As we advance solutions to address 
the climate crisis, we need to make sure no one is left out or 
left behind.
    So, I have a question for Mr. Antonioli. Thank you for 
being here to talk about the work that Verra is doing as the 
world's largest carbon crediting verifier program. I am curious 
about how what you see in terms of small farms and forests 
participating in the carbon markets that you certify, and 
beyond the demands of compliance process, what do you see is 
the biggest barriers to small producer participation? How can 
we help address this in Congress?
    Mr. Antonioli. Thank you, Congresswoman, and those are 
very, very good questions.
    I want to point out one thing and emphasize a little bit 
about what you said about the evolution of the carbon markets. 
They are very different than what they were back in the day. 
Even I was skeptic of agricultural carbon credits, because I 
didn't think that the ability to demonstrate the soil carbon 
sequestration was there. But over time, we have seen that the 
science has evolved, technology has evolved. There is a much 
better understanding of the non-carbon benefits, and there is 
increased growing demand, which I think will help the small 
farmers.
    I mean, this isn't a solution that is going to work for 
everybody, but it is another option, and it is a complement to 
what farmers have available. And if the markets continue to 
grow and we start to see continued higher prices, that is going 
to inevitably be another option for farmers that is going to 
let them do that.
    Another really important element that I think is worth 
bearing in mind is that farmers can step into this slowly. It 
is not that you have to turn your entire farm to the 
regenerative agriculture practices all of a sudden, all at 
once. You can step into it at part of your field. You can do it 
on a step-wise approach in terms of the practices that you 
implement. And so, the idea there--and I think this really goes 
down to how we have been thinking and how the market has been 
thinking about how to create these--the protocols and the 
methodologies, to allow farmers to step into this slowly in a 
way that gives them the confidence they need. And then once 
they realize the benefits, they can continue to expand that.
    Thank you again.
    Ms. Kuster. Great. Thank you.
    My time is very limited, so just quickly, Mr. Luoma, can 
you speak to how participation in private carbon markets has 
helped your company and others provide good stewardship of our 
forests with enhanced financial viability?
    Mr. Luoma. Yes, thank you, Representative, for the 
question. It is a good question.
    As we have been talking about right along on the 
agriculture side, the same holds true on the forestry side in 
terms of voluntary participation. So, these----
    The Chairman. The time has expired. Excuse, but we are on a 
schedule and an answer could be provided in writing, if you 
don't mind.
    Ms. Kuster. I will yield back, Mr. Chairman.
    Mr. Luoma. Will do.
    [The information referred to is located on p. 128.]
    The Chairman. We are on a tight schedule and we want to get 
everybody in.
    Now I recognize the gentleman from California, Mr. LaMalfa, 
is recognized for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. I appreciate it.
    I have a question for Mr. Luoma, obviously, we have had 
plenty of wildfire out in the West and are running into issues 
of the burn scar basically affecting just about everything. So, 
in order to protect the carbon credits, we need to have the 
asset that has been set aside as a credit area continue to 
exist. But, the fires don't distinguish between these 
boundaries, so carbon credit areas can be affected by fire. So, 
one known as the Colville IFM project has burned during what is 
called the Bootleg Fire. This happens to be on the Oregon side, 
but there are many, many acres up there I believe would add up 
as far as offsets in terms of tons was 14 million tons of 
offset just this last August on the Bootleg Fire that was used 
in the California markets for carbon compliance.
    So, what happens in the situation where basically a set 
aside area dedicated to the carbon capture carbon markets, if 
that burns in a wildfire situation like we did have in this 
forested area? Then what is the liability for those that bought 
the credits or for those who are the landowners that 
participated in the project sort of as the holder of the 
credit, if that makes sense when you have a natural disaster 
like that? How do we sort that out?
    Mr. Luoma. Thank you, Representative LaMalfa. I appreciate 
the question, and there is no question that the concern over 
the fire situation out West is concerning to all of us. 
Thankfully, we don't deal with that so much in the South or in 
the Midwest or even in the Northeast.
    I am not an expert on how the carbon markets are working 
out there, but I would suggest that as we continue to study 
improvements in the way we would implement these markets, that 
we would have alternatives to cover the carbon that has been 
identified for credits across a larger forested landscape so 
that a particular tract of land, if it has been designated for 
carbon storage and carbon credits, if something happens to that 
like in fire or pathogens, that there are alternatives that can 
be brought into play.
    What I think is most important, though, is this notion that 
working forests need to continue to work, and there are lots of 
opportunities for identifying alternative carbon storage 
sources across the working forest, and maybe----
    Mr. LaMalfa. Mr. Luoma, again, our time goes so fast here, 
and I am sorry about it, but I appreciate that thought that the 
forest needs to continue to be working in order to be effective 
on that. If we just dedicate it as a set aside and then never 
touch it, once again, you're going to have the same problem we 
have in a lot of the forested areas. So, it has to be working 
landscape no matter if it is a set aside or not.
    But, could you maybe offline give us some more ideas on 
what the alternatives are? Because you have X amount of acres 
set aside for this carbon credit area and it did burn, we would 
probably have to have something more defined as what the 
alternative would be. We can't have maybe two blocks of land in 
order to do it in case one burns. I don't know if that would be 
practical. So, let me thank you, Mr. Luoma.
    [The information referred to is located on p. 129.]
    Mr. LaMalfa. Let me ask Ms. Merrill here. You mentioned 
that since 2003 the different carbon markets have proved 
themselves basically inadequate to reach the different farmers 
and ranchers due to pricing that the carbon market developed 
protocol, for example, for rice growers, which I happen to be 
and have lived firsthand. That rice producers haven't taken 
advantage of it, haven't participated because it just doesn't 
add up. We have experienced that with rice straw disposal and 
all sorts of things over the years that have--it just--it never 
gets back to the farmer, it is the people in between.
    So, what could you emphasize would be a better pass forward 
for getting more grower participation so they can actually 
benefit and be more enthusiastic about it?
    Ms. Merrill. Yes, thank you for the question.
    We have seen certainly with the Climate-Smart Agriculture 
programs in California, which are modeled after the USDA farm 
bill conservation programs, that that is an approach that 
works. The voluntary carbon market that is currently in place 
pays pennies or up to $15 per metric ton of carbon sequestered, 
but when we compare, for example, with that of a farmer in your 
neck of the woods in Butte County who signed up for a Healthy 
Soils grant----
    The Chairman. I am sorry, but your time has expired. It is 
very important that every Member, I want to get in, and votes 
will be coming up shortly, so we want to have a tight schedule 
so we can get everybody in. I appreciate that.
    Now, I will recognize the gentlewoman from Illinois, Mrs. 
Bustos, who is also the Chair of the Subcommittee on General 
Farm Commodities and Risk Management. You are recognized for 5 
minutes, Mrs. Bustos.
    Mrs. Bustos. Thank you, Mr. Chairman.
    As we have heard from our witnesses, there are several 
private carbon markets that are currently in operation, and I 
wanted to highlight a recent announcement by Indigo Ag and 
GROWMARK, which is an Illinois-based, farmer-owned cooperative 
that will create additional opportunities for farmers across 
the Midwest to participate in a carbon market.
    Indigo Ag is one of the first companies to initiate a 
carbon market, providing much-needed flexibility for farmers to 
meet outcome-based targets. They have worked extensively on 
credits that are high quality and, very important, 
independently verified. So, this combined with GROWMARK's large 
network and the relationship with their grower customers, it 
creates an exciting opportunity for farmers to generate 
additional revenue by implementing climate-smart practices that 
sequester carbon and improve water quality, and biodiversity. 
Quality is the beneficial link between farmers and buyers, and 
it is proven to lift prices 35 percent over the past year. And 
as we all know, a critical component of building private carbon 
markets is for buyers to know and to trust that the credits 
generated are fully verified and based on strong measurement 
protocols.
    I have a statement here that I would ask for unanimous 
consent to enter into the record, if we could do that before I 
ask a question here.
    The Chairman. Without objection.
    [The news release referred to is located on p. 125.]
    Mrs. Bustos. Thank you, Mr. Chairman.
    So now, Mr. Bastos--and I like your name. It is very 
similar to mine with one letter difference. Could you share how 
Bayer determines the price it will pay farmers for these 
credits?
    Mr. Bastos, you are muted, sir.
    Mr. Bastos. Oh, I am sorry.
    Mrs. Bustos. Thank you. If you could try it again, please?
    Mr. Bastos. Yes. So, Congresswoman Bustos, thank you for 
the question.
    The way we determine the price is actually based on public 
information from multiple companies, and also like the 
reference related to nature-based solutions in the market. 
Right? So, we know that today, nature-based solutions are 
actually ranging from a price between $15 to $25, so that is 
how we actually have as a parameter for how much we are 
expecting to get paid for these credits, and therefore, how 
much it can actually afford this kind of cost that it takes to 
verify those credits back to the farmer.
    Mrs. Bustos. So, what if the price of carbon increases 
during the term of a contract?
    Mr. Bastos. That is exactly like what we have as a 
provision in our contract. As prices increase, we actually 
share more of that value back to the farmer.
    Mrs. Bustos. And then can the credit price be adjusted 
then?
    Mr. Bastos. Yes.
    Mrs. Bustos. Okay, and how about if the price of the carbon 
decreases? What happens then?
    Mr. Bastos. We honor the contract with the farmer and we 
keep paying them the amount that we actually initially agreed 
upon.
    Mrs. Bustos. Okay. Okay. Thank you very much for that 
clarification.
    Mr. Antonioli, most agricultural carbon markets seek new 
greenhouse gas reductions or new carbon sequestration. Farmers 
and ranchers who are already implementing climate-smart 
practices, these early adopters, so to speak, are often either 
ineligible to participate in carbon programs, or can't 
financially benefit from generating carbon credit.
    My question to you, sir, is should carbon markets consider 
or compensate early adopters, and if so, if you could explain 
how you think that should be done?
    Mr. Antonioli. Thank you, Congresswoman.
    It is a very good question and we have already discussed 
that topic, but I wanted to emphasize that I think there are 
creative ways of solving that. But at the end of the day, I 
mean, organizations like us, we do need to certify the 
additional carbon sequestration that is generated. Maybe there 
are other ways that you can compensate for farms who are 
already doing the right thing, but from a carbon crediting 
perspective, it is important that we ensure that we are 
crediting only additional and new carbon sequestration.
    Now, there is one element that is important, that the 
practices that are being implemented or that can be credited, 
kind of are additional--and you may already do no-till farming, 
maybe you are doing some cover crops. But there are other 
things you can do to continue to generate more carbon 
sequestration. So, that is one of the really great innovations 
that we have seen in the market, that you are able to add on 
more management practices to continue to add to the carbon in 
the soil, and that you can get credit for.
    Thank you.
    Mrs. Bustos. Okay, thank you very much.
    Mr. Chairman, I yield back my remaining 12 seconds.
    The Chairman. Thank you.
    The gentleman from Georgia, Mr. Allen, is recognized for 5 
minutes.
    Mr. Allen. Thank you, Mr. Chairman, and getting back to the 
point of staying on subject. If you could put out some type of 
a rule about what we can address and what we can't address so 
that we can hold both sides accountable, I think that would be 
in order. So, if your staff or you and the Ranking Member could 
get together and set out those rules about what we can talk 
about and then how we object to others and their comments, and 
how we can stop this rhetoric on both sides, then I think that 
would be the fair way to go about things. With all due respect, 
you are the Chairman and I respect you and love you, and want 
to see this Committee succeed, but it is very difficult under 
these circumstances to do this.
    But from the standpoint of this hearing, I have done as 
much research and the staff has done as much research as we can 
about this, and it is a very complex subject, as is climate 
change, because I am skeptical of this whole business because a 
lot of folks make a lot of money. The thing that really bothers 
me is that our farmers have provided oxygen through their 
timber and their crops to this country, and yet, now we are 
talking about, ``Hey, we are going to incentivize you to do 
more. We are going to pay you for more. We are not going to pay 
you for what you have already done,'' because we know that over 
the last--and there is no question that over the last 50, 100 
years--I mean, just 50 years ago 98 percent of the population 
was in agribusiness, lived on the family farm. And now we have 
these huge cities with traffic problems and everything else 
that are contributing enormously. And then you have big tech. I 
mean, look what big tech is contributing to the carbon 
footprint and everything that they manufacturer, all the 
electricity they use. Air conditioning. Air conditioning is 
another one, and then, of course, air travel is another one. 
So, as our society has changed, we have to adapt to it and deal 
with these things.
    But here we go back to the farmer, and our farmers--like I 
said, I am skeptical about this thing because as we have seen 
many times, the government gets involved and then these large 
corporations get to go out and say, ``Hey, I am carbon neutral 
because I am paying a farmer 10 on the dollar to produce 
oxygen.''
    So, my question is do any of the witnesses feel qualified 
to give a defense of these markets, and how in good 
conscience--I can go to, say, my timber growers and encourage 
them to engage in markets in which they would likely only 
receive a very small percentage of exactly the value of what 
they are creating. Would anyone have the expertise to explain 
that to me?
    Ms. Reed. I would be happy to, Congressman Allen. This is 
Debbie Reed.
    I will point out that markets pay for new product, just 
like markets will pay for corn or soy that is generated on an 
annual basis. These markets are paying for new product. I think 
that is an important distinction, right? Why market rules 
prevent you from paying for something that happened in the 
past.
    I do think, though, that brings a great point is that USDA, 
if they set up a carbon bank, could, in fact, pay early 
adopters through that carbon bank. I think that would be an 
excellent value to reward growers, including farmers and 
ranchers and foresters, who have, in fact, done something in 
the past because we all, as society, do benefit from those 
outcomes, as you point out. We benefit every day from them. So, 
I think that is a perfect public role that is perhaps different 
than what a private voluntary market could do.
    Mr. Allen. But again, Americans--when we think of secondary 
markets, because they have to be heavily regulated. There is a 
lot of irresponsibility and fraud in these markets that these 
corporations have been hiding for years, like derivatives and 
all these other things, and some with nationwide and extreme 
ramifications. Again, we have talked about the value of this, 
and how do we offset the value with what we would be able to do 
when we can't even measure it, as I understand it.
    So, with that, Mr. Chairman, I yield back.
    The Chairman. Thank you very much.
    And now I recognize the gentleman from California, Mr. 
Carbajal. You are recognized for 5 minutes.
    Mr. Carbajal. Thank you, Mr. Chairman, and thank you to all 
our witnesses that came here today.
    Agriculture practices and land management decisions play a 
key role in the discussions surrounding global greenhouse 
emissions and climate policy. Keeping farmers and ranchers in 
production is vital to food, and of course, our national 
security. We must make strides in sustainability while keeping 
food on the table, and it is essential that we do so in a way 
that supports small- and medium-scale farms in gaining entry 
into carbon markets.
    Ms. Reed, what resources can the government use to ensure 
that opportunities to participate in agricultural carbon 
markets are inclusive to a diverse range of farmers, and are 
there existing Federal programs that could be utilized to 
resolve potential participation barriers?
    Ms. Reed. Yes, thank you, Representative Carbajal, for the 
question.
    I think the answer is yes. USDA technical assistance to 
help farmers and ranchers understand which management changes 
they can undertake so that their outcomes on an annual basis 
can be measured and then valued in the market is the best, 
perhaps, utilization of their resources to really provide that 
on-the-ground technical assistance for farmers and ranchers.
    I think there has also been some discussion about USDA 
conservation programs which do the same thing and provide a 
form of up-front financing as well as technical assistance for 
farmers and ranchers to understand in their region and for 
their own production systems the best actions they can take 
that work within the context of their farm or ranching system. 
We don't want to try to impose any one size fits all 
requirements on farmers and ranchers. We want them to do the 
things that actually work best for them, and I think that that 
is the best utilization of USDA resources in those two arenas.
    Mr. Carbajal. Thank you very much.
    The next question that I have is for Ms. Eideberg. Farms, 
ranches, and forests in my Central Coast district are on the 
front lines of climate change. Each year, extreme weather 
events and drought continue to threaten my community and the 
environment around it. Carbon markets have the potential to 
deliver other critical environmental benefits beyond carbon 
sequestration and GHG emissions reductions.
    Ms. Eideberg, can you speak to what other benefits we might 
see from carbon markets?
    Ms. Eideberg. Certainly. Thank you for the question.
    It has been mentioned here today that diversity in income 
is a potential benefit of voluntary markets, but on the 
agronomic side of things, the practices that are incentivized 
by markets and by the conservation programs at USDA, increase 
soil fertility, increase the ability of soil to retain water in 
a flood situation.
    Those are the key co-benefits that we are looking for these 
conservation practices to provide. In California where you have 
water in short supply, you need that soil to be able to 
maintain every bit of moisture that it can, and using these 
conservation practices can provide that co-benefit to the 
farmer and to that field so that they are able to stay in 
business for much longer than we might project now.
    Mr. Carbajal. Thank you.
    Ms. Reed, what additional measures, what additional 
outreach can be conducted to incentivize and to reach out to 
more farmers and ranchers interested in participating in carbon 
markets throughout our country, and certainly the Central Coast 
that I represent?
    Ms. Reed. Yes, thank you.
    I think in the Central Coast in particular, what we need is 
more data actually for specialty crops. We don't have a lot of 
information about specialty crops and really how to quantify 
the impacts of improved management practices in specialty 
crops. I think that is one major thing that USDA could do is 
additional research there, and additional support in those 
production systems for--whether it is wine grape growers, for 
instance, or almond orchards, to understand what practices make 
them more resilient and can improve soil carbon sequestration 
and water holding capacity, et cetera.
    I think additionally, though, farmers and ranchers need to 
understand what are the roles and responsibilities they take on 
when they participate in these markets, so that they have a 
very clear vision of what is going to be required of them----
    The Chairman. The time has expired. You can provide an 
answer in writing.
    Mr. Carbajal. Thank you, Mr. Chairman.
    [The information referred to is located on p. 128.]
    The Chairman. The gentleman from Indiana, Mr. Baird, you 
are recognized for 5 minutes.
    Mr. Baird. Thank you, Mr. Chairman, and Ranking Member.
    I think we all recognize that this is an emerging market, 
and it may be appropriate--or I think it is appropriate that we 
have this discussion and kind of get a sense of what programs 
are working in this market.
    And so, having said that, Mr. Milligan, in your testimony 
you expressed concern that many producers continue to have 
questions about the carbon markets and the impact of those on 
the farms, and that not all protocols will work in every 
situation. And so, I hear frequently from my producers that all 
practices may not work for all operations. So, for example, 
livestock producers may have a different need, and so on, than 
crop producers. So, do you have any suggestions how we can 
account for differences in geographic or soil or other 
operation differences that may otherwise prevent producers or 
enhance producers' ability to participate in these programs?
    Mr. Milligan. Thank you for the question. You raise a very 
valid point. We did try to emphasize that in our conversation 
earlier about the diversity in the rainfall.
    I think it gets back to--there is going to be a lot more 
research I think that is going to be involved from the land-
grant universities, the main stream that fits all, there may be 
some guidelines and things out there for them. But as we get 
into these different environments that are not quite as 
plentiful, they have been passed by on the research. I think we 
need some more research and sound science behind these 
practices in these areas.
    Mr. Baird. Absolutely. I agree with your thought about 
additional research, and I appreciate a science-based kind of 
decision.
    But, in that same vein, how do you think we handle it if a 
landowner has land and somebody else is renting it? How do we 
handle those relationships on who gets paid?
    Mr. Milligan. I am not sure I am capable of answering that 
question. That question is a very valid question that has been 
raised. Maybe some of the people in the carbon market--that are 
in the carbon market might have some insight on that, but that 
is certainly a factor going ahead.
    Mr. Baird. Thank you.
    So, I have a last question. I think agriculture--and we 
have kind of focused on some of that here today--is a shining 
light and has some real potential to be involved in this carbon 
market. And then I mentioned livestock just a little bit 
earlier.
    So, Mr. Antonioli--did I pronounce that close--and Ms. 
Reed, this has to do with dairy operations and the use of 
methane digesters and so on. So, what steps do you think we 
could take that would be helpful to get this challenge and help 
dairy producers participate in these programs?
    Mr. Antonioli. Thank you, Congressman Baird, for the 
question.
    So, there are a few things that dairy producers can do. 
Obviously, they can do digesters. There is obviously a fairly 
strong carbon market led by California that is actually 
incentivizing the creation of digesters to treat the waste. 
There are new technologies and new approaches that are being 
brought on to the market. For example, there is a new 
technology that is an additive to feed that reduces the methane 
from enteric fermentation. And so, the carbon markets are great 
at fostering that kind of innovation.
    And to relate to your previous question, you think about 
different lands. Right now, the current approaches might be 
limited to certain lands and certain types of activities, but 
over time as the markets evolve, if people start to see that 
there are other opportunities, new crops, new activities, new 
practices that can be done, those can be folded into the carbon 
markets and continue to drive that innovation.
    Ms. Reed. Yes, thank you.
    I would add to that. So, we have a dairy project in 
California which we are doing a whole farm approach, so it 
includes a methane digester, it includes looking at feed 
production for the actual dairy cows, and how we can reduce the 
footprint of feed production. It includes some new feed 
additives, as David pointed out, that I think will really show 
positive ability to reduce methane from both enteric emissions 
from the dairy cows, but also they are utilizing new 
technologies to convert manure into soil amendment products 
that will help increase soil carbon on the farm for the feed 
that is being grown.
    So, we are looking at whole farm, whole landscape 
approaches, and then we are looking at water quality and water 
use conservation on the farm so that we can really look at the 
entire footprint and all of the beneficial impacts.
    Mr. Baird. I appreciate all your responses, and I could go 
on for additional time on this, but my time is up. I yield 
back, Mr. Chairman.
    The Chairman. Thank you.
    The gentlewoman from Washington, Ms. Schrier, is recognized 
for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman, and thank you for 
convening this hearing on such an important topic.
    Farmers and ranchers are right at the front-lines of the 
climate crisis. They are feeling the effects across the country 
and droughts, fires, and floods are affecting their 
livelihoods. Carbon markets are one tool that we have to 
address and mitigate the growing threat of climate change, and 
as I have heard, not all solutions work for all types of farms, 
but this is one tool we have.
    They have the potential to make an impact and have garnered 
broad bipartisan support, but they do need to be implemented 
really thoughtfully to ensure that they result in long lasting 
carbon sequestration.
    First, I would love to talk about forests, which have an 
enormous potential to sequester carbon, and I am from 
Washington State. As conventional agriculture works to develop 
and implement regenerative practices in carbon markets, forests 
have greater carbon storage potential right now in the near-
term, and increasing forest carbon sequestration is simple. It 
is based on evidence-based forest management. And while there 
are often high barriers to entry into these markets, we know 
what the right practices are: hazardous fuel management, 
reforestation, and an active wood products industry. In 
addition to the carbon storage benefits, implementing these 
practices both on public and private lands also has the 
potential to reduce the frequency and severity of wildfires and 
provides ecologic benefits such as improved wildlife habitat.
    Now, traditional threats to forests like wildfire still 
pose risks to the forestry carbon market, and disease can 
rapidly erase years of progress. And that is why active and 
aggressive forest management is key to mitigate these potential 
risks and make our forests more resilient, and prevent them 
from releasing carbon as opposed to sequestering it. We just 
need an all hands on deck approach to forest management.
    And that is why I introduced H.R. 3442, the National 
Prescribed Fire Act of 2021, an increase in Federal investment 
in prescribed burns as a preseason wildfire mitigation 
strategy. I also helped secure $60 million in this year's 
budget for the Collaborative Forest Landscape Restoration 
Program, and I am working with local stakeholders in my 
district to bring a small diameter sawmill to central 
Washington, where 85 percent of one of my counties is forested.
    I also want to note that private companies are interested 
in offsetting their carbon footprint, and they understand the 
potential that forests hold and are driving the demand for 
carbon credits from forests. These companies don't just want to 
invest in forests, they also want to invest in forest 
sustainability and make sure this is done right.
    I have some questions for Brian Luoma. Mr. Luoma, in your 
testimony you mentioned the challenge of increasing 
participation and confidence in foreign carbon markets. From 
your perspective, how can Congress support this effort, and 
what role do you see the Federal Government playing in forestry 
markets specifically?
    Mr. Luoma. Thank you, Representative, and I agree with 
everything you just said. Congratulations on that legislation.
    We need to continue to define what the opportunities are in 
this market, and supporting funding in the USDA with the FIA 
and the Forest Products Lab, the grants programs where we can 
do research and do analysis and understand better what is at 
play in the full life cycle analysis all the way to the built 
environment. From seedling all the way through to seedling, if 
you will, there is a tremendous amount of carbon to be 
sequestered and stored in the forest while it is working, and 
then moved into the built environment where it gets stored for 
a long time.
    We don't know a whole lot about how to do the accounting 
for that. A lot of people are working on it. But I think 
funding within the USDA to help us do research there will be 
very helpful.
    Ms. Schrier. Yes, I agree. I mean, how long will that 
cross-laminated timber building remain? Because at some point, 
wood degrades or is brought down and we are looking at 100 year 
solutions.
    Now, given that 40 percent of U.S. forests are publicly 
owned, what opportunities do you see for public-private 
partnership in the forestry carbon offset market space?
    Mr. Luoma. Yes. Again, I think that is a discussion that 
can be had within USDA and within all of the organizations that 
are working on this, including the Environmental Defense Fund 
and The Nature Conservancy. There is a lot of collaboration now 
on the principles----
    [The information referred to is located on p. 130.]
    The Chairman. The gentleman can respond with a letter. 
Thank you.
    And now, the gentleman from Iowa, Mr. Feenstra, is 
recognized for 5 minutes.
    Mr. Feenstra. Thank you, Chairman Scott, and thank you, 
Ranking Member Thompson.
    I just want to give a shout-out to all our farmers and 
producers around the country. I am absolutely so proud of them. 
I am so proud of what they have done when it comes to our 
environment. Sometimes they get vilified by environmentalists. 
I just want to tell everyone, they are doing an amazing job. My 
district is probably one or two in the nation when it comes to 
production in agriculture, and we are doing all these things. 
We are doing no-till. We are doing cover crops. We are doing 
nutrient management, and when I hear these conversations, I get 
concerned about are they going to be part of the solution when 
it comes to helping them? When discussing carbon markets, the 
farmers in my district, they have a lot of interest and with 
that, they have several questions.
    One of these questions is, like I said, they are doing all 
these great practices. Now, are they going to be compensated 
for these practices as we move forward, and I would ask Mr. 
Bastos if you could answer that question?
    Mr. Bastos. Thank you, Representative, for the question.
    I think we debated a little bit today about the idea and 
the challenge that we have in terms of early adopters in the 
market. We at Bayer, we actually--in our program like in a way 
that we actually compensate those early adopters, but I would 
say that carbon markets and offsets are pretty much like one 
type of solution. I think there are other solutions in that 
space related to the food value chain, for example, in terms of 
creating sustainably sourced products that can actually help 
those farmers get compensated for the services that they do.
    So, my point is offsets are one part of the solution, but 
there are other tools that these farmers can actually 
participate and be compensated for the services that they 
provide to agriculture and to the environment.
    Mr. Feenstra. Thank you for that.
    In my district, carbon capture and storage projects that 
will sequester carbon directly from fertilizer plants, ethanol 
plants, never letting the carbon go into the atmosphere. I am 
supportive of these projects and 45 key tax credits that 
encourage this type of construction.
    This is for any witness. As companies work to reduce carbon 
emissions on their own, what does that mean for the future of 
carbon credits? Is there a viable market for farmers and 
producers in the long-term when you have the private-sector 
doing something like this?
    Mr. Antonioli. Thank you, Congressman. That is a great 
question.
    I think there is a viable market in the long-term, but I 
think you point to something that is very important, that there 
are companies taking responsibility for their own emissions 
first. And that is, in terms of the role of the voluntary 
carbon markets, they are meant to be complementary to those 
internal reductions.
    The voluntary markets are growing. They will continue to 
grow, but they will also complement the activities the 
companies are doing to reduce their own internal emissions, 
which is perhaps the bigger part of the solution or the 
challenge.
    Ms. Reed. Yes, I would add to that in that I think what you 
are seeing the huge growth in markets is because we now have 
every sector actually acting to reduce their emissions, and 
every industry that operates across those sectors doing that.
    So, the increased demand extends into the agricultural and 
farming and ranching, if you will, supply chain, so there is 
huge demand and I think that demand will only go up.
    Mr. Feenstra. Thank you for those comments. Thank you very 
much.
    As farmers look to engage in the carbon markets, my 
priority is to ensure that the farmers are empowered, and have 
the technical advice needed to make these decisions. This is so 
important. Farmers succeed when there is certainty and 
transparency in any marketplace. While many have interest in 
the carbon markets, farmers are hesitant because of so much 
confusion.
    Mr. Milligan, in your testimony, you highlighted similar 
concerns for wheat growers. I am wondering, from your 
perspective, can growers--what are some of the biggest barriers 
that we should be concerned about, and how do we rectify them?
    Mr. Milligan. The biggest barrier seems to still be the 
sound science behind what is actually out there in the market, 
and of course, wheat is so diverse. It is grown in so many 
different areas that wheat is kind of unique to the mainstream 
crops.
    Mr. Feenstra. Yes, David?
    Mr. Antonioli. If I may, Congressman?
    I realize that to answer your previous question, it is 
really important to note that farmers, in terms of soil carbon, 
generate what we call removals of carbon from the atmosphere, 
and there is a very long-term market for those. There is a 
fairly limited supply of those kind of credits in the market 
today, and as we move towards 2051, the world is looking at 
achieving net zero targets, their removals will be a critical 
part of the question.
    Mr. Feenstra. Thank you, and thank you, Mr. Chairman. I 
yield back.
    The Chairman. Thank you.
    The gentleman from Georgia, Mr. Bishop, is recognized for 5 
minutes.
    Mr. Bishop. Thank you very much, Mr. Chairman, and thank 
you so much for holding this hearing. It is indeed very timely 
with the climate challenges with which we are faced, and as 
indicated, our farmers are among the greatest stewards of our 
environment.
    I want to follow up on something that Mr. Feenstra touched 
on, and I think it has to do with the concept of additionality 
for early adopters. Some of the risks associated with carbon 
markets as they are currently structured is that the early 
adopters, like the organic peanut farmers and others in my 
district who have been practicing climate-smart agriculture for 
decades, and those who participate in the USDA conservation 
programs like EQIP could possibly be excluded from 
participating because the carbon sequestration and the storage 
benefits from their operations are already baked into the 
baseline. So, in effect, early adopters could feel that they 
are penalized because they have been doing the right thing.
    So, I was encouraged to see that Bayer Carbon Initiative 
provides compensation to producers for up to 5 years of past 
practices on or after January 1, 2012, but only 17 states are 
currently participating in the program.
    So, I would like Mr. Bastos to talk just a little bit about 
the concept of additionality, and why Bayer decided to make the 
payments eligible for past practices, and I would like to know 
also if he feels that it would be helpful for USDA to provide 
incentives similar to those that Bayer is providing for early 
adopters, and if that would be helpful?
    Mr. Bastos. Thank you for the question, Congressman Bishop.
    The concept of additionality is one that we actually 
discussed today about implementing these practices actually 
happens because there is an incentive to implement the project 
right, related to carbon. It wouldn't have occurred otherwise.
    So, we actually have in our program this 5 year payment, 
let's say, and that is kind of like in sync with some of the 
standards actually represented by Mr. Antonioli here today.
    So, that is how we actually approached the program, and the 
other thing is related to incentives. I think that my personal 
point of view on this is incentives are always helpful, but I 
think they need to be in sync with what carbon markets actually 
require, otherwise, to your point, they can be excluded if 
additional incentives come on top of the current incentives in 
the market, and they are not well designed to meet the 
additionality criteria.
    Mr. Bishop. Thank you very much.
    Mr. Antonioli, switching gears slightly. The Family Forest 
Carbon Program connects family forest owners with trusted 
information and professionals, and it pays them for 
implementing carbon positive forest management practices. The 
House Agriculture Committee just passed a bill that provides 
similar incentives for small forestland owners. Verra is 
responsible for developing the methodology for this program. In 
addition to the Family Forest Carbon Program, it provides 
corporations with a platform to reach that critical 
environmental and economic goals.
    It wasn't covered in your testimony, but the American 
Forest Foundation considers it a priority to support small 
forestland owners in accessing carbon markets. Can you talk 
more about the importance of supporting small farmers and 
forestland owners?
    Mr. Antonioli. Yes, sir, Congressman. It is a great point, 
and that is one of the challenges that the carbon markets have 
been facing is how do you actually make it accessible to the 
small land holders and the small forest owners, because they 
tend to be smaller and they have fewer resources at their 
disposal. So, we are working actively with the American Forest 
Foundation to try to figure out how to really create a new 
methodology, if you will, to enable that.
    The recently approved methodology for soil carbon is a good 
example of how you create something that is scalable and that 
is accessible to small farmers. Of course, the price is 
critical. The higher the price, the more that you have 
available to be able to make the practices happen on the 
ground. It is an ongoing challenge, and it is something that we 
consider always and are working towards that.
    Mr. Bishop. Thank you very much. My time is about up. I 
will yield my remaining 13 seconds back, Mr. Chairman. Thank 
you very kindly.
    The Chairman. Thank you very much.
    The gentlelady from Louisiana, Ms. Letlow, you are 
recognized for 5 minutes.
    Ms. Letlow. Chairman Scott and Ranking Member Thompson, 
thank you for facilitating this hearing to discuss, and most 
importantly, learn from a full panel of witnesses regarding 
voluntary carbon markets and the agriculture industry.
    To all the witnesses: your time and insight provided here 
today has been invaluable as we, Members of this Committee, 
continue the review and oversight of policies that have been 
introduced this Congress.
    I would like to start my remarks by echoing what many of my 
colleagues have stressed before me. Our farmers, ranchers, and 
forestland owners are the pioneers of conservation and 
sustainability on our productive lands. There are numerous 
factors that agriculturalists have to consider when planning 
for a new season, and those decisions ultimately impact the 
vitality of our soils for future growing seasons.
    Whether it is adopting new practices, implementing new 
technologies, or mitigating for potential risks, farmers are at 
the forefront of innovation and they work hard every day to 
preserve the land for generations to come.
    It's essential that we recognize these successes of our 
farmers and the standing USDA conservation programs, and ensure 
our agricultural communities are the true beneficiaries, as we 
continue to build upon these efforts.
    Agriculture is a very diversified industry. Regions have 
different growing seasons, climates, production practices, and 
risks. What works for the Southeast generally does not apply to 
the Pacific Northwest.
    Mr. Milligan, in your written testimony you provided 
several scenarios where a one size fits all approach isn't 
feasible for just one crop. That is wheat. Similarly, no-till, 
cover crops, and other basic conservation practices don't fit 
more niche commodities like rice, crawfish, sugar, and others 
in my home State of Louisiana.
    I know you touched on this briefly in response to my 
colleague, Mr. Baird's, questioning, but can you further 
elaborate on the challenges presented by a single carbon market 
system on such a diversified industry? Second, in your 
experience, what would be the best approach to make these types 
of programs more inclusive and equitable for all commodities 
and across different crop mixes?
    The Chairman. I believe that question was for you, Mr. 
Milligan.
    Mr. Milligan. Excuse me. Sorry. Thank you for the question.
    It is a real challenge, as you mentioned, and I think I 
mentioned earlier when you get to diverse crops. We have some 
specialty crops in our area, too. You mentioned rice, and I 
think it is still back to there needs to be more research, 
whether it is land-grant universities. They certainly want to 
be a part, when I speak about wheat, we feel that wheat growers 
are doing a good job, but we feel we can do a better job. And I 
think that pretty much sums up what it would be for a lot of 
these other commodities. I think there certainly is an interest 
in there to do the right thing and to be compensated for it, 
but certainly we have to have the sound science to back it up.
    Ms. Letlow. Thank you.
    I have a follow up question for Mr. Bastos. I understand 
your company has some experience in this space, given Bayer's 
own carbon program. Do you have anything you would like to add?
    Mr. Bastos. Thank you for the question, Congresswoman 
Letlow.
    So, I would emphasize some of the topics here. I think 
research is actually definitely fundamental right, for us to 
actually evolve into multiple crops, multiple systems, and even 
different geographies. But we have to start somewhere, and I 
think that that is never--there is never a bad time to actually 
start somewhere, especially with climate change.
    So, we think that this is a step-wise process. We start 
where we actually can have an impact, and then by having an 
impact, that creates some kind of better outcomes for the 
market. The market gets excited. There is new innovation, new 
technologies that allow these other farmers and other crops to 
actually jump in and participate.
    So, I think it is a starting point, and us as a company, we 
are actually doing the same thing. We work with multiple 
farmers, multiple crops, but we actually have to start 
somewhere, and that is what we are doing today with the Bayer 
Carbon Program.
    Ms. Letlow. Thank you so much to the witnesses.
    Mr. Chairman, I yield back the remainder of my time.
    The Chairman. Thank you very much.
    The gentlewoman from Connecticut, Mrs. Hayes, who is also 
the Chairwoman of the Subcommittee on Nutrition, Oversight, and 
Department Operations, you are recognized for 5 minutes. Mrs. 
Hayes.
    Mrs. Hayes. Thank you so much, Mr. Chairman. I am happy to 
be here today discussing carbon markets and their potential to 
help in our fight against climate change.
    It is increasingly clear that our farmers, especially our 
small family farms with high costs of operation and slim profit 
margins, are on the front lines of the climate crisis. Not only 
are they tasked with mitigating their own carbon emissions, but 
they must withstand more frequent natural disasters caused by 
carbon emissions of the past. While carbon markets could be an 
effective piece of a larger strategy to fight climate change, 
we must ensure that we are putting family farms at the center 
of our conversations, and not treating them as an afterthought.
    Connecticut family farms have long led the way in climate-
smart policies, and are steadfast in their commitment to 
stewardship over the land for future generations. Many farms in 
the district that I represent have proactively implemented the 
use of cover crops, rotational grazing, no-till farming, and 
agroforestry. It is our duty not only to provide our small 
farmers with the resources they need, but to adapt and sustain 
climate-smart policies, and also to ensure we explore every 
opportunity to make the agriculture industry a leader in the 
fight in this climate crisis. Carbon markets, if done well, 
will make farmers in my district part of the solution.
    Ms. Eideberg, my question is directed to you. In your 
testimony, you mentioned that USDA should ensure equitable 
access to markets. Can you elaborate on how USDA can ensure 
that small farmers have access to carbon markets?
    Ms. Eideberg. Sure. Thank you for the question.
    Carbon markets or voluntary greenhouse gas markets can be 
confusing. They can be complicated. We have already heard other 
witnesses and Members of Congress talk about some of the 
challenges, contracts that are 100 years or more. These are all 
barriers for producers to participate. Getting USDA involved, 
setting some standards that everyone can work towards, making 
sure that we are bringing down the cost of the measurement in 
verification so that smaller farms can participate in these 
scenarios. I think those are all really good roles for USDA to 
play.
    I heard one of our other panelists earlier talking about 
conservation programs at USDA as a way for farmers to start 
this process, kind of that up-front capital so they can 
potentially engage later, so that is an opportunity. But I also 
think that at USDA, we have an opportunity to provide really 
strong technical assistance to those farmers who need this work 
and making sure that we are supporting those on-the-ground 
resources in every district and every county to every farmer is 
incredibly important.
    Mrs. Hayes. Thank you. You have actually answered my next 
question, which was what existing Federal policies do to either 
help or exacerbate some of the challenges of farmers, so I am 
very happy to hear that you are acknowledging those things and 
recognize that we have to work to close those gaps.
    I know that another concern with carbon markets is that 
they may not incentivize large corporations to cut their carbon 
emissions, possibly leading to more pollution in underserved 
areas.
    Ms. Eideberg, how do you think the USDA and Congress can 
ensure that carbon markets do not lead to more pollution in 
environmental justice communities?
    Ms. Eideberg. Well, I think the key point is the 
distinction between voluntary markets that we are talking about 
here, and compliance markets. EDF and I think many of the 
panelists, if not all of the panelists here, would not be 
advocating for producers to be able to completely offset their 
emissions with credits from the agricultural sector, because 
frankly, it can be a little bit risky. We might get there at 
some point. We probably will, but right now, we are just 
looking at voluntary markets, voluntary credits, and not 
allowing for those offsets to occur.
    Mrs. Hayes. Thank you. Thank you so much, Ms. Eideberg, and 
to all the witnesses who are here today, thank you for your 
time and your thoughtful answers to these questions to help 
inform our decision making.
    That is all I have, Mr. Chairman. I yield back.
    The Chairman. Thank you, Mrs. Hayes.
    The gentleman from South Dakota, Mr. Johnson, you are now 
recognized for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman, and I thought Mr. 
Milligan asked some very good questions in his testimony, and 
then combined with Ms. Merrill's--her reminder to me of the 
2010 crash of the prices for carbon credits, it got me 
thinking. I mean, I wouldn't call myself an expert, but I am 
reasonably well-versed in how farmers can get paid, all the 
flexibilities in how they get paid when they take grain to the 
grain elevator. Sometimes the price is set then. Sometimes it 
is set later. Sometimes they get paid then. Sometimes they get 
paid later. Sometimes the ownership transfers then. Sometimes 
it transfers later. I don't really have any sense of how that 
works in the carbon credit market, and so is there--and I don't 
know whoever can answer this, but is there a standard approach, 
number one, currently in place in these voluntary markets about 
how and when producers get paid? Is there a lot of flexibility 
in that arena? And then, is there a futures market that is 
likely to develop, given this potential flexibility?
    I would love to have a couple people answer, so if nobody 
wants to take more than a minute or a minute and a half, that 
would be great.
    Ms. Reed. I can start.
    There is a futures market that already exists. The CME 
Group actually launched a carbon futures market, and they are 
the Chicago Mercantile Exchange. I think you can check that 
out. It is a recent development, and I think probably a good 
one.
    In terms of the flexibility for payments, I do think there 
is flexibility, and there are different approaches as to how 
that is achieved. Generally, however, farmers and ranchers are 
paid only once the credit is actually certified and verified, 
so it is kind of after they have done the work at the end of 
the season, if you will. That is why it is important to have 
some of those up-front USDA conservation payments.
    We actually use bill.com to pay our farmers and ranchers. 
They create an account and we just electronically deposit the 
payments that way to make it easy on them.
    Mr. Johnson. And again, I want somebody else to answer, 
too, but maybe a quick follow-up, ma'am. What if they change 
these practices and wanted to, in essence, hold on to the 
commodity themselves for a while, the credit? I mean, is there 
an ability for them to sell that 6 months later?
    Ms. Reed. Well, so I started initially talking about--we 
are not operating in traditional offset markets. We are 
operating in supply chain emission reduction markets, and those 
credits need to be utilized annually. So, there is a certain 
period of time that the company actually needs to claim them.
    In traditional carbon offset markets--and David could 
probably speak to this--they can, in fact, hold on to them. In 
our market, we actually don't sell a credit regardless until 
the farmer or rancher actually agrees for it to be sold, and I 
think that is a very important point, that this is farmer 
data--we are utilizing their farmer credits, and they should 
have a say in control over that.
    Mr. Johnson. Thank you, ma'am.
    Sir, go ahead.
    Mr. Antonioli. Yes, sir. I think that is exactly right, and 
I think it is really down to every contract if there is 
variability on that. But if a farmer wanted to keep the 
underlying commodity and sell it later at a future time, that 
would be entirely possible. It is down to the negotiation that 
happens in between the farmer and whoever is going to buy the 
credit from them.
    Mr. Johnson. So, what is most typical? I mean, because you 
just think about a farmer who probably doesn't want to maintain 
a lot of price risk, given all of the other exposure they have. 
Are most contracts for a set price into the out-years, years 2, 
3, 4?
    Mr. Antonioli. Thank you. I can't speak to that. We don't 
see the contracts themselves. We just certify the credits, so 
we don't see all the financial transactions behind them.
    Mr. Johnson. Could any of the panelists tell me what they 
think is most typical?
    Ms. Reed. I can tell you that we currently are engaging 
farmers in annual contracts while we really test the system and 
see what works best. But we are really looking at 5 year 
contracts, so that there is certainty on both sides of the 
ledger, both for the farmer and rancher who are the sellers, 
and then the buyer so that we know whatever you are looking at, 
for instance, when you join, that is your baseline and you then 
have the opportunity to sell credits on an annual basis for the 
length of that 5 year contract.
    Mr. Johnson. Yes. I am a little surprised there are not 
more multi-year contracts just because the changes in practices 
these producers put into place often are a little more 
intensive on the front-end, and I think they would want a 
multi-year ability to recoup that investment. So, perhaps that 
is a good development.
    With that, Mr. Chairman, I would yield back. Oh, I do have 
some additional questions I will submit for the record, sir.
    The Chairman. Very fine. Thank you very much.
    The gentleman from Florida, Mr. Lawson, is recognized for 5 
minutes.
    Mr. Lawson. Mr. Chairman, can you hear me?
    The Chairman. Yes, we can. Go ahead, Mr. Lawson.
    Mr. Lawson. Mr. Chairman, I want to thank you for calling 
this hearing today, you and the Ranking Member, Mr. Thompson. 
This is a very important hearing.
    To make sure I can get an answer from everyone in the small 
amount of time that we have, my question is what type--several 
of you mentioned that many aspects of the voluntary carbon 
market generates a lot of confusion because of how complex and 
diverse the different programs are. My question then would 
center around--to all of the witnesses, this will be to all of 
the witnesses. In your opinion, what would the ideal carbon 
market look like--ideal market would look like for farmers? If 
you all could comment on that, that would be greatly 
appreciated.
    Mr. Milligan. David Milligan. Thanks for the question.
    I think the ideal carbon market, the carbon sequestration 
takes place at the farm, and I think these programs have to be 
designed that the majority of that money comes back to the 
farmer. It is not like wheat or something else where it is 
transferred and it is processed and shipped and there is 
freight process and changes value. It all happens right at the 
farm. The revenue stream needs to come back to where the carbon 
creation happens.
    Ms. Reed. I will jump in and say I think very clear 
contracts for farmers and ranchers without a lot of tiny print, 
right, so that they are very understandable are really 
necessary.
    I would also say harmonized, standardized approaches for 
how, in fact, they operate and how we buy and sell credits in 
these markets are, in fact--would benefit everyone.
    Mr. Bastos. If I might, Congressman Lawson, I would say the 
following.
    So, we talk about common standards, transparency, clearly 
understandable rules for farmers. And I would say that in the 
end, it boils down to trust, right? For a market actually to 
thrive, we need to have enough trust from buyers who are 
willing to place their investments in the market, and trust 
that actually whatever they are buying is necessary, something 
that is real, and they can actually count on.
    So, I think an ideal market is a market that actually has 
trust from farmers all the way to the buyers.
    Mr. Lawson. Thank you.
    Mr. Antonioli. Can I add one element to that, which would 
be--thank you for the question, Congressman.
    I think one key aspect of an ideal market would be for the 
farmers to have confidence that the contracts that they are 
going to sign into have been vetted and that they have 
confidence that it is a real program that they are going to be 
using, and that they are going to have value from the credits 
at the end of the day.
    There are a number of different options currently on the 
market, and it can be very confusing for farmers, so having 
some clarity around that could be very, very useful.
    Mr. Lawson. Thank you.
    Ms. Eideberg. Congressman, I am happy to jump in and 
provide four suggestions for a framework and a carbon market 
that EDF would like to see.
    First, it is important that it be very transparent. Second, 
we want to make sure that we are having verified quality 
emissions coming from that marketplace and from those 
operations. Third, we want it to be profitable. We want farmers 
to continue to make money and diversify their income and see 
this as a profitable way to continue, so they will continue the 
practices on their farm. And then fourth, we want it to be 
equitable and accessible by all farmers, regardless of size, 
commodity, geography. That is hard to do, as we have heard 
before, but I think we can eventually get there.
    Thank you.
    Mr. Lawson. Okay, thank you.
    Ms. Merrill. And I would just weigh in, Congressman, to say 
that we would agree with many of those principles, but find 
that carbon markets just haven't been able to deliver on those 
many fronts, and so, we would much rather see the farm bill 
conservation programs scaled up and made accessible and focused 
on climate change so that we do have that diversity of farmers 
who can remain profitable, but can also have benefit from the 
technical assistance, financial incentives so that they can not 
only reduce carbon emissions, but also become more resilient 
through greater weather extremes.
    Mr. Lawson. Okay, thank you.
    The Chairman. The time of the gentleman has expired.
    The gentleman from Nebraska, Mr. Bacon, you are now 
recognized for 5 minutes.
    Mr. Bacon. Thank you, Mr. Chairman, and I will just start 
off by saying thanks to Ms. Spanberger. Her and I have worked 
together on the Growing Climate Solutions Act (H.R. 2820), and 
I have worked also with Senator Braun. We are trying to find 
some innovative ways to help our farmers and ranchers, and I 
think there is a lot of confusion on this particular topic, and 
myself included have some learning to do.
    So, I would like to start off with a couple of questions 
for Mr. Bastos and Ms. Eideberg. I think other industries out 
there have access to carbon credits. Our ag community has not. 
Do I have that--am I accurate with that statement?
    Ms. Eideberg. Well, I think there is access right now, but 
it is in its infancy. It can be confusing. It can be 
complicated, and if we want more farmers to have access and we 
want the environmental benefits that are going to come, then we 
need to take some more proactive steps in this space.
    Mr. Bacon. Mr. Bastos, anything to add?
    Mr. Bastos. Thank you, Congressman, for the question.
    I think I would concur with Ms. Eideberg here on this. I 
think it is very clear.
    Mr. Bacon. A follow-up to this. What is the downside for a 
corn farmer or a wheat farmer in Nebraska for this bill that we 
are working on?
    Ms. Eideberg. What is the downside?
    Mr. Bacon. There seems to be a lot of suspicion, but I 
don't see where the downside is at. I thought maybe I would ask 
you.
    Mr. Bastos. If I might, working with farmers every day as a 
company, I would say that I see very little downside. I mean, 
one of the things that I mentioned before is the need for 
technical assistance and how farmers actually can navigate that 
intersection of adopting practices, making sure they actually 
work on their farm. Every farm is actually unique by nature, so 
having technical assistance so they can actually make them work 
with the crops that reduce so they can keep yielding more, and 
at the same time do it sustainably and capture carbon, I think 
that is a need and I think this bill can actually help in that.
    Mr. Bacon. It seems to be this is removing ambiguity as 
well?
    Mr. Bastos. Yes.
    Ms. Eideberg. Yes, and I think the downside in this space 
is that if we don't act, then we are not providing the 
standards and we are not providing the measurements and we are 
not providing the technical assistance to farmers, because that 
ship has sailed. The markets are happening. Producers are 
getting involved, and we don't want poor quality credits to be 
emerging on the market. We don't want fraud to occur, and we 
don't want farmers to get shorted.
    Mr. Bacon. Mr. Antonioli, it looks like you got a follow up 
here. You want to answer something?
    Mr. Antonioli. I was going to pretty much echo what she 
said, but just add that there are currently a variety of 
different options that farmers have to generate carbon credits, 
and I think it is really important that they understand that 
the programs that they use are going to generate high value, 
real carbon credits that are going to help them in the long 
run, because those credits will have value in the market, but 
also help solve the climate crisis.
    Mr. Bacon. Does this not provide farmers an opportunity to 
improve their top line?
    Mr. Antonioli. Excuse me?
    Mr. Bacon. Does this not provide the farmers an opportunity 
to improve their top line? This is going to improve their 
margins?
    Mr. Antonioli. I think so, yes.
    Mr. Bacon. Here is another question. There seems to be 
confusion. What is the cost to the Federal Government? Is there 
a cost to the Federal Government doing this--working this bill, 
ma'am?
    Ms. Eideberg. The Senate version was scored by CBO, and 
there was no cost. There was a cost for manpower at USDA that 
$4 million is in the bill to--I think it is--yes, $4 million 
paid for out of rescissions that USDA is not spending, so it 
is--the bill is neutral by CBO scoring.
    Mr. Bacon. Ms. Eideberg, so today we are saying this is a 
government-run carbon market. It is not really. It is 
certifying other folks that will be monitoring this. Do I have 
that right?
    Ms. Eideberg. So, the bill would put USDA in the position 
to make sure that it is certifying and identifying the trusted 
advisors that farmers can go to, that they can go to a neutral 
third party and get the technical assistance and maybe the plan 
of action for how they can potentially engage in this market, 
and they know that they are getting that fair advice.
    Mr. Bacon. I just want to stress it is totally voluntary.
    Ms. Eideberg. Completely voluntary.
    Mr. Bacon. And I know that is a concern for some people.
    So, my final question with my last 39 seconds to Mr. 
Milligan with the Wheat Growers. I know the Farm Bureau has 
endorsed Ms. Spanberger's and I bill. Where do the Wheat 
Growers stand on this?
    Mr. Milligan. Well, we have a committee that is set up to 
study climate sustainability, and we will put before that 
committee, and maybe they will make a recommendation to our 
board.
    Mr. Bacon. Okay, thank you.
    With my 16 seconds left, I yield back.
    The Chairman. Thank you.
    I recognize the gentlewoman from Virginia, Ms. Spanberger, 
who is also the Chair of our Subcommittee on Conservation and 
Forestry, and is recognized for 5 minutes, and also is one of 
our outstanding leaders on the issue of climate change.
    Ms. Spanberger. Mr. Chairman, thank you so very much, and 
to our witnesses, I have actually never been more excited in a 
Committee hearing in my short time in Congress. I have been 
delighted and excited by this conversation, and I am so 
grateful to go directly after my friend and colleague, 
Congressman Bacon, who asked extraordinary questions.
    I am just so excited because what we have heard today from 
our witnesses is that climate-smart agricultural and forestry 
practices can really help reduce the risks posed by climate 
change while creating valuable revenue streams. That means 
money for the farmers and producers who choose to participate 
in voluntary, again, voluntary carbon markets, and these 
markets are driven by an ever-increasing demand among 
corporations--and thank you to the representative from Bayer 
here to bring his voice to the conversation--from corporations 
looking to invest in ways to lower their footprints as we 
transition to a zero-carbon economy, maybe someday negative 
carbon economy.
    Unfortunately, these existing private markets are often 
challenging to navigate for companies and for small farmers 
alike. This has been made clear by the conversations I have had 
with the smaller-scale producers and foresters in my district 
throughout central Virginia, and I thought that Mr. Milligan in 
his written testimony provided really important questions about 
carbon markets.
    And so, as we have heard today, there are crucial questions 
that continue to loom about the best types of protocols for 
carbon sequestration practices, and how farmers or forest 
owners who want to perhaps implement these practices and want 
to perhaps create new revenue streams for themselves can join 
these markets.
    And that is why I am so excited to work with my colleague, 
Congressman Don Bacon, to reintroduce the Growing Climate 
Solutions Act this Congress. The exciting thing is the fact 
that we have had endorsements across the board. We have lists, 
and Mr. Chairman, I submit for the record the list of entities 
that have endorsed this bill,* from the American Farm Bureau, 
the American Soybean Association, the National Potato Council, 
the National Milk Producers Federation, to industries such as 
McDonalds, Bayer, Microsoft, Chobani, to environmental groups 
like Environmental Defense Fund, the National Wildlife 
Federation, the National Audubon Society. And I will say, not 
frequently do so many Members of Congress agree on something, 
but certainly not frequently do so many organizations across 
sectors agree on something as straightforward as this bill. 
This bill would protect farmers and companies who want to 
participate in existing voluntary carbon markets by involving 
the USDA for certification. It would empower American farmers 
and forest owners to make informed choices about how to 
participate in voluntary carbon markets by really creating a 
one-stop shop for information about these markets. It would 
bring experts and trusted partners to the table alongside 
producers through the creation of a robust producer-focused and 
science-forward advisory council to make sure USDA is keeping 
up with the rapid innovations that occur in this space. And 
finally, this bill would not alter existing conservation 
programs or place undue burdens on growers or forest owners.
---------------------------------------------------------------------------
    * Editor's note: the listing of endorsers is located on p. 127.
---------------------------------------------------------------------------
    In fact, I was impressed that Ms. Eideberg in her testimony 
spoke about some of the co-benefits that actually present to 
farmers and producers, and notably, this bill also does not 
touch the funding of the Commodity Credit Corporation.
    So, I am so excited this bill passed the Senate with a vote 
of 92-8. It had tremendous support and I thank the sponsors in 
the Senate, Senator Braun and Senator Stabenow for their work 
on this bill, and I have been so enthusiastic so far that I 
have little time for questions.
    But I would like to begin. Ms. Eideberg, I know there are 
discussions about, if we are even talking about carbon markets, 
we are accepting that carbon exists. Can you discuss how 
legislation like the Growing Climate Solutions Act would help 
provide growers and producers the resources they need to make 
informed decisions about practices on their land that we know 
are credible and actually help mitigate the impact of climate 
change?
    Ms. Eideberg. Sure.
    So, producers are very interested in engaging in a type of 
voluntary market, because as you mentioned, it is a way to 
diversify income, increase their bottom line. The challenge is 
that the markets are new, contracts are complicated, finding 
ways to engage is probably going to require, in most cases, the 
help of a trusted advisor. Farmers use trusted advisors for 
everything from inputs, seed, tractors, I mean, they need help.
    So, creating this verified advisor program through USDA, 
which frankly, is very similar to how we do other programs, 
USDA just provides that technical assistance that farmers need.
    Ms. Spanberger. Thank you very much. Thank you to all of 
our witnesses for such an exciting hearing.
    Mr. Chairman, I yield back.
    The Chairman. The gentlelady from Florida, Mrs. Cammack, is 
recognized for 5 minutes.
    Mrs. Cammack. Well, thank you, Chairman Scott, Ranking 
Member Thompson, and to all of our witnesses here before us 
today.
    I am very proud to represent part of the wood basket in 
north central Florida, and just recently had a roundtable with 
my forest owners about this very issue. One of those owners I 
spoke with in my district recently described voluntary carbon 
markets as the ``Wild West.'' I have to say that I agree with 
his characterization. They have told me about the lack of 
consistent standards and the differences in returns, depending 
on the carbon exchange.
    What I think shocked me the most, however, in these 
conversations was learning from one of my constituents when 
approached by a consultant working with a carbon exchange, that 
they were going to have to pay $300,000 up front. They were 
told that they would have the opportunity to recoup this cost 
over time, but that there were no guarantees.
    So, given this account, Ms. Merrill, have you heard, if 
anything, from farmers regarding up-front costs to participate 
in carbon markets? How do these costs compare to those 
associated with participating in California's Climate-Smart Ag 
programs, or USDA's conservation programs?
    Ms. Merrill. Thank you, Congresswoman, so much for the 
question.
    Yes, we have heard about high transaction costs not only 
for the California compliance market, but also for the 
voluntary market, and that has meant largely that small, some 
mid-scale farmers simply can't get into the market. They can't 
afford it. The project evolvement and verification costs are 
simply too high, and so many simply can't afford to 
participate. What is different, of course, with the Climate-
Smart Agriculture programs is it is a grant-based program. You 
have to develop a project, fill out an application, and 
implement that project, but we have technical assistance here 
in the state to support farmers of all scales and all types of 
operations to participate in the Climate-Smart Ag programs. It 
is a grants-based program. It is modeled after the USDA farm 
bill conservation programs, which take an approach that we 
think will better meet the needs of farmers, as well as better 
meet the needs of the climate crisis. The complexities of the 
carbon market are simply too great.
    Mrs. Cammack. And I would like to ask our panelists here 
today in person, generally how are producers who may not be 
well capitalized, how are they able to enter these markets? I 
will start with you, Ms. Eideberg.
    Ms. Eideberg. I appreciate your comments because I have 
often described these markets as a Wild West as well. That 
being said, it is a perfect opportunity for Congress to step in 
and provide some clarity; to put that referee on the field, 
create some standardization, and make sure that farmers know 
exactly what they are getting into. We don't want anybody to be 
stuck with a $300,000 bill at the end of the day that they 
can't pay. That is not okay.
    So, we would welcome Congress's involvement to try to 
figure these issues out. There are a lot of different 
approaches, but if we fail to act in this space, whether that 
be giving USDA authority to take some action, Congress writing 
legislation in this space, or looking to some qualified third 
party neutral actors, I think this problem is just going to get 
worse because that ship has sailed. This is happening so what 
can we do to make sure that farmers are not coming up short?
    Mrs. Cammack. Mr. Antonioli? I caught you off guard. Sorry 
about that.
    Mr. Antonioli. Well, I was just going to say that I would 
echo that tremendously.
    The payments for real legitimate carbon credits only come 
after you have done the practices, so that, of course, doesn't 
apply that you have to invest in the technology or the--
whatever you need to implement those practices. But the idea 
that the example you mentioned I think is exactly the kind of 
challenge that you start to see more and more of if there isn't 
some consistency and some vetting of the folks who are 
providing these services and offering these things to farmers.
    Mrs. Cammack. I appreciate that. I am running short on 
time, so I am sorry. I am going to have to jump real quickly.
    Mr. Milligan, could you estimate how many of your members 
participate in carbon markets, and are there any lessons those 
members have learned?
    Mr. Milligan. I can only take a guess, but I know on the 
Committee there are some people that have had some experiences, 
whether they had it personally or not. So, I would say the 
number is very low.
    I think to your question, it has been pretty well raised 
here. It is kind of the Wild West. We need to have more 
criteria before we really know whether we are going to jump in.
    Mrs. Cammack. Excellent. I appreciate that. Thank you so 
much.
    Mr. Chairman, I yield back.
    The Chairman. The gentleman from California, Mr. Costa, who 
is also the Chairman of our Subcommittee on Livestock and 
Foreign Agriculture, is recognized now for 5 minutes.
    Mr. Costa. Thank you very much, Mr. Chairman, for holding 
this important hearing on voluntary--I underline the word 
voluntary--carbon markets in agriculture, which I think is part 
of America's agriculture future. I also want to thank our 
colleagues, Congresswoman Spanberger and Congressman Bacon, for 
introducing what I think was very important companion 
legislation to Senator Stabenow, and it is really the 
opportunity I think that we need to seize.
    Yes, I think it is the Wild West, and guess what, the Wild 
West was an opportunity for new development and new 
opportunities in America. I think what is lacking is the 
framework that this legislation provides.
    And so, Mr. Antonioli, first to begin, you talked about in 
your opening comments about goals and milestones, and I don't 
know when you could have a fully matured carbon market if you 
have determined or estimated what the potential is for American 
agriculture?
    Mr. Antonioli. I don't have the numbers of what it would 
mean in terms of--are you asking in terms of----
    Mr. Costa. In terms of the reduction of carbon footprints, 
in terms of the benefits that would accrue to agriculture that 
would benefit as a result of that. I mean, there has to be some 
research that has been done as what a fully matured carbon 
market might present to American agriculture and to improving 
the quality of our environment, I would think.
    Mr. Antonioli. Yes. I don't have those numbers to----
    Mr. Costa. Okay. Well, get them to us. They are important.
    Jeanne Merrill, you have your California experience, and I 
am a Californian. What do you think the lesson is to be learned 
based on the comments you have made here today?
    Ms. Merrill. Thank you, Congressman Costa. Good to see you 
again.
    Mr. Costa. Good to see you.
    Ms. Merrill. I think we have a lot of really important 
lessons in California, which is we have more farmers applying 
to our Climate-Smart Agriculture programs than we have funding 
for. The demand is high. Yes, we are seeing high demand for the 
voluntary markets, but as our former governor, Jerry Brown, 
would like to remind us, there are up times and there are down 
times, and we saw some pretty significant down times with the 
Chicago Climate Exchange when the bottom fell out.
    Mr. Costa. No, I know.
    Ms. Merrill. And we would expect to see some down times 
again on the voluntary market. Yet, the urgent----
    Mr. Costa. That is the nature of markets, is it not?
    Ms. Merrill. I am sorry?
    Mr. Costa. That is the nature of markets, is it not?
    Ms. Merrill. It is absolutely the nature of markets, yes.
    Mr. Costa. Let me go quickly, because I don't have a lot of 
time.
    I had a curious question here, and the Chairman and Members 
of this Committee know clearly the challenges we have had in 
the West, and the impacts of climate change with extreme 
droughts.
    We have to fallow, again, a lot of land in California. Does 
fallowing the land in and by itself allow us to participate in 
a voluntary carbon market that would bring some level of income 
in when farmers are not able to plant? Do you know?
    Ms. Merrill. I am sorry, is that for me?
    Mr. Costa. Yes, I am sorry.
    Ms. Merrill. Okay. I am not the right person to answer that 
question.
    Mr. Costa. All right, then we will move on.
    Callie Eideberg, good to see you. Callie, you talked about 
in your testimony that they need to be shovel ready in 
voluntary markets--we all agree on that--in setting standards. 
On the issue of shovel-ready, specifically what do you mean in 
terms of the standards? Do you think the legislation that has 
been introduced by my colleague here that I am supporting 
creates the framework for those standards?
    Ms. Eideberg. So, shovel-ready practices mean--I would pull 
examples like methane digesters. Those are being deployed on 
farms. Good soil health practices, like cover crops, no-till. 
Those are fantastic opportunities for farmers.
    We have seen a huge increase in cover crop adoption, but we 
are still nationally in single digits at the amount of farmers 
that have adopted cover crops.
    Mr. Costa. You should know from your previous life and 
experience, Callie, cover crops are good if you have water to 
plant the cover crop. But since we are in extreme drought 
conditions, that is not the case.
    Let me ask you the same question I asked Jeanne Merrill. If 
you have to fallow land, could you potentially qualify to 
participate in such a market?
    Ms. Eideberg. So, I think you would have to be able to go 
and actually measure the carbon sequestration in a particular 
field, and that is going to take some time. So, I think there 
is a possibility that that is--that that could occur, but it 
depends on the individual market.
    Mr. Costa. Okay. My time has about expired, but I will have 
some subsequent questions, Mr. Chairman, and again, thank you 
for this important hearing, and thank my colleague, 
Congresswoman Spanberger, for your important legislation. 
Callie, it is good to see you.
    The Chairman. The gentleman from Texas, Mr. Cloud, you are 
recognized for 5 minutes.
    Mr. Cloud. Thank you, Mr. Chairman.
    Mr. Antonioli, hopefully I am pronouncing that correct, how 
much have you been able to distribute to farmers to date?
    Mr. Antonioli. So, I am sorry, I do not have--thank you for 
the question. I am sorry, I do not have the answer to that 
question. We don't--we only certify the credits. The 
transactions and the working with the farmers is down to 
companies or technical providers, and they are the ones who end 
up working with the farmers and working with them to get the 
projects certified, which they use our services. But we don't 
have any view into what actually is--what those transactions 
are.
    Mr. Cloud. Okay.
    Mr. Antonioli. Our job is to ensure the quality of the 
credits themselves.
    Mr. Cloud. Got you.
    Mr. Bastos, your program as well, are you able to pay 
farmers? Can you speak to that, how much you have been able to 
distribute to farmers?
    Mr. Bastos. Thank you for the question, Congressman. We 
have distributed to the farmers, actually paid the farmers 
starting in July of this year, and ended up paying all of them 
by the end of September.
    Mr. Cloud. I am sorry, how much was that?
    Mr. Bastos. We actually, the total amount I don't have here 
on top of my head, but I can tell the following: We paid as 
high as $170,000 to an individual farmer.
    Mr. Cloud. Okay, and where are these funds coming from?
    Mr. Bastos. From Bayer.
    Mr. Cloud. I am sorry?
    Mr. Bastos. From Bayer's balance sheet.
    Mr. Cloud. From Bayer's--well, those funds from your 
balance sheet are coming from somewhere though. Where is that 
coming from? Where is the income to your balance sheet? 
Basically, money comes into your company, eventually leaves 
your company. What are the inputs?
    Mr. Bastos. So, we are a company that actually has 
activities in seeds and crop inputs, basically. We make those 
crop inputs that are sold to farmers, and based on the income 
that comes from those products, we actually use that----
    Mr. Cloud. But in relation to carbon markets, are you 
saying that is a loss leader for your company?
    Mr. Bastos. No. No, we actually engage with like companies 
to represent agriculture in their offset agreements to have 
farmers actually as a source of offsets for those companies.
    Mr. Cloud. Okay. Ms. Merrill, could you speak to 
transaction costs?
    Ms. Merrill. Yes. Congressman, is there a question what are 
transaction costs?
    Mr. Cloud. Well, a recent USDA report reported about ten 
percent of carbon markets go to the farmer actually, and so, we 
end up taking relatively $10 out of an industry and about $1 of 
it ends up in the farmer. And so, somewhere there is some loss 
somewhere, and my concern is if we are looking at an 
environment that we need to look at the whole environment, the 
whole world industry approach to environment, because it is a 
global environment, and so, taking $10 out of an industry that 
probably needs to be doing more investments in sustainable 
activities than the ag industry, which is probably where we get 
the green of the Green New Deal from, and $9--so, we take $10 
out of an industry that could be putting research into this: $9 
ends up into a regulatory framework somehow, and then $1 of it 
actually gets to the farmer. And so, these are being marketed 
in a sense as this great help to farmers in the basis of an 
environment, but I am just--it seems like it is an overall 
taking from the effort.
    Mr. Antonioli, do you know what has been the greatest 
driver of reduction of greenhouse gases?
    Mr. Antonioli. Thank you for the question, Congressman.
    I think it is important to recognize that carbon markets 
really complement internal reduction----
    Mr. Cloud. That is not the question I asked. The question I 
asked is what has been the greatest driver of the reduction in 
greenhouse gases?
    Mr. Antonioli. I think the greatest driver has been a real 
recognition that we need to do something about climate change.
    Mr. Cloud. It has been a [inaudible] in the natural gas 
industry. That has been the biggest driver of--and so, we are 
taking $10 out of the oil and gas industry, for example, giving 
$9 into a regulatory framework and giving $1 to a farmer. And 
it just seems to me like this is more about creating a 
regulatory critical class taking from producers, whether that 
be in the ag industry or whether that be in the oil and gas 
industry. And, we already have--there has been an important--we 
have programs already that help those adopting these practices 
early, early adopters, to help get them off the ground. And I 
would just question the voluntary carbon markets. It starts off 
voluntary, and then we ask the government to get involved, and 
then it becomes mandatory. This is just how government programs 
work, and it seems to me like the better approach would be to 
continue to practice some of the sustainable practices and 
programs that we already have.
    Thank you. I yield back.
    The Chairman. Thank you.
    And now, we reach the close of our hearing, and what a 
hearing we have had. Many of you who are on our Committee with 
your exchanges, our Members and witnesses can see, we are very 
much interested in this issue, and we appreciate each and every 
one of you. I want to thank each of you. First of all, I want 
to thank Ms. Debbie Reed, Executive Director of the Ecosystem 
Service Market Consortium. Thank you. I want to thank Mr. Leo 
Bastos, Senior Vice President, Head of Global Commercial 
Ecosystems at Bayer. I want to thank Mr. Brian Luoma, President 
and Chief Executive Officer at The Westervelt Company, on 
behalf of National Alliance of Forest Owners. Mr. David 
Antonioli, who is the Chief Executive Officer at Verra. Ms. 
Callie Eideberg, Director of Government Relations at the 
Environmental Defense Fund, and Mr. David Milligan, President 
of the National Association of Wheat Growers, and Ms. Jeanne 
Merrill, Policy Director at the California Climate and 
Agriculture Network, on behalf of National Sustainable 
Agriculture Coalition. What a wonderful help you have been to 
this Committee and the nation, many of which have been tuning 
into this. This is one of our most exciting hearings. All of 
our hearings are exciting and beneficial, but this one really 
has gotten the interest of many across the nation.
    I just want to say from my own conclusions as Chairman, you 
all have answered some of my concerns. As you know, I do 
believe, going forward, we are going to have to make sure that 
verification, measurement, how we do this with our farmers is 
really key as we determine how we engage them in the process of 
what they are doing in terms of carbon sequestration. And we 
have to be very careful on those two points of measurement and, 
of course, the verification. And again, I thank you all for 
answering my major concerns about our food security. We cannot 
allow that to even take second place to this, because that is 
what we rely on. And as many of you know, our economy in 44 of 
our states, agriculture is our most significant part of the 
economy of 50 states. So, we have a lot in our hands, and as we 
fight these raging fires, we have to find a way, because that--
if we don't find a way, at the rate that these fires are 
burning up our western forests, the floods, what happened in 
New York with the depths of the floods from the hurricanes.
    We have so much at stake here. We really appreciate you, 
and understand that the future of our agriculture is in our 
hands, and you have made a tremendous contribution this morning 
to the future of our nation, and we thank you for that.
    And so, now under the Rules of the Committee, the record of 
today's hearing--what an important hearing--will remain open 
for 10 calendar days to receive additional material and 
supplementary written responses from the witnesses to any 
question posed by a Member. Please feel free, witnesses, if 
there is additional information that would be helpful to us on 
this Committee, to formulate the right kinds of policies going 
forward, please write us at this Committee. And we thank you 
once again. God bless each and every one of you. Thank you for 
an excellent hearing, and this hearing on our Agriculture 
Committee is now adjourned. Thank you.
    [Whereupon, at 1:13 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
   Submitted Comment Letter by Hon. David Scott, a Representative in 
 Congress from Georgia; authored by Greg Morris, Senior Vice President 
    and President, Ag Services and Oilseeds, Archer Daniels Midland
April 29, 2021

  Attention: Docket ID No. USDA-2021-0003
  Submitted electronically via Regulations.gov

  Re: U.S. Department of Agriculture Notice of Request for Public 
            Comment on the Executive Order on Tackling the Climate 
            Crisis at Home and Abroad (Published March 16, 2021)

    Dear Secretary Vilsack:

    Thank you for the opportunity to comment on the request of the U.S. 
Department of Agriculture (``USDA'') for Public Comment on the 
Executive Order on Tackling the Climate Crisis at Home and Abroad 
issued on March 16, 2021 (``Proposal''). We appreciate this opportunity 
to share our insights and observations.
    ADM has a vital interest in these issues. For more than a century, 
ADM has transformed crops into products that serve the vital needs of a 
growing world. At ADM, we unlock the power of nature to provide access 
to nutrition and climate-smart products worldwide. With industry-
advancing innovations, a complete portfolio of ingredients and 
solutions, and a commitment to sustainability, we give customers an 
edge in solving the sustainability and nutritional challenges of today 
and tomorrow. We're a global leader in human and animal nutrition and 
the world's premier agricultural origination and processing company. 
Our breadth, depth, insights, facilities and logistical expertise give 
us unparalleled capabilities to make products for food, feed, health 
and wellness, industrial and energy uses.
    Across ADM's value chain, from the crops we buy to the products we 
create, we're finding new, innovative ways to sustainably feed the 
world. Last year, we embarked on Strive 35, an aggressive program to 
reduce ADM's own environmental footprint, including cutting our 
absolute greenhouse gas emissions by 25 percent within the next fifteen 
years. We continue this effort across our own operations and leverage 
our role as a major merchandiser of sustainable crops. We are focused 
on sustainable farming practices, traceability, and energy efficiency. 
Upstream, through our sustainable procurement policies and engagement 
with growers, ADM helps reduce greenhouse gas emissions and advance 
sustainable agriculture practices. Downstream, ADM researchers are 
innovating biobased material solutions and building a portfolio of 
sustainable alternatives to petroleum-based products.
    From our diverse array of products to our differentiated production 
and transportation capabilities, ADM is uniquely qualified to comment 
on the many ways climate change mitigation and resilience can be met 
through agriculture. With that introduction, ADM's specific comments 
are as follows:
1. Climate-Smart Agriculture and Forestry Questions
A1. How can USDA leverage existing policies and programs to encourage 
        voluntary adoption of agricultural practices that sequester 
        carbon, reduce greenhouse gas emissions, and ensure resiliency 
        to climate change?
    USDA has a number of existing programs at its disposal which 
encourage adoption of climate-smart agricultural practices, including, 
but not limited to the Wetlands Reserve Program (WRP), Conservation 
Reserve Program (CRP), Conservation Stewardship Program (CSP), 
Environmental Quality Incentives Program (EQIP), Wildlife Habitat 
Incentives Program (WHIP), and Grassland Reserve Program (GRP).
    However, our experience in climate-smart agriculture projects has 
highlighted the value that education and technical assistance provide 
in ensuring practice adoption goes smoothly and remains viable long-
term. As such, we recommend that any additional funding through these 
programs should be paired with adequate technical assistance to ensure 
practice retention and sustainable long-term benefits. Additional 
funding would be merited to ensure that this technical assistance is 
offered to assist small and medium farms and historically underserved 
farmers.
A2. What new strategies should USDA explore to encourage voluntary 
        adoption of climate-smart agriculture and forestry practices?
    Farmers and ranchers can be hesitant to abandon legacy practices 
for climate-smart practices if the risk and cost of change appears high 
combined with an imprecise estimation of the tangible benefit. Carbon 
reduction through practices on the farm or ranch can result in a 
monetized reward, but competing credit creation proposals from private 
entities can be hard to compare and difficult to apply to one's own 
circumstance. USDA has the opportunity to provide objective education 
to farmers and ranchers about carbon standards. Through the 
establishment of methodologies for accounting for carbon in climate-
smart practices, it would set standardized guidelines which would allow 
our sector to integrate those practices into our supply chains.
    USDA could also expand its use of public-private partnerships with 
existing initiatives to encourage broader adoption of climate-smart 
practices. ADM is already leveraging strategic partnerships to 
encourage growers to voluntarily adopt more climate-friendly management 
practices. In seeking out new opportunities, USDA could consider how it 
could better support these existing and emerging private-sector efforts 
through education and technical assistance in the regions in which 
these projects are underway. In summary, to the extent USDA can clarify 
the key definitions and measurements associated with carbon in climate-
smart practices, we believe that farmers and ranchers could better 
assess the risks and benefits associated with the voluntarily adoption 
of carbon mitigating practices. When successful pilot programs are 
ongoing, USDA can accelerate the effort by giving the pilots support 
and publicizing within the farm sector the practice outcomes and 
resulting carbon reduction.
B. How can partners and stakeholders, including state, local and Tribal 
        governments and the private-sector, work with USDA in advancing 
        climate-smart agricultural and forestry practices?
    Partnership with USDA can provide benefits by broadening the 
perspectives brought to address a challenge, by providing financial 
assistance to lower the financial burden on selected private-sector 
participants and by acting as a public policy organizer to help bring 
common perspectives across key layers of government. In each of these 
areas, the participation of USDA lowers the risk borne by all 
participants and can accelerate the uptake of best practices.
    One such partnership which both ADM and USDA are collaborating is 
the Ecosystem Services Market Consortium (ESMC), which serves to 
advance the development of a national voluntary carbon market to 
recognize and reward farmers and ranchers for their climate-smart 
agricultural practices. ESMC is working to establish many of the 
voluntary climate-smart systems that USDA has set out to achieve and is 
expected to begin operation by next year.
    ADM is also engaged in many other sustainable agriculture efforts, 
such as Field to Market and Saving Tomorrow's Agricultural Resources 
Program, that are working to advance climate-smart management practices 
on large acreage across the country. There are opportunities for 
expansion of existing programs as well as adoption of new partnership-
based efforts which could benefit from education and technical 
assistance from USDA. There are perceived risks which can arise from 
changing approaches to farming and ranching which have survived the 
test of time. Targeted financial assistance could help reduce this 
hesitancy and help the programs achieve their environmental goals.
    USDA can also demonstrate its partnership by re-energizing and 
reconfiguring existing programs like the BioPreferred Program which can 
support the development and production of climate-smart products 
through its own procurement. This could also be a mechanism to 
encourage harmonization of similar efforts at the state level, all 
enhancing the attractiveness of work to develop new product solutions 
from American agriculture.
C. How can USDA help support emerging markets for carbon and greenhouse 
        gases where agriculture and forestry can supply carbon 
        benefits?
    Significant uncertainty exists for farmers concerning the 
development of various carbon markets--particularly as it relates to 
how carbon benefits are calculated, as well as the efficacy of those 
credits and their duration. One way USDA can support emerging carbon 
markets for agriculture is to take a leadership role in establishing a 
standard for methodologies for how climate-smart agricultural practices 
are quantified. Once a standard is known by farmers and ranchers, then 
the voluntary aspects of the market can function more effectively. 
Today multiple methodologies and systems stand in competition with each 
other, and it is not easy to fully compare their benefits and 
drawbacks. This lack of clarity creates risk for the farmer which would 
be mitigated by an established USDA standard. This standard would 
define what a climate-smart agricultural practice is and how it should 
be measured. USDA need not be the only standard. USDA could also 
recognize alternative methodologies coming from the private-sector so 
long as the outcome were verifiable and comparisons across 
methodologies could be reasonably undertaken.
    In addition, USDA is well-placed to establish a variable feedstock 
scoring system to update currently used default values which may not 
incentivize farmers to undertake additional efforts to sequester 
carbon. Moreover, to do this fully, the burden on the farmer to collect 
and verify the required data over an extended period of time is high, 
and even greater uncertainty about participation exists where a farmer 
is leasing property. This need not be an obstacle which is so high as 
to discourage the effort. USDA could support this meaningfully in the 
near term by encouraging the development of data collection 
technologies which could shortcut this process, lower the burden on 
farmers and result in a variable feedstock scoring system which will 
benefit American farming for many years.
    USDA is well positioned to enhance and deepen the acceptance of 
climate-smart agriculture through embracing non-traditional tools to 
enhance the value of the output of climate-smart agriculture. For 
example, USDA could consider looking to the Federal Grain Inspection 
Service (FGIS) to assess whether there is flexibility when defining 
grain standards to identify crops produced using carbon reducing 
techniques. In this way, accurate grain standards could support the 
commoditization of climate-smart agricultural practices by rewarding 
producers in the market.
D. What data, tools, and research are needed for USDA to effectively 
        carry out climate-smart agriculture and forestry strategies?
    As the bioeconomy grows, there will be opportunities for dedicated 
crops which can meet those needs and add value to a farmer's operation 
without the need to bring additional acres into production. One example 
is covercress which serves as a cover crop between corn and soybean 
crops, and can be utilized as a low carbon fuel feedstock. USDA should 
provide additional funding for research, development and technical 
assistance for the development, utilization, and processing of these 
crops. In addition, any assistance should support the medium and long 
term benefits to ensure the uptake and confidence in the 
transformation. It would serve USDA's stated goals of supporting market 
demand in an environmentally responsible manner.
E. How can USDA encourage the voluntary adoption of climate-smart 
        agriculture and forestry practices in an efficient way, where 
        the benefits accrue to producers?
    An effective climate mitigation system needs to reflect the deeply 
integrated nature of agriculture. To ensure that the benefit flows back 
to farmers and ranchers while maximizing the environmental benefits, it 
must be approached through an aggregate, whole value chain approach. 
Piecemeal approaches are unlikely to result in widespread adoption of 
climate-smart practices and are likely to lack the self-reinforcing 
nature of a truly aggregate approach. Moreover, it would run the risk 
that agriculture's contributions to mitigating climate change remain in 
geographically isolated pockets across the agriculture value chain, 
leading to undercounting or association with other sectors seeking to 
claim the benefit to offset their practices.
    ADM currently supports supply chain projects where financial 
incentives, education and outreach, and technical assistance to the 
farmer are arranged and paid for by the supply chain partners. In this 
way, claims regarding soil health, GHG reduction, water quality 
improvement, and farm economics arise more transparently and can remain 
within the agricultural supply chain. By staying within the sector, 
they can reliably be communicated to the ultimate consumers who may 
want to support sustainability through their grocery and product 
choices.
    Carbon markets, if left unaddressed, could break the chain between 
the practices undertaken by farmers and ranchers and the ability to 
identify and trace this benefit to become a part of consumer choice. 
When the financial incentives which flow to farmers and ranchers move 
out of the supply chain, the link to the ultimate consumer is lost. In 
contrast, if the carbon reduction attribute can ``follow the bushel'' 
through the full agriculture supply chain, there can be an accurate 
accounting of the full host of environmental contributions undertaken 
by agriculture.
    Agriculture is in a unique position to be able to work 
collaboratively across the supply chain to enact and sustain change. We 
have a strong story to tell. For example, ADM is working with farmers 
and our customers to create new categories of sustainability-based 
ingredients such as carbon neutral flour from our Milling business and 
sustainably sourced soybean oil. These new products have the ability to 
create a consistent demand pull from the consumer for climate-smart 
practices if the market signal is allowed to flow through the value 
chain.
    Many industries do not have the opportunity to work within their 
supply chain to reduce their own carbon footprint. Allowing other 
industries to purchase carbon credits from agriculture to offset their 
carbon intensity results in undercounting the contribution of 
agriculture to addressing this national challenge. Moreover, it weakens 
the ability of agribusinesses, food and beverage companies and other 
consumer facing entities to collectively lower their supply chain 
carbon footprints and put in place incentives to reinforce these 
beneficial practices. By ensuring that sustainability claims are 
retained within the agriculture value chain, the consumer preference 
for sustainability attributes in a product can be delivered all the way 
back to the farm gate.
    USDA could also accelerate the adoption of climate-smart 
agricultural practices and products by implementing a Federal 
procurement policy similar to its BioPreferred Program, where a certain 
percentage of climate-smart-produced products would be required to be 
purchased in order provide additional base load demand.
2. Biofuels, Wood and Other Bioproducts, and Renewable Energy Questions
A. How should USDA utilize programs, funding and financing capacities, 
        and other authorities to encourage greater use of biofuels for 
        transportation, sustainable bioproducts (including wood 
        products), and renewable energy?
    The U.S. is a global leader in biofuels and bioproducts. As the 
U.S. moves further towards a low carbon economy, biofuels and 
bioproducts should continue to have a critical role to play in reducing 
greenhouse gas emissions. They are innovative industries with deep 
bipartisan roots in public policy which should be maintained and 
expanded--recognizing their unique role in offering an immediate low-
carbon solution, while serving as an important economic driver 
particularly for rural communities.
Biofuels
    ADM, through the successful Prime the Pump (PTP) program, along 
with nearly all the current high-volume biofuel retailers, was a proud 
partner with USDA when it announced its Biofuels Infrastructure 
Partnership (BIP) in 2015, and again in 2020 with the Higher Biofuel 
Infrastructure Incentive Program (HBIIP). By increasing the market for 
higher biofuel blends such as E15 and B20, USDA can help create more 
demand for farmers across the country and a win for American 
agriculture.
    USDA should continue funding this important program, focusing on 
projects with the lowest cost and highest volume impact to maximize its 
investment. Every additional gallon of biofuels blended today provides 
a greenhouse gas benefit over the petroleum product it replaces, 
providing immediate environmental benefits as well as additional value 
for farmers and biofuel producers.
    USDA should also continue its work updating the lifecycle analysis 
for biofuels. [I]n particular, USDA should update its assessment of soy 
oil-based biodiesel similar to USDA's 2019 corn ethanol update. 
Demonstrating the true climate benefits of today's biofuels will 
provide additional value throughout the biofuel supply chain, 
benefitting farmers, producers, and the environment.
Bioproducts
    USDA can provide the most impact for the deployment of climate-
smart bioproducts by helping to level the playing field compared with 
petroleum-based products. While loan guarantee programs can provide a 
level of financing, ultimately it only reduces the risk for the lender 
and is limited in its ability to drive technological innovation. USDA 
should consider providing incentives for the production of bioproducts, 
perhaps on a per pound basis, for the first 5 years of 
commercialization. This would not only help pay for capital 
expenditures, but also make bioproducts economically viable.
    Additionally, as noted above, an existing USDA program that has 
been underutilized is the BioPreferred program. ADM urges USDA to 
revitalize and expand the BioPreferred program so it can be utilized 
more effectively to promote the greater use of climate-smart 
bioproducts. The program is useful from a procurement standpoint. But 
it is equally as useful in its ability to increase consumer awareness 
of these eco-friendly products. In addition to these existing 
activities, there is potential for BioPreferred to act as a coordinator 
for state-level activities or programs of a similar nature to increase 
procurement and consumer awareness on a much larger scale than strictly 
Federal activities could provide. Expanded production of bioproducts 
will substantially reduce GHGs, improve water quality, divert waste 
from landfills, and improve soil health.
Renewable Energy
    Thermal energy (steam, hot water, refrigeration) is fundamental to 
the production of food, biofuels and bioproducts, and cannot be 
practically met from sources like wind and solar due to the 
inefficiency in converting electricity to thermal energy. It is 
currently one of the largest hurdles to further decarbonize the 
industrial sector, and requires a diverse portfolio of energy sources 
to provide flexibility and reliability.
    The most efficient, sustainable and cost-effective source of 
thermal energy is Combined Heat and Power (CHP), which ADM employs at 
most of our large U.S. manufacturing facilities. CHP is an energy 
efficient technology that generates electricity and captures the heat 
that would otherwise be wasted to provide thermal energy. In many cases 
CHP systems co-fire biomass to further reduce greenhouse gas emissions, 
however limitations continue to exist which prevent additional biomass 
utilization.
    Enhanced reliance on biomass is hindered by challenges in the 
sustainable collection of material at scale and developing a resilient 
supply chain which would allow for sufficient, diverse and reliable 
supplies. USDA could undertake research to identify more efficient ways 
to sustainably collect, store and transport biomass at commercial 
scale, while ensuring enough material remains on the field to benefit 
soil organic content.
    In addition, while outside the purview of USDA, the U.S. 
Environmental Protection Agency (EPA) currently fails to distinguish in 
its Clean Air Act permitting regulations between the 1 year life cycle 
of carbon dioxide emissions resulting from the use or processing of 
agricultural crops and the carbon stock emissions released by fossil 
fuel combustion. By clarifying the insignificant nature of biogenic 
carbon emissions from fermentation and similar uses of annual 
agricultural crops, EPA can spur increased domestic production of 
sustainable, advanced bioproducts and materials made from corn and 
other plant-based inputs with a wide range of environmental benefits. 
Through the ongoing collaborations between USDA and EPA, this could be 
a beneficial area of discussion.
B. How can incorporating climate-smart agriculture and forestry into 
        biofuel and bioproducts feedstock production systems support 
        rural economies and green jobs?
    Consumers have increasingly shown an interest in seeking out 
climate-friendly products. Consequently, rural economies stand to 
uniquely benefit from incorporating climate-smart practices into 
biofuel and bioproduct feedstock production systems. As the increased 
sustainability value is captured all the way back to the farm level, 
rural economies stand to benefit from increased crop values. Perhaps 
even more impactful for the longer term is the increased capital 
investment in the larger bioeconomy.
    The expanded use of renewable fuels has had a tremendously positive 
impact on rural economies and job creation. In 2020, more than 62,000 
jobs were directly associated with the ethanol industry, which 
supported an additional 242,600 indirect and induced jobs. Moreover, 
the ethanol industry spent $21.4 billion on raw materials, inputs, and 
other goods and services.
    In addition the biodiesel industry sustains 65,600 jobs and 
generates over $17 billion in annual economic activity. Every 100 
million gallon increase in U.S. biodiesel production supports an 
additional $780 million in economic activity and 3,200 jobs.
    Climate-smart bioproducts also have significant potential to 
provide additional value for corn, soybeans and other crops. This will 
not only reduce U.S. dependency on imported petroleum, but will reduce 
greenhouse gases from traditional petrochemical products, while 
providing jobs for rural economies and improving farmer revenue.
C. How can USDA support adoption and production of other renewable 
        energy technologies in rural America, such as renewable natural 
        gas from livestock, biomass power, solar, and wind?
    As stated previously, one of the challenges with biomass power is 
around the collection of material at scale and developing a supply 
chain which would allow for sufficient, diverse and reliable supplies. 
USDA could provide research funding to study more efficient ways to 
collect, store and transport biomass at commercial scale and in this 
way help biomass brow to be a reliable source of renewable energy.
    In addition, as noted above, while outside the purview of USDA, the 
U.S. Environmental Protection Agency (EPA) currently fails to 
distinguish in its Clean Air Act permitting regulations between the 1 
year life cycle of carbon dioxide emissions resulting from the use or 
processing of agricultural crops and the carbon stock emissions 
released by fossil fuel combustion. By clarifying the insignificant 
nature of biogenic carbon emissions from fermentation and similar uses 
of annual agricultural crops, EPA can spur increased domestic 
production of sustainable, advanced bioproducts and materials made from 
corn and other plant-based inputs with a wide range of environmental 
benefits.
4. Environmental Justice and Disadvantaged Communities Questions
    As USDA builds upon or creates new programs to advance climate-
smart agriculture, it can ensure they are equally accessible through 
standardization of best climate practices, and pushing them out through 
its Farm Service Agency (FSA) network. This has the opportunity to 
democratize sustainability in American agriculture.
    The smart use of sustainability in environmentally friendly 
techniques can improve the profitability of farming in these ways. USDA 
is well placed to redouble efforts to push information to smaller and 
medium size farmers which are historically underrepresented. This could 
encourage a faster uptake in climate-smart farming and ranching and lay 
out alternative pathways to profitability. This can bring resources to 
disadvantaged communities in rural America where we can better capture 
the value of environmentally friendly and climate-smart farming.
    By taking a holistic approach to the whole agriculture value chain 
and those affected by it, USDA can also have a much broader impact when 
it comes to ensuring equal participation in the agriculture of today 
and the future where our industry benefits from an enhanced and diverse 
workforce. Part of that effort is to reposition agriculture and 
reinvigorate the purpose we play to provide a more sustainable future. 
Today's agriculture reaches far beyond the scope of America's legacy 
agriculture. Innovative products which deliver nutrition is a manner 
which our pallets find desirable can further increase demand for those 
crops grown in sustainable ways. Many consumers search for ways to 
connect their food and beverages to the farmers who have labored to 
produce them. Small and medium farmers, and farmers from 
underrepresented communities, could benefit from USDA assistance in 
connecting them to consumers who would welcome this information.
    USDA should also continue its partnership with agriculture to build 
a more skilled, diverse and inclusive workforce. ADM is proud to be a 
founding member of Together We Grow--a consortium in partnership with 
USDA of modern food and agriculture companies, NGOs, and academia who 
are dedicated to this task to make American agriculture a leader for 
generations to come.
    In order for a more skilled, diverse and inclusive workforce to 
have equitable access to opportunities in the 21st century, it needs to 
be able to access technology, and in particular, the internet. American 
agriculture is connected to the global consuming world on a digital 
platform, and broadband needs to be brought to every corner of rural 
America. Like water and electricity, it is one of the essential tools 
to run an effective farming and ranching operations, and allow students 
to reach their full potential. USDA plays a critical role in Federal 
efforts to expand broadband through the ReConnect Program. USDA should 
ensure its resources are maximized to eliminate the digital divide in 
the most rapid and cost-effective manner possible.
          * * * * *
    Taken together, these actions would enhance America's commitment to 
climate-smart products and practices, strengthen our rural economies, 
and protect our environment.
    Finally, we would like to endorse and incorporate by reference the 
comments filed by the National Biodiesel Board (NBB), Growth Energy, 
National Oilseed Processors Association (NOPA), Plant Based Products 
Council (PBPC), the Corn Refiners Association (CRA), and ESMC.
            Sincerely,
            
            
Greg Morris,
Senior Vice President and President Ag Services and Oilseeds,
ADM.
                                 ______
                                 
  Submitted Letters by Hon. David Scott, a Representative in Congress 
                             from Georgia *
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    * Editor's note: items annotated with  are retained in Committee 
file.
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                                Letter 1
on behalf of sarah gallo, vice president, agriculture and environment, 
                 biotechnology innovation organization
September 23, 2021

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
Committee on Agriculture,            Committee on Agriculture,
U.S. House of Representatives,       U.S. House of Representatives,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Scott, Ranking Member Thompson, and Members of the 
Committee:

    The Biotechnology Innovation Organization (BIO) is pleased to 
submit a statement for the record to the United States House of 
Representatives Committee on Agriculture hearing entitled, ``Voluntary 
Carbon Markets in Agriculture and Forestry.''
Introduction
    BIO \1\ represents 1,000 members in a biotech ecosystem with a 
central mission--to advance public policy that supports a wide range of 
companies and academic research centers that are working to apply 
biology and technology in the energy, agriculture, manufacturing, and 
health sectors to improve the lives of people and the health of the 
planet. BIO is committed to speaking up for the millions of families 
around the globe who depend upon our success. We will drive a 
revolution that aims to cure patients, protect our climate, and nourish 
humanity.
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    \1\ https://www.bio.org/.
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Tackling Climate Change through Agriculture
    To meet the challenge of climate change, it is crucial to lead with 
science and U.S. innovation. We must incentivize the adoption of 
innovative, sustainable technologies and practices; and streamline and 
expedite regulatory pathways for breakthrough technology solutions.
    Investment and deployment of cutting-edge technologies will be 
crucial to ensure farmers, ranchers, sustainable fuel producers, and 
manufacturers are able to be part of the solution to climate change and 
maintain the U.S.'s global leadership in agriculture. This includes 
removing barriers and assisting beginning and socially disadvantaged 
farmers and ranchers to access and utilize these technologies, so all 
producers can adapt to the challenges ahead. By accelerating and 
deploying innovation, American agriculture can be resilient, self-
sustaining, and drive our economic recovery.
    BIO applauds the Committee for examining how carbon markets can 
promote resilient and sustainable supply chains across economic sectors 
including translating sustainability best practices to all 
bioindustries. If done right carbon markets will create market pull 
incentives for investment in and use of innovative technologies and 
products that fight climate change.\2\ This will enable U.S. 
agriculture to combat climate change while producing enough food, feed, 
fuel, and fiber for a growing world.
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    \2\ https://www.bio.org/strategic-vision.
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Scaling Up Carbon Markets
    To ensure voluntary carbon markets can be successful, the 
government should establish the infrastructure to measure and verify 
those carbon sequestrations at the local farm level. The government can 
and should play a catalytic role in providing guidelines for carbon 
markets to ensure credibility. Furthermore, farmers need assistance in 
understanding and accessing the current voluntary and compliance 
markets for these credits. Common sense policy will make sure that 
American agriculture continues to lead on this new frontier of climate 
change mitigation and restoration.
    The development of carbon markets can foster acceptance for new 
technologies that can further reduce the environmental impact of 
agriculture, including tools like precision plant breeding, 
biostimulants, and microbial inoculants, and enhanced animal feed with 
enzymes and other additives to reduce emissions in livestock. These 
improved agricultural practices increase crop yields and provide 
several environmental benefits including capturing nitrogen directly 
from the atmosphere and increasing root growth that binds carbon to the 
soil.
    Combined with modern agricultural techniques and sustainable 
farming practices such as planting cover crops and no-till, innovative 
technologies that enhance productivity can play a key role in 
sequestering carbon dioxide in the soil, improving soil health, and 
protecting America's waterways.
    Toward this end, BIO supports \3\ the Growing Climate Solutions Act 
(GCSA), H.R. 2820,\4\ introduced by Representatives Abigail Spanberger 
(D-VA) and Don Bacon (R-NE) \5\ and its Senate companion, S. 1251 \6\ 
introduced by Senators Mike Braun (R-IN) and Debbie Stabenow (D-MI), 
which passed the U.S. Senate with strong bipartisan support by a vote 
of 92 to 8.\7\ This bill will support America's farmers, ranchers, and 
foresters who want to adopt innovative practices that combat climate 
change while continuing to provide the world with food, feed, and 
fiber.
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    \3\ https://www.bio.org/gooddaybio-archive/good-day-bio-senate-
passes-growing-climate-solutions-act.
    \4\ https://www.congress.gov/bill/117th-congress/house-bill/2820.
    \5\ https://spanberger.house.gov/news/
documentsingle.aspx?DocumentID=3721.
    \6\ https://www.congress.gov/bill/117th-congress/senate-bill/1251.
    \7\ https://www.senate.gov/legislative/LIS/roll_call_lists/
roll_call_vote_cfm.cfm?congress=117&
session=1&vote=00251.
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Conclusion
    BIO is committed to working with the Committee, Congress, and the 
Administration to ensure the establishment of voluntary carbon markets 
will enable American agriculture to be a solution to climate change, by 
accelerating investments in sustainable innovative technologies. As 
such, we urge you to support policies like the Growing Climate 
Solutions Act to advance pioneering technology to achieve these goals. 
By incentivizing investments in innovation we can return our nation and 
the world to health and prosperity by taking bold and drastic action to 
address the climate crisis.
            Sincerely,
            
            
Sarah Gallo,
Vice President, Agriculture and Environment,
Biotechnology Innovation Organization.
                                Letter 2
on behalf of ronald w. hovsepian, president, chief executive officer & 
                 board member, indigo agriculture, inc.
September 23, 2021

    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee:

    Thank you for the opportunity to submit testimony for the hearing 
of the U.S. House Agriculture Committee on Voluntary Carbon Markets in 
Agriculture and Forestry. The Committee's leadership on this topic 
echoes the call to harness agriculture as an immediately accessible 
climate sustainability solution. We appreciate your consideration of a 
profitable role for farmers in voluntary carbon markets and how the 
government can help facilitate the growth of such markets. In doing so, 
we respectfully urge that--

   the government should not create an entirely new set of 
        rules and criteria for carbon offset creation, but instead 
        leverage the extensive work already done by respected carbon 
        programs, based on decades of U.S. and international effort and 
        collaboration among expert public and private organizations.

    Indigo Agriculture, Inc. (``Indigo'') was founded in 2014 and is 
headquartered in Boston, Massachusetts, with its commercial office 
based in Memphis, Tennessee. We have offices in Argentina, Brazil, 
Europe, and India. Indigo helps farmers reduce input costs and create 
new profitability opportunities, not only driven by microbial and soil 
health, but also driven by data sciences and artificial intelligence--
leveraging agronomy, finance, and logistics. Indigo takes a systems 
approach to agriculture and to transparent sourcing, resource 
efficiency, and resiliency for farmers while working with the industry 
partners.
    Carbon by Indigo is the first private program to quantify 
agricultural climate benefit with the highest measurable registry-
approved rigor at a global scale. Our ecosystem partner-based approach 
supports our technology to realize the large, pooled projects needed to 
move beyond carbon abatement and realize mass drawdown across 
agricultural acres. Carbon offsets represent a $42 billion revenue 
opportunity for farmers \1\ of ``tradable'' credits that is enabled by 
many players in this new industry and will require active government 
support of these constructs. As a leader in ag carbon offsets, Indigo 
is enabling and witnessing the price per credit in real time, by 35% 
over the past year, directly benefiting farmers. Our protocols are not 
narrowly focused, and they are designed to enable optionality for 
farmers. We have over 3 million acres enrolled in the pilot phase of 
our program in 23 states. For us, it's about putting the farmers first.
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    \1\ https://www.michiganfarmnews.com/growmark-indigo-ag-join-
forces-to-expand-farmer-access-to-carbon-credit-market.
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The Role of Agriculture in Climate Sustainability
    Growers and ranchers can adjust their management practices to 
reduce atmospheric greenhouse gas emissions and draw down and sequester 
atmospheric carbon dioxide. Simultaneously, climate-smart agricultural 
land management practices yield environmental and economic co-
benefits--from improvements in biodiversity and decreased 
nitrification, to enhanced grower profitability and financial 
resilience. Those benefits are compounded when practices are stacked. 
Despite these known benefits, adoption rates of climate-smart farming 
practices remain low. According to our Atlas review in 2020, between 
2017-2019, only 5.6% of U.S. growers planted cover crops, 34.3% 
practiced no-till, and 24.8% rotated crops.\2\ Less than 1% of acreage 
was managed using all three practices. The Federal Government can play 
a pivotal, catalyzing role in incentivizing increased voluntary 
adoption of these beneficial techniques, and by using new and existing 
programs to institutionalize the reality that farmers and the 
atmosphere only benefit when carbon markets adhere to high standards of 
quality, as outlined in Table 1.
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    \2\ https://www.indigoag.com/progress-report.
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    We have seen significant advancements in voluntary and compliance 
carbon markets. We've also witnessed the emergence of and progress made 
by multilateral initiatives dedicated to tackling complex policy 
issues, and to ultimately achieving alignment around high quality 
credit requirements. Across public, private, and cross-sector 
dialogues, we hear growing agreement that natural climate solutions 
(NCS), when used in conjunction with the mitigation hierarchy (i.e., 
reducing emissions before offsetting them), are essential to achieving 
our shared goals of enhancing climate sustainability through 
innovation.
    Achievement will rely on both reduction and avoidance of emissions, 
as well as on the removal of carbon dioxide from the atmosphere. NCS 
are the only affordable, scalable, and immediately implementable means 
to CO2 removal and carbon sequestration. To be effective, 
credit suppliers and buyers need to be confident that the credits 
generated and purchased are high-quality and independently verified. 
Further, the market needs to have confidence that crediting structures 
are clear, transparent, and backed by robust accounting and 
accountability. Environmental and advocacy leaders agree that 
businesses should set public plans for de-carbonization of scope 1, 2, 
and 3 emissions, reduce emissions to the maximum extent possible, 
harness high quality, registry-issued credits to offset unavoidable 
emissions, commit to long term purchase agreements for those credits, 
and always utilize transparent reporting and third-party verification 
for all activities.
    Since the enactment of the Paris Agreement in 2015, there has been 
a five-fold increase, up seven percentage points since 2019, in the 
number of Fortune 500 companies who have made public commitments to 
reduce their carbon footprints.\3\ There has been recent development 
and approval of voluntary offset project protocols around agriculture 
and land use that have been thoroughly and publicly vetted by members 
of the scientific, industry, and advocacy communities. While project, 
jurisdictional, and accounting concerns remain, these residual concerns 
should not inhibit efforts to scale carbon markets. Quality is the 
beneficial link between farmers and corporate buyers.
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    \3\ https://www.naturalcapitalpartners.com/insights/response-
required.
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Upholding Offset Quality in Agricultural Carbon Markets
    The carbon market has developed and evolved since the 1990s through 
a variety of mechanisms, both voluntary and regulatory in nature, 
producing a range of outcomes regarding scientific rigor, transparency, 
stakeholder engagement, and feasibility of implementation. While the 
market has flourished through the rise of programs which adhere to the 
highest standards (e.g., the Verified Carbon Standard, the Climate 
Action Reserve, the Western Climate Initiative), there continue to be 
credits in the marketplace which are created through less-rigorous 
approaches, resulting in lower quality credits and, ultimately, harm to 
the global atmosphere through misrepresentation to credit buyers.
    Ultimately, the Growing Climate Solutions Act--if enacted by this 
Congress--can be a mechanism to enable additional policies and programs 
that increase market confidence, liquidity, risk management, and prices 
if implemented with high-quality, registry approved, and independently 
verified standards. At a minimum, when setting criteria for government 
programs that support carbon markets, the U.S. Government should adhere 
to the common standards set by the following references:

   The GHG Protocol for Project Accounting (2005) \4\
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    \4\ https://ghgprotocol.org/standards/project-protocol.

   The Offset Quality Initiative (2008) \5\
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    \5\ https://www.c2es.org/site/assets/uploads/2008/07/ensuring-
offset-quality.pdf.

   Western Climate Initiative Offset System Essential Elements 
        Final Recommendation Paper (2010) \6\
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    \6\ https://wcitestbucket.s3.us-east-2.amazonaws.com/amazon-s3-
bucket/documents/en/wci-program-design-archive/WCI-
OffsetRecommendations-201707-EN.pdf.

   ISO 14064-2 (2019) \7\
---------------------------------------------------------------------------
    \7\ https://www.iso.org/standard/66454.html.

   ICAO CORSIA Emission Unit Eligibility Criteria (2019) \8\
---------------------------------------------------------------------------
    \8\ https://www.icao.int/environmental-protection/CORSIA/Documents/
ICAO_Document_
09.pdf.

   2019 Refinement to the 2006 IPCC Guidelines for National 
        Greenhouse Gas Inventories (2019) \9\ (regarding default and 
        emission factor-based quantification approaches)
---------------------------------------------------------------------------
    \9\ https://www.ipcc.ch/report/2019-refinement-to-the-2006-ipcc-
guidelines-for-national-greenhouse-gas-inventories/.

   ICROA Offset Standard Review Criteria (2020) \10\
---------------------------------------------------------------------------
    \10\ https://www.icroa.org/resources/Documents/
ICROA%20Offset%20Standard%20Review%20
Criteria%202020.pdf.

    In reviewing these references, common minimum standards become 
quite clear. High quality offset credits must be real, additional, 
permanent, unambiguously owned, free of leakage, and do no harm. 
Crucially, these quality criteria only function as a group. Removing 
one criterion from the list, for example additionality, ruins the 
integrity of the resulting credits, even if they conform to all other 
quality criteria. In considering how to approach offset quality, the 
U.S. government should closely consider the approach taken by the 
International Civil Aviation Organization (ICAO; a special body of the 
United Nations) when designing the offsetting rules for the Carbon 
Offsetting and Reduction Scheme for International Aviation (CORSIA). 
ICAO developed minimum quality criteria for both offset programs and 
the emissions units, consistent with the previous references listed 
above, and then invited offset programs to apply for approval. The U.S. 
government could design a similar program through which the credit 
issuing bodies could apply for approval against such quality criteria. 
This approval process would fit under the scope of the Growing Climate 
Solutions Act. Following approval, project developers would have 
clarity about how to develop projects and generate credits, which could 
then be eligible for purchase by the government or private sources. 
This will be most effective if it ultimately encourages entities to 
aggregate growers together into pools to reduce barriers to grower 
participation. By leveraging the existing carbon market infrastructure, 
we can make far more efficient use of government dollars than would be 
required to set up an entirely new certification program.
    There are specific areas of concern for carbon credits from 
agricultural land management as they relate to the minimum criteria for 
offset quality. Table 1 below discusses these areas in the context of 
the criteria defined by the Offset Quality Initiative.

  Table 1  Considerations for sourcing high quality carbon credits from
                               agriculture
------------------------------------------------------------------------
    High Quality Offsets
          Should:              Specific Considerations for Agriculture
------------------------------------------------------------------------
Be Real                      Croplands and rangelands are complex
                              ecosystems, subject to dynamic management
                              regimes in both the baseline and project
                              scenarios. Accurately quantifying GHG
                              impacts of changes to these systems is
                              difficult. The protocols and methodologies
                              used to generate credits for sale should
                              be built on rigorous science and include
                              mechanisms to account for any uncertainty
                              arising from the accounting methods
                              employed.
Be Additional                There are multiple aspects to establishing
                              additionality, including regulatory
                              surplus, the timing of the activity in
                              relation to the reporting and
                              verification, the barriers faced by the
                              farmer to implementation of new
                              activities, and the question of whether
                              the new practice(s) should be considered
                              business as usual. A high-quality program
                              and protocol should address all of these
                              aspects, either at a sector level or at a
                              project level. Only the most contemporary
                              projects should be eligible, and eligible
                              project start dates should not be static,
                              which can lead to eroding of additionality
                              for new projects in future years.
Be Based on a Realistic      Unless and until there are sufficient data
 Baseline                     available on agricultural soils and
                              emissions in the U.S. to set credible
                              performance benchmarks, the baselines for
                              agricultural projects should be structured
                              around what the GHG impacts would have
                              been had the project not occurred. Use of
                              a ``zero baseline'' where soils are simply
                              measured over time and compared to time t
                              = 0 are not credible because (a) farmers
                              on a positive trajectory may receive
                              credits without implementing any practice
                              changes; and (b) farmers on a negative
                              trajectory may not receive any credits
                              despite successfully slowing or stopping
                              the soil carbon declines. The most
                              credible approach to baselines for
                              agriculture is to compare current year GHG
                              impacts against what would have happened
                              in the current year had there been a
                              continuation of historical management
                              practices.
Be Quantified & Monitored    Some agricultural offset credits have been
                              marketed based on broad emission factors
                              that were applied with little to no field-
                              specific information involved in the
                              quantification (i.e., Tier 1 approaches).
                              USDA should ensure that any credits are
                              generated using actual field-level data,
                              collected directly from the grower(s) or
                              indirectly through other means (e.g.,
                              remote sensing). In addition, monitoring
                              of performance and permanence must be
                              required throughout the entire crediting
                              period. Credits should only be issued on
                              an ex-post basis.
Be Independently Verified    Some agricultural offset credits have been
                              marketed with no requirement for ex-post,
                              independent verification of every tonne,
                              or else no requirement to reach Reasonable
                              Assurance. All credits purchased should
                              only be issued following an ex-post
                              verification to a level of Reasonable
                              Assurance by an independent verification
                              body. Such entities should be required to
                              obtain certification or accreditation
                              under the ISO 14065 standard.\11\
\11\ https://www.iso.org/
 standard/74257.html.
Be Unambiguously Owned       There exist private, corporate agricultural
                              carbon programs which are not sufficiently
                              transparent to clearly ascertain and track
                              ownership of GHG reduction rights over
                              time, leaving open the possibility of a
                              single emission reduction being claimed by
                              multiple entities at the same time.
                              Government should only procure credits
                              which have been issued by carbon programs
                              which have sufficient rules and procedures
                              in place to ascertain ownership of GHG
                              reduction rights for all projects prior to
                              issuance, as well as tracking and
                              enforcing ownership of credits post-
                              issuance. At a minimum, ownership at the
                              time of issuance and at the time of
                              retirement should be public information.
Address Leakage              Changes to agricultural management
                              practices can potentially lead to changes
                              outside of the project area. Most
                              importantly, if the project leads to a
                              decline in yield of agricultural products,
                              some or all of that decline will be
                              balanced by yield increases (and resultant
                              emissions increases) elsewhere. Government
                              should support programs and/or protocols
                              that sufficiently address emissions
                              leakage from agricultural projects.
Address Permanence           Where agricultural carbon credits are based
                              in whole or in part on storage of carbon
                              in soils, the projects and the carbon
                              programs must effectively address the
                              permanence of the credits. The
                              internationally accepted standard for
                              permanence of carbon offsets is 100 years
                              from the year the emission reduction
                              occurred. There are several effective
                              mechanisms for ensuring permanence of the
                              credits (not necessarily permanence of
                              individual carbon atoms), but credits
                              should only be procured when reversal risk
                              is assessed and managed on a 100 year
                              timeframe.
Do No Net Harm               Certain agricultural management practices,
                              such as the introduction of livestock
                              manure, have the possibility of causing
                              new environmental harms if not managed
                              properly. Not all carbon programs are
                              transparent about how they monitor and
                              enforce against negative, non-GHG impacts
                              of the project activities. Credits must be
                              from programs which transparently and
                              effectively assess and mitigate risk of
                              negative environmental harms. Going
                              further, the USDA may want to prioritize
                              credits with demonstrable non-GHG
                              benefits. A successful agricultural carbon
                              project may have significant economic
                              benefits to low-income, rural communities.
                              This impact supports efforts to improve
                              the environmental justice attributes of
                              government climate mitigation efforts.
------------------------------------------------------------------------

    Thank you for your attention to the importance of ensuring high 
quality in voluntary carbon markets. The Federal Government can play a 
critical role in facilitating the growth of a robust voluntary carbon 
market in agriculture if it adheres to these quality criteria. We stand 
ready to work with you and are available for scientific or policy 
support. Thank you for your time and consideration of these comments.
            Sincerely, 
            
            
Ronald W. Hovsepian,
President, Chief Executive Officer & Board Member.
                                Letter 3
   on behalf of zack parisa, co-founder and chief executive officer, 
                        natural capital exchange
September 23th, 2021

  Hon. David Scott,
  Chairman
  House Committee on Agriculture
  Washington, D.C.;

  Hon. Glenn Thompson,
  Ranking Minority Member,
  House Committee on Agriculture
  Washington, D.C.

    Dear Chairman Scott and Ranking Member Thompson,

    On behalf of the Natural Capital Exchange (NCX), I am submitting 
this statement for the record to the House Committee on Agriculture's 
hearing titled, ``Voluntary Carbon Markets in Agriculture and 
Forestry.''
    First of all, thank you for the opportunity to submit our views 
regarding the need for climate-smart opportunities to create real, 
additional, and verifiable carbon sequestration as well as new revenue 
streams for forest landowners.
    NCX is a first-of-its kind, data-driven marketplace for forest 
carbon credits. We work with landowners of all sizes to generate high-
quality carbon credits and match them with buyer demand, increasing 
forest carbon on a landscape scale. This spring, we created the 
largest-ever forest carbon project by acreage in our very first market 
cycle. NCX empowers landowners to benefit from new climate-smart 
revenue streams and allows businesses and public sector organizations 
to purchase carbon credits in a market with unprecedented transparency, 
scale, and impact.
    The NCX market is built on our AI-powered Basemap, the first-ever 
comprehensive forest map of the entire U.S. Basemap uses remote sensing 
technology to measure the size and species of trees on every forested 
acre, every year. With this data, we can precisely estimate forest 
carbon sequestered by any U.S. landowner of any size, generating high-
quality and verifiable carbon credits. With zero fees, zero minimums, 
and annual contracts, our market eliminates barriers to entry for 
landowners and unlocks a gigaton-scale supply of forest carbon. Already 
this year, more than 500 landowners have committed to defer harvest on 
over 900k acres (an area larger than nearly half of all national 
forests) across 15 states, sequestering an expected 600,000 permanent 
tons of CO2.
    Consequently, both NCX and the landowners that we serve have a keen 
interest in the rules governing carbon credit validation and marketing. 
As Congress evaluates ways to maintain and improve voluntary forest and 
agriculture carbon markets (including potentially using Federal 
programs to increase forest carbon sequestration), we support efforts 
to (1) drive greater participation in voluntary carbon markets, (2) 
complement voluntary markets without competing with or destabilizing 
them, and (3) set a high bar for quality when establishing, endorsing, 
or purchasing carbon credits, in order to ensure real impact and 
instill confidence in the credit market at large. We appreciate the 
chance to work with you and your staff on these issues and would be 
glad to provide technical expertise on forest carbon measurement and 
carbon accounting.
Drive Widespread Participation in Voluntary Carbon Markets
    Many forest owners have been hamstrung by high barriers to entry 
into carbon markets, due not only to costly monitoring and verification 
frameworks but also to time-intensive requirements for participation in 
these markets, such as demanding hundred year commitments. These 
barriers prevent widespread participation of small- and medium-sized 
landowners in carbon markets and limit those markets' economic and 
environmental impact. Congress should make it a priority to ensure that 
forest landowners of all sizes can easily participate in voluntary 
carbon markets. It can do this by incentivizing lower barriers to entry 
and the development of cost-efficient verification methods.
    NCX and others in the private-sector are working on eliminating 
barriers to participation in these markets by reducing verification 
costs, increasing quality assurance, and creating a seamless user 
experience. In our experiences, forest landowners are more than willing 
to adopt climate-smart forest management when three conditions are met: 
(1) Appropriate compensation, (2) Low barriers to entry (avoiding long-
term contracts or costly measurements), and (3) Fair and real 
measurement of impact, so they know they're getting paid fairly for 
their effort.
Complement Existing Private Voluntary Carbon Markets Without Competing 
        With Them and/or Destabilizing Them
    The emerging private carbon sequestration market is constantly 
innovating, keeping pace with best practices and modeling change 
rapidly as technology improves. Congress should seek to foster that 
innovation and avoid taking steps that could stifle it. To the extent 
that Congress seeks to create Federal forest carbon programs, it should 
focus on defining the outcomes that underpin high-quality carbon 
credits, rather than creating static rules or methodologies that 
discourage innovation. This will allow the best ideas, models, and 
practices to rise to the top, rather than locking current thinking into 
program requirements, and preventing us from adapting as the field 
changes and grows. Future programs should be designed to complement 
existing private initiatives and reward them for innovation, rather 
than supplant them or tie them to old versions of rapidly changing 
technologies.
    We strongly encourage any new programs to: (1) solicit bids from 
private companies and organizations to develop and participate in such 
a marketplace, and (2) allow different kinds of products (e.g., 
different length contracts, different practices etc.) to exist on the 
marketplace.
Set a High Bar for Establishing, Endorsing, or Purchasing Carbon 
        Credits
    The United States Government, governments around the world, and 
hundreds of major corporations have set ambitious de-carbonization 
goals. Increasing carbon in forests can make a major contribution to 
achieving those goals, with one study finding they can provide around 
13% of global CO2 reductions needed by 2030.\1\ The future 
of these markets depend, however, on ensuring a strong and unassailable 
reputation for additionality, permanence and overall credit quality. To 
instill confidence in the carbon credit marketplace, to ensure that 
public dollars are spent wisely, and to enable the Federal Government 
and corporations to meet their climate targets, any Federal program 
that encourages forest carbon sequestration must utilize a rigorous and 
cost-effective verification system. Without a high bar for 
additionality through rigorous measurement and verification--both of 
ending carbon stocks and of baseline harvest activity (i.e., a 
prediction of the ``business as usual'' carbon stocks in the absence of 
any carbon payment)--we risk (1) failing to achieve the level of carbon 
removal needed to meet our national goals and (2) undermining the 
reputation of the forest carbon credit sector and its ability to be 
part of a national climate solution.
---------------------------------------------------------------------------
    \1\ Natural climate solutions. Bronson W. Griscom, Justin Adams, 
Peter W. Ellis, Richard A. Houghton, Guy Lomax, Daniela A. Miteva, 
William H. Schlesinger, David Shoch, Juha V. Siikamaki, Pete Smith, 
Peter Woodbury, Chris Zganjar, Allen Blackman, Joao Campari, Richard T. 
Conant, Christopher Delgado, Patricia Elias, Trisha Gopalakrishna, 
Marisa R. Hamsik, Mario Herrero, Joseph Kiesecker, Emily Landis, Lars 
Laestadius, Sara M. Leavitt, Susan Minnemeyer, Stephen Polasky, Peter 
Potapov, Francis E. Putz, Jonathan Sanderman, Marcel Silvius, Eva 
Wollenberg, Joseph Fargione. Proceedings of the National Academy of 
Sciences, Oct. 2017, 114 (44) 11645-11650; DOI: 10.1073/
pnas.1710465114.
---------------------------------------------------------------------------
    NCX's innovative technology and methodology makes it possible to 
measure and verify truly additional carbon sequestration for each acre 
of forest, at scale. This empowers all forest landowners to participate 
in these growing markets, helping to fight climate change as well as 
creating new revenue streams for rural communities.
    NCX appreciates the opportunity to submit this statement for the 
record, and look forward to working with the House Committee on 
Agriculture to create new opportunities for landowners, ensure future 
success of voluntary carbon markets, and help our nation meet its 
climate goals.
            Sincerely,

Zack Parisa,
Co-founder and CEO,
NCX.
                                 ______
                                 
Submitted Statements by Hon. David Scott, a Representative in Congress 
                              from Georgia
                              Statement 1
  on behalf of caryn dyson, senior policy advisor, akin gump strauss 
                            hauer & feld llp
    Today, as United Nations Climate Week begins, Qualcomm released a 
new report entitled ``Environmental sustainability and a greener 
economy: The transformative role of 5G''.\1\
---------------------------------------------------------------------------
    \1\ https://www.qualcomm.com/media/documents/files/5g-and-
sustainability-report.pdf.
---------------------------------------------------------------------------
    Spearheaded by the Corporate Responsibility and the Economic 
Strategy (``IPAG'') teams, and reviewed by investor relations, 
government affairs and 5G engineering teams, the report highlights the 
sustainability benefits of 5G technology with a call-to-action for 
joint efforts by industry and government to accelerate 5G adoption. 
Detailed use cases show how 5G enabled sustainability is an economic 
opportunity with major potential for increased revenues, profit margins 
and productivity--as well as a range of other business benefits. 
Recommendations for policy makers include accelerating the deployment 
of 5G networks and 5G uses cases, as well as enhanced investments in 5G 
technology leadership and a robust global semiconductor ecosystem, to 
ensure these urgent sustainability advantages are realized sooner.
    Key findings from the report shows the rollout of 5G in the U.S. 
alone is expected to:

   Create as many as 300,000 new green jobs by 2030. The roles 
        of data scientist, data engineering and software engineering 
        will gain traction as companies rely more and more on 5G.

   Enable the reduction of 374 million metric tons of 
        greenhouse gas emissions in the United States, which is 
        equivalent to taking 81 million passenger vehicles off U.S. 
        roads for 1 year.

   Save 410 billion gallons of water nationwide by offering 
        increased insight into usage patterns and leakage issues.

   Reduce pesticide usage in the United States by 50% with 
        unmanned aerial vehicles for remote sensing and spray 
        application.

   Increase fuel efficiency by 20% through optimized lane 
        management systems and traffic management systems enabled by C-
        V2X.

    The full report is attached and linked above. Please also see this 
article in Forbes \2\ from this morning, highlighting the report.
---------------------------------------------------------------------------
    \2\ https://www.forbes.com/sites/carolinamilanesi/2021/09/20/
qualcomms-study-highlights-5g-as-sustainability-enabler/
?sh=7af002ab2b47.
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                              attachment 1
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[https://www.forbes.com/sites/carolinamilanesi/2021/09/20/qualcomms-
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Sep. 20, 2021, 11:00 a.m. EDT
Qualcomm's Study Highlights 5G As Sustainability Enabler
Carolina Milanesi,\1\ Contributor, Consumer Tech \2\
---------------------------------------------------------------------------
    \1\ https://www.forbes.com/sites/carolinamilanesi/.
    \2\ https://www.forbes.com/consumer-tech.

          Tech analyst and storyteller, I connect the dots between 
---------------------------------------------------------------------------
        tech, brands and humans

    You might know 5G from one of the many ads American carriers have 
been pitching at us consumers, promising faster data downloads, lack of 
latency and overall better mobile experience. But 5G, the next-
generation data network, impacts much more than the little device 
always in our pocket. According to PWC, 5G will create an additional 
US$1.3tn global GDP by 2030 thanks to increased efficiencies and 
productivity that will add value across sectors.
    Today Qualcomm published a report titled ``Environmental 
sustainability and a greener economy: The transformative role of 5G'' 
\3\ that goes beyond the impact on industries efficiencies and looks at 
5G as a sustainability driver.
---------------------------------------------------------------------------
    \3\ https://www.qualcomm.com/media/documents/files/5g-and-
sustainability-report.pdf.
---------------------------------------------------------------------------
    Qualcomm has had a long-standing commitment to corporate 
responsibility in reducing the company's carbon footprint and 
developing more energy-efficient technology. As a result, energy 
efficiencies have been designed into Qualcomm's facilities so that the 
combined heat and power plants enable them to self-generate electricity 
to meet their needs and efficiently utilize the waste heat to provide 
cooling to their headquarters. Their energy-saving initiatives saved 
59,577 megawatt hours of electricity and 16,495 tons of emissions. From 
a technology perspective, Qualcomm committed to reducing power 
consumption by 10% every year in their flagship Qualcomm Snapdragon 
Mobile Platform products.
    I had the opportunity to discuss the report with Dr. Kirti Gupta, 
VP of Economic Strategy at Qualcomm. ``I am an engineer by training, 
and I see the ability we have here at Qualcomm to bring to the table 
engineers and economists as quite unique. We wanted to identify 
specific algorithms and technologies that are directly designed to 
target sustainability through environmental optimizations. We want to 
find ways to reduce the amount of signal sent, reduce interference, 
optimize the transfer of different kinds of data so that we are doing 
more with less energy'', explains Dr. Gupta.
5G Use Cases: Avoided million metric tons of GHG emissions in 2025 in 
        the United States \1\
        
        
          Qualcomm.
          Editor's note: the footnote reference (1) is not included in 
        the article. it is from the Qualcomm report chart, see above. 
        The reference is as follows: \1\ Independent analysis based on 
        data published by GSMA. ``The Enablement Effect The Impact of 
        Mobile Communications Technologies on Carbon Emission 
        Reductions'' (2019). http://www.gsma.com/betterfuture/
        wpcontent/uploads/2019/12/GSMA_Enablement_effect.pdf.

    The ability to lean on smart technology enabled by 5G to use 
natural resources more efficiently could result, according to the 
report, in a reduction of about 6% of the annual emissions. If 373 
million metric tons of GCG emissions do not mean much to you, think 
about it in terms of taking 81 million passengers vehicles off the U.S. 
roads for a year.
    Headquartered in San Diego, California, Qualcomm knows all too well 
how important it is to preserve freshwater. Meters, leak detectors and 
other sensors used on the utility network can all contribute to better 
water management. On average, 90 billion gallons of water are wasted in 
a year in the U.S. due to leakages. While smart meters are already 
available today, 5G brings speed and reliability. Dr. Gupta proudly 
tells me that ``With 5G latency gets down to 1 millisecond, less than a 
flash of the camera, and a reliability of 99.999999%. The other 
advantage 5G brings is the ability to have it deployed in rural areas, 
not only urban settings, which is mostly where you find smart meters 
today.'' Smart meters can also be helpful to monitor and manage usage 
and monitor and project water storage systems and rationing if needed.
    Even though demand for products grown without pesticides is 
increasing, most agriculture production is still very much reliant on 
the use of pesticides. In the U.S. alone, an estimated 5.1 billion 
pounds of pesticides are applied to crops every year. Unfortunately, 
very little has been done to protect farmworkers who often suffer from 
pesticide poisoning-induced headaches, nausea, shortness of breath and 
even seizures. The use of 5G-enabled drones allows for more efficient 
ad accurate pesticide spraying, which reduces the amount and frequency 
of pesticide spraying. Using drones will also positively impact 
farmworkers who can keep a safer distance from the chemicals.
    Since 2010, the U.S. Bureau of Labor Statistics (BLS) started 
collecting data on green jobs that they define both in terms of output 
and process. The output approach is about jobs created by 
establishments that produce green goods and services, while the process 
approach measures jobs created by establishments that use 
environmentally friendly production processes and practices. BLS 
categorizes green Jobs into the following: water conservation, 
sustainable forestry, biofuels, geothermal energy, environmental 
remediation, sustainability, energy auditors, recycling, electric 
vehicles, solar power and wind energy. In addition, according to 
internal economic projections run by Qualcomm, the implementation of 5G 
enabled technology such as artificial intelligence, cloud computing, 
IoT and automation will boost green jobs by creating of 300,000 new 
positions by 2030.
    The positive impact 5G will have on sustainability would not paint 
the whole picture unless one also looked at the technology itself and 
how it fared from a sustainability perspective to previous mobile 
technologies. In this respect, Qualcomm highlights a much more energy-
efficient network that is the result of focusing on techniques such as 
beamforming, device-to-device communication, mobile infrastructure 
sharing and energy harvesting.
Energy efficiency of 5G networks 


          Qualcomm.

    If you look at all the data, there is no time to waste in 
addressing climate change. The current digital transformation push and 
the rollout of 5G across the U.S. must have sustainability as a core 
business driver. With the U.S. rejoining the Paris Agreement and 
addressing global warming high in the priority list of the current 
Administration, Qualcomm is calling for more investment in research and 
policies that can benefit 5G development and deployment as well as the 
broader semiconductor industry.
    Some might be inclined to dismiss the report as a little self-
serving, coming from the company that has become synonymous with 5G. 
Yet, the opportunity to lean into 5G and what it empowers and do so 
sustainably is a real opportunity. Companies in industries such as 
manufacturing, agriculture, health, transport and construction should 
turn to Qualcomm and its engineers' brain trust and start 
experimenting. Qualcomm is spot on: there is no Planet B. What we have 
is what we have to preserve.

          Disclosure: The Heart of Tech is a research and consultancy 
        firm that engages or has engaged in research, analysis, and 
        advisory services with many technology companies, including 
        those mentioned in this column. The author does not hold any 
        equity positions with any company mentioned in this column.
                              Statement 2
on behalf of barbara p. glenn, ph.d., chief executive officer, national 
            association of state departments of agriculture
    On behalf of the National Association of State Departments of 
Agriculture (NASDA), we appreciate the opportunity to submit this 
statement outlining the priorities of state departments of agriculture 
on policies related to voluntary carbon markets in agriculture and 
forestry. We request that this statement be included in the record of 
the upcoming, September 21st hearing of the Committee on Agriculture 
focusing on ``Voluntary Carbon Markets in Agriculture and Forestry''.
    NASDA represents the commissioners, secretaries, and directors of 
the state departments of agriculture in all 50 states and four U.S. 
Territories. State departments of agriculture are responsible for a 
wide range of programs including food safety, combating the spread of 
disease, and fostering the economic vitality of our rural communities. 
Conservation and environmental protection are also among our chief 
responsibilities. Also, NASDA members are also responsible for their 
states' public forests.
    State departments of agriculture are uniquely positioned as co-
regulators with responsibilities for conservation, environmental 
protection, and the promotion of economic sustainability of farmers, 
forest owners, and ranchers to address concerns related to climate 
resilience. In this role, NASDA encourages the Committee to ensure USDA 
and state departments of agriculture work in partnership in developing 
and implementing climate-smart agriculture programs.
    In November 2020, NASDA along with several other national 
organizations representing farmers, ranchers, forest owners, the food 
sector, and environmental advocates formed the Food and Agriculture 
Climate Alliance (FACA). This alliance is dedicated to working together 
to define and promote shared climate policy priorities. On November 17, 
2020, FACA released more than 40 policy recommendations to guide the 
development of Federal climate legislation.
    Many of the FACA recommendations are reflective of NASDA priorities 
and we would ask that the Committee on Agriculture consider the 
following as part of any future legislative or oversight activities of 
the Committee:

   NASDA asks that any legislative or oversight activities 
        undertaken by the Congress related to climate focus on 
        advancing science-based outcomes.

   NASDA asks that any legislative or oversight activities 
        undertaken by the Congress promote fairness and equity within 
        the agriculture community through climate solutions.

   NASDA encourages Congress to enact and fund voluntary, 
        incentive-based climate-smart agricultural programs as part of 
        the farm bill and other legislative vehicles that consider 
        agriculture's unique role in building resiliency and climate 
        adaptation.

   NASDA asks that the Congress fund research programs and 
        forecasting tools that will help agriculture adapt to the 
        effects of a changing climate, including increased pests and 
        disease, changes in suitable cropping and livestock production 
        systems and increases in extreme weather events.

   NASDA supports expanding Federal tools, including the soil 
        health provisions of the 2018 Farm Bill, to incentivize and 
        measure soil health improvements. Soil health incentives can 
        encourage farmers to adopt practices that improve soil heath 
        and increase carbon sequestration. Improved protocols for 
        measuring the gains in soil carbon from soil health 
        improvements can support development of markets for soil carbon 
        capture and storage.

   NASDA asks that the Congress enact policies that credit 
        ongoing efforts of many farmers and ranchers that have 
        previously adapted climate-smart strategies to reduce 
        emissions, sequester carbon, and improve resiliency.

   NASDA supports the creation of voluntary, incentive-based 
        climate-smart agricultural programs that are practical, and 
        provide benefits for farmers and ranchers.

    NASDA stands ready to assist this Committee in any way possible as 
it carves a path forward on this important policy issue.
    Please contact Zachary Gihorski ([Redacted]) if you have any 
questions or would like any additional information.
                              Statement 3
 on behalf of rita hite, executive vice president, external relations 
                 and policy, american forest foundation
    On behalf of the American Forest Foundation (AFF), let me first 
thank you for the opportunity to submit this written testimony to the 
House of Representative's Agriculture Committee for the hearing titled, 
``Voluntary Carbon Markets in Agriculture and Forestry.'' AFF is a 
national conservation organization focused on delivering measurable 
conservation impact, including climate change mitigation, by empowering 
family forest owners to take action on their land.
    One in four rural Americans is a forest owner, with the average 
property size being less than 70 acres. These twenty-one million 
families and individuals own 39 percent, or 290 million acres, of 
America's forests. This is more than any other ownership type, making 
these family forest owners essential for both maintaining and enhancing 
forests for the many benefits they provide, from clean water and 
wildlife habitat to carbon sequestration and storage. This means family 
forests are already making an essential contribution toward mitigating 
climate change, and recent research and practical experience point to 
opportunities to work with family forest owners to do even more.
    America's forests and forest products already capture and store 
more than 750 million metric tons of carbon dioxide annually, which is 
equivalent to nearly 15 percent of annual U.S. carbon dioxide emissions 
generated from the burning of fossil fuels. With the right policies to 
enable voluntary action, our nation's forests can do much more, with 
some estimates pointing to the potential to double this important 
contribution to climate mitigation. Recent research by The Nature 
Conservancy points to forests as the most significant natural climate 
solution opportunity and within this, to reforestation and enhancing 
carbon management in existing forests as the two largest opportunities 
for climate-smart forestry. This study also points to enhancing carbon 
management of existing forests as one of the most cost-effective 
solutions.
    To date, family forest owners with smaller tracts--the majority of 
family forest owners--have continue to be left out of carbon market 
opportunities due to high transactional and upfront costs. Most small 
forest owners cannot afford the costs associated with entering or 
navigating the emerging opportunities presented by the carbon market. 
This is beginning to change with programs like the Family Forest Carbon 
Program (FFCP), a partnership between AFF and The Nature Conservancy 
(TNC), that is creating new pathways for private landowners to access 
markets, giving families another option to offset forest management 
costs and generate income from their land. The FFCP, with a new 
methodology that is pending approval from Verra's Verified Carbon 
Standard (VCS) Program, enables family forest owners to participate in 
climate-smart forestry actions that work for them while producing real, 
additional, measurable, verifiable, and permanent carbon credits that 
can be sold in the voluntary carbon market. The FFCP has successfully 
implemented a sustainable voluntary carbon program on a pilot basis in 
Pennsylvania, and by the end of 2022, the program aims to be working 
across twelve states in four regions of the country.
    Currently, less than one percent of acres in existing carbon 
projects are on acreages between 20 and 1,000 acres, the size range of 
the majority of family-owned properties in America. There are many 
reasons for this lack of participation in carbon markets by smaller 
landowners, including:

   Lack of knowledge and information about carbon markets--
        Carbon markets are relatively new and finding a trusted source 
        for information or guidance can be difficult.

   Program complexities--Traditional forest carbon programs are 
        complex, requiring specialized knowledge and experience to 
        participate over the required project term.

   Lengthy contract terms--To account for permanence, or the 
        assurance that carbon is permanently stored over the long-term, 
        contract terms for carbon programs often range from 30 to over 
        100 years in length, making them inherently multi-generational.

   High upfront costs--There are significant upfront costs to 
        develop a forest carbon project on an individual's property, 
        including a detailed forest inventory, comprehensive project 
        development documentation, and a third-party validation/
        verification process. Costs can easily exceed $100,000 before a 
        landowner is issued carbon credits that may be sold, a process 
        that may take 12 to 18 months depending on the carbon program.

   Loss of flexibility--Traditional forest carbon programs 
        often place constraints on forest management activities, 
        complicate the ability to transfer the property to one or more 
        heirs, and may impact the land value if the property is sold to 
        a party not interested in continuing the forest carbon project.

   Measurement of Carbon--In traditional carbon markets, the 
        landowner is responsible for the periodic monitoring and 
        verification of the carbon their forest holds over the length 
        of the project, and submitting regular written reports to a 
        carbon registry.

    For African American forest owners, whose average forest size is 
smaller than the national average at around 63 acres, there are 
additional barriers to market access, including lack of access to 
technical resources and lack of trust in government and financial 
institutions. All too often, African American and other historically-
underserved landowners also face challenges with heirs' property: land 
that is passed on through generations without a clear will and for 
which there are now multiple owners and no clear understanding of who 
can make legal decisions about the land. These combined issues have led 
to a 97 percent decline in African American landownership in the U.S. 
South. When these landowners are left out of carbon market 
opportunities, it means disproportionately climate-impacted communities 
are left out of important opportunities to take local climate action 
and access private investment in their forests.
    Despite these challenges, carbon markets are a worthy tool that can 
financially incentivize landowners to contribute to climate mitigation 
through managing their forests in ways that sequester and store more 
carbon over time. Further, Congress is uniquely positioned to not only 
remove a number of the barriers that exist to voluntary carbon market 
expansion, but to invest in an accelerated expansion of the market that 
will lead to increased private investment in rural Americans, including 
family forest owners, as well as a carbon benefit that makes a 
meaningful difference in climate mitigation.
    To enable programs such as the FFCP and other carbon markets to 
work and leverage significant private-sector funds for forest climate 
action on family forests, we recommend passage of the Rural Forest 
Markets Act (RFMA). The Rural Forest Markets Act (H.R. 3790) will 
unlock private capital by de-risking investments for private investors 
by providing credit enhancement, such as a loan or bond guarantee. This 
has already been done for a number of other commodity markets in the 
agricultural sector. This credit enhancement is essential to enabling 
the use of private investment capital, which can then be used to fund 
the significant upfront costs of climate-smart forestry actions that 
take, in some cases, decades to produce carbon that can be sold in the 
market. Without this private capital, carbon markets will be largely 
off-limits to small forest owners.
    In addition to RFMA passage, other policy tools will be essential 
for unlocking carbon markets and forests' potential in ways that 
benefit landowners, such as policies that:

   Enable government backing of emerging forest carbon markets:

     Co-invest in the production of carbon credits--Utilize 
            existing conservation programs or policies like tax 
            incentives, recognizing that many forestry practices will 
            not be paid for only with carbon market revenues, but 
            include climate- and other co-benefits.

     Serve as buyer of last resort--USDA could auction off 
            put option contracts that guarantee a minimum value for 
            future credits as another form of credit enhancement that 
            will offer assurance to investors and safeguard landowners 
            as sellers.

     Offer concessionary capital--Funds could be used as 
            the upfront capital needed for upfront forest carbon 
            management costs to be repaid or forgiven. This gives 
            investors the confidence to know that concessionary capital 
            will be the first to suffer any losses, thereby offering a 
            layer of protection for their own investment capital.

     Offer a buffer pool or insurance product--USDA could 
            help make forest carbon projects more financially viable by 
            offering a low-cost insurance product or buffer pool to 
            support these projects in the case of unintended reversals.

   Invest in the forest carbon practice science--Data and 
        inventory solutions including investment in the Forest 
        Service's Forest Inventory and Analysis (FIA) program and 
        specific investment in small-area estimation; science to 
        identify and account for the carbon around specific forest 
        practices in specific forest types; and program development 
        through funding support that can bring innovation, efficiency, 
        continuity, and credibility, and continuous improvement to 
        climate-smart forestry action.

   Support landowner engagement and technical assistance with a 
        specific focus on ensuring support for historically-underserved 
        forest owners. This is essential to help stem the loss of 
        African American family forest owners who have not had the same 
        opportunities to access markets and technical assistance.

    AFF estimates that if we can tap just 20 percent of family-owned 
forested acres by 2030, we can sequester at least 2 gigatons of 
additional carbon dioxide by the end of the century. While tapping 
family forests for climate is not by any means the only solution to 
addressing climate change, it is a critical piece as we pursue an all-
of-the-above, all-sectors approach to tackling the issue. Carbon 
markets can enable voluntary actions on the part of family forest 
owners and provide new income streams, all while enabling the private-
sector to help pay the bill.
    Thank you again for the opportunity to provide testimony. We are 
happy to follow up to offer any further details or answer any 
questions. Please feel free to contact AFF Policy Manager Robert 
Sherman at [Redacted] with any questions.
            Sincerely,
            
            
Rita Hite,
Executive Vice President, External Relations and Policy,
American Forest Foundation.
                              Statement 4
 on behalf of brent smith, vice president, marketing, sustainability & 
                     proprietary products, nutrien
    Dear Chairman Scott, Ranking Member Thompson, and Members of the 
Committee:

    Nutrien is pleased to submit a statement for the record to the 
United States House of Representatives Committee on Agriculture hearing 
entitled, ``Voluntary Carbon Markets in Agriculture and Forestry.''
Introduction
    Nutrien is taking a leading position in the evolving carbon 
ecosystem within the agriculture landscape. As a global leader in 
fertilizer manufacturing and as the largest global agricultural 
retailer, providing crop inputs and services to over 500 thousand 
growers globally, we aim to be an advocate for our grower customers 
while identifying scalable solutions to help mitigate climate impacts.
    In November 2020, we launched an end to end carbon program with the 
goal of helping our grower customers navigate the emerging voluntary 
markets. At the outset of this program, we identified core guiding 
principles to drive our actions and decisions as these markets continue 
to evolve. While these were developed specific to carbon, we feel they 
are applicable across climate-smart agriculture practices.
Nutrien Carbon Guiding Principles
   Attractive Grower Value Proposition: profitable for the 
        grower, with a clear and transparent incentive structure

   Easy Grower Participation: practical eligibility criteria, 
        with low administrative burden.

   High-Quality Carbon Outcomes: verifiable carbon outcomes, 
        quantified using proven agronomic science and following 
        standardized protocols and processes that is scalable to 
        administer.

   Broad Base of Agronomic Practices: leverage a broad base of 
        agronomic practices that reduce greenhouse gases and improve 
        soil carbon sequestration.

   ``Every Acre Counts'': incentive opportunity for practice 
        change across every acre with the potential to drive carbon 
        benefit.

   Flexible Monetization: optionality to monetize carbon 
        credits in voluntary or compliance markets, preserving multiple 
        pathways to maximize carbon value and grower profitability.

   Technology & Innovation to Accelerate: configured to embrace 
        new technology and innovation that improves program scalability 
        without sacrificing carbon outcome quality.
Emerging Voluntary Markets
    Emerging voluntary markets have created a large amount of confusion 
around carbon reductions and removals in agriculture, particularly at 
the grower level. There are a range of offers in the marketplace that 
span from independently verified and validated outcomes through carbon 
registries all the way to individual companies providing their own 
protocols and even touting the carbon benefits of specific products 
with little data to validate them. When layering in other ecosystem 
outcomes such as water or biodiversity, it creates more complexity and 
confusion at the grower level. We believe that there is an opportunity 
for the U.S. Department of Agriculture (USDA) to take a leadership role 
in defining the quality aspects of carbon reductions and removals to 
provide better clarity to all stakeholders on which protocols are 
generating verified outcomes that are actually making a difference.
    Voluntary markets exist today to support the incentivization of 
verified outcomes. Nutrien is a believer in market-based solutions and 
that scaling environmental outcomes is achievable even if they are not 
at scale today. There are specific opportunities to increase that scale 
that the Committee could assist through future policy.

          Cost to Administer. Administration and the cost to serve of 
        verifying outcomes remains a challenge to maximize value to the 
        grower. Any costs required to administer the program is value 
        that is not able to flow as an incentive to the grower. 
        Strategies that focus on reducing the cost of verifying 
        outcomes will greatly support the voluntary adoption of 
        climate-smart agriculture. We feel the one of the best ways to 
        support this is through additional research. If better public 
        data was available on environmental attributes of farmland 
        (i.e., soil organic carbon), then modeled outcomes could be 
        generated with greater certainty and lower costs of physical 
        validation. See additional commentary below.
          Voluntary Market Limitations. Current voluntary markets have 
        taken protocols for carbon reduction and removal from other 
        industries and applied those to agriculture. We view these as 
        important building blocks but the application to agriculture 
        does not always fit with the realities of nature-based systems. 
        Below are the three primary concerns that future policies could 
        support or help to address.

                  Additionality. We view every acre as having the 
                potential to reduce or remove additional carbon and 
                that the only difference is the amount based on local 
                conditions. Therefore, we view the additionality 
                threshold to be at the field level. Current protocols 
                provide for an additionality threshold at either the 
                county or other geographical level that puts an 
                artificial ceiling on the incentives for agriculture to 
                sequester more carbon. We view this as 
                counterproductive to the ultimate goal and that every 
                acre should count.
                  Past Practices. Many growers have been practicing 
                climate-smart agriculture for many years. Given that 
                the voluntary markets are only able or willing to 
                incentivize new carbon reductions or removals, these 
                growers are effectively locked out of participating 
                because they have been progressive in their thinking. 
                It also creates potential incentives to reverse these 
                practices for a period of time so that they can 
                participate in the future. These practices do continue 
                to sequester carbon and provide other ecosystem 
                services that have value and should be recognized. We 
                view this as fundamentally unfair and strategies could 
                be developed to recognize the impact of past practices 
                towards verified outcomes.
                  Permanence. Current permanence requirements range 
                from 30-100 years. We strongly feel that it is not 
                sustainable to monitor acres over this type of time 
                horizon, particularly the upper range. Growers are 
                understandably unwilling to contract for practice 
                implementation on these timelines and we believe that 
                risk options for project developers, which are limited 
                to buffer pool estimates, are not feasible to reduce 
                risk. Strategies to address the concerns of permanence 
                while making it more practically implementable and 
                addressing land ownership concerns would help to scale 
                these markets.
                  Uncertainty. In order to quantify carbon outcomes, 
                these markets are focusing on a combination of modeled 
                outcomes with physical measurements on some frequency 
                in an attempt to balance accuracy with the cost to 
                administer. However, both models and measurements 
                introduce a meaningful level of uncertainty with 
                requirements and options for both not clearly defined. 
                Additional investment in research, supported by 
                Congress, could make meaningful impacts to this 
                limitation.
Public-Private Partnerships
    We believe there is a large, untapped opportunity for public-
private partnerships in advancing the adoption of climate-smart 
agriculture. As a company operating in the private-sector, we feel 
there is an opportunity to collaborate closer with USDA on existing 
programs. A key area to focus would be on ``Technical Service 
Providers''. TSPs are currently required for several existing programs 
to provide an independent plan to the grower in order to participate. 
Private sector companies are largely excluded from being recognized as 
TSPs, although some states have done this. Streamlining the process for 
private companies and Ag retailers, that may already be certified 
through other programs like the Certified Crop Adviser (CCA), to be 
certified as TSPs has the potential to make a meaningful difference in 
the adoption of these programs across the country. That is why we 
support the Growing Climate Solutions Act, which would leverage private 
companies expertise while supporting farmers' participation in carbon 
markets, rewarding them for good environmental stewardship and 
protecting our natural resources.
    We also believe that as future policies are more fully developed, 
the private-sector can and will provide additional opportunities for 
increased adoption of these strategies as well as providing practical 
feedback on feasibility. In particular, we feel that the ag retail 
sector is uniquely positioned to help drive the adoption of new and 
existing programs given the existing relationships at the farm level 
and agronomic service mindset that exists between these companies and 
their grower customers. We feel the infrastructure exists to provide 
agronomic advice within the private-sector, including climate-smart ag 
practices, and that this infrastructure does not need to be duplicated. 
Much can be accomplished through more robust public-private 
partnerships.
Outcomes vs. Practices
    We believe that Congress has an opportunity to create a policy 
environment that supports existing markets working to scale climate-
smart agriculture. We also believe that these same strategies can 
support positive impacts to biofuels given that agriculture products 
are often the raw materials for biofuel production.
    We feel it is important to shift, over time, the focus from 
incentivizing practice adoption to incentivizing verified outcomes when 
feasible. This shift in focus will better align incentives and help to 
ensure that the overall goals of climate-smart agriculture are actually 
realized, whether those goals are related to carbon, water, or another 
environmental attribute. Additionally, we believe that by focusing on 
outcomes, it helps to drive innovation in the space as market 
participants look for new and unique ways to deliver on those desired 
outcomes.
Research & Data
    We feel that the combination of research and data is one of the key 
leverage points where Congress can make a meaningful difference in the 
adoption of climate-smart agriculture. In order to arrive at verified 
outcomes and to validate in a scalable way, more data is going to be 
required to reach more acres and lower administrative costs. We would 
recommend a focus on three key areas:
    Baselining Research: In order to participate in voluntary markets 
of reasonable quality, calibrated models based on public research is a 
requirement (backed by validating data such as soil samples). There are 
two limitations to this dynamic. First, not enough public research is 
available across geographies and cropping systems to get these models 
to a reasonable level of uncertainty. Second, each participant 
effectively has to recreate the data accumulation to calibrate its 
model. The Committee could help solve for both limitations with the 
smart use of carbon specific research funding and/or incentives for 
growers to provide their data that meets a USDA standard.
    Moving Beyond Practices: We believe there will be a natural 
evolution of the emerging markets for carbon outcomes. Today, we are 
focused on practice changes. As things evolve and improve, the market 
will move from practices to products and eventually genetics. Congress 
has an opportunity to direct USDA to set the framework and support the 
research to accelerate ``carbon scoring'' of products that when 
properly used lead to outsized carbon reduction or removal gains.
    Reinvestment in National Data: Having local and actionable data 
across the country will be imperative to successfully driving change 
where the biggest opportunities exist for climate-smart agriculture. 
Congress has an opportunity to reinvest in USDA's national data 
infrastructure. Today, much of this data is out of date or simply 
doesn't exist for the intended purpose of climate-smart agriculture. A 
couple of examples would be ERS and the Rapid Carbon Assessment data 
completed in 2011 under the Obama Administration but was never 
replicated or updated. Having a national data source for performance 
benchmarking of soil carbon would be tremendously valuable to driving 
adoption. There are certainly many other examples of where national 
datasets would improve the nation's ability to accelerate climate-smart 
agriculture.
Existing Programs
    Existing USDA [conservation] programs run by NRCS (EQIP, CSP, CRP, 
ACEP, and RCPP) are powerful tools which make an impact on practice 
changes in the field. We believe that these programs can continue to be 
enhanced with clear guidance on how they can support and be 
complementary to evolving carbon and ecosystem service markets. We feel 
these programs and markets should be complementary and not competitive.
    Additionally, we feel there are opportunities for these USDA 
programs to become more streamlined and easier to administer. The 
largest hurdle we hear about from our grower customers to engaging in 
existing programs is the complexity and administrative requirements to 
engage. In order to leverage existing policies and programs, the burden 
to participate should be lowered. We feel there is an opportunity to 
increase clarity on eligibility and grower benefits for existing 
programs while also reducing the complexity to participate, making it 
easier for the grower. We also understand that there are capacity 
constraints in administering these programs. While additional Federal 
funding could be a solution, we see an opportunity for public-private 
partnerships to fill this need (see additional comments in the next 
section).
    Finally, where programs can have consistency at the Federal level 
vs. state level, industry would be better able to support scaling 
voluntary adoption of existing programs. For example, NRCS programs are 
set at the Federal level but often implemented at the state level. This 
can cause meaningful differences from state to state. As a national ag 
retailer, this makes it more difficult to support the scaling of these 
programs with our customers.
    We are thankful for the opportunity to comment on an issue that is 
important to Nutrien, our farmer customers, and the agricultural 
industry as a whole. We appreciate the interest of Congress in the role 
of voluntary carbon markets in rewarding producers for implementing 
sustainable farming practices, and we look forward to working with the 
Committee as you develop and implement climate-smart ag policies.
                              Statement 5
       on behalf of farmer's business network, inc. and gradable
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, Farmers Business Network, Inc. (FBN') and 
Gradable' welcome the leadership of the House Agriculture 
Committee on voluntary carbon markets, which ultimately have the 
potential to help producers to receive recognition in the marketplace 
for the important stewardship work and premium practices that they are 
implementing on the farm. We are excited for the opportunity to support 
the work of the Committee in reviewing the current status of the market 
and the best available emerging science, especially in service of 
helping to inform future policy development.
    FBN is an independent ag tech platform and farmer-to-farmer network 
with a mission to power the prosperity of family farmers around the 
world, while working towards a sustainable future. Gradable, launched 
by Farmers Business Network, provides new technology and services that 
facilitate the scoring, sourcing, and pricing of Low-Carbon Grain, 
making environmental transparency in the grain industry a reality now. 
Gradable enables comprehensive environmental transparency by tracking 
Scope 1 and 3 emissions, while supporting a market for premium, 
environmentally scored grain. Gradable also provides buying 
intelligence software that directly connects farmers with consumer-
packaged goods companies, animal feed providers, biofuel makers and the 
world's other major grain buyers.
    We are supporters of and commend the development of the Growing 
Climate Solutions Act. We welcome any voluntary program that allows 
growers to receive compensation for environmental stewardship practices 
that they implement on their land, and hope that the bill will help to 
highlight and grow the successful supply chain programs that growers 
are already finding valuable today. Another important component of this 
work is the investment in and coordination of research--which is 
critical to ensuring that the value of climate work is centered in and 
retained by growers.
    We would ask to submit, for the record, the attached analysis for 
the Committee's consideration, showing the value of independent 
variable scoring methodologies to this work. The attached analysis 
outlines our belief that there are scientifically verifiable paths 
emerging presently that make variable scoring an attractive approach 
for achieving greater de-carbonization throughout the agricultural 
supply chain and the basis for farmers to receive direct financial 
incentives for their voluntary climate and environmentally sustainable 
practices.
About FBN
    Farmers Business Network, Inc. is an independent ag tech platform 
and farmer-to-farmer network with a mission to power the prosperity of 
family farmers around the world, while working towards a sustainable 
future. Its Farmers First' promise has attracted over 27,000 
members to the network with a common goal of maximizing their farm's 
profit potential. FBN has set out to redefine value and convenience for 
farmers by helping reduce the cost of production and maximize the value 
of their crops. The FBN network has grown to cover more than 70 million 
acres of member farms in the U.S., Canada, and Australia. To learn 
more, visit: www.fbn.com.
                               attachment
























                                 ______
                                 
   Submitted News Release by Hon. Cheri Bustos, a Representative in 
                         Congress from Illinois
[https://press.growmark.com/growmark-and-indigo-ag-join-forces-to-
expand-farmers-access-to-carbon-farming-opportunity]


GROWMARK and Indigo Ag Join Forces to Expand Farmers' Access to Carbon 
        Farming Opportunity
Collaboration Reflects Progress in Establishing High-Quality Carbon 
        Credits As a New Crop for Farmers
    August 10, 2021 (Bloomington, IL and Memphis, TN)--GROWMARK,\1\ a 
farmer-owned cooperative focused on the success of its customers, and 
Indigo Ag,\2\ a company leveraging nature and technology to unlock 
economic and environmental progress in agriculture, today announced a 
joint effort to spur participation in the growing market for 
agricultural carbon. Under this collaboration, the GROWMARK System's 
network of FS branded retailers will help farmers navigate an 
increasingly complex soil carbon market and confidently get started on 
their carbon farming journey with the only high-quality, third-party 
verified credit program in operation today: Carbon by Indigo.\3\
---------------------------------------------------------------------------
    \1\ https://www.growmark.com/.
    \2\ https://www.indigoag.com/.
    \3\ https://www.indigoag.com/carbon.
---------------------------------------------------------------------------
    The GROWMARK System and Indigo together will provide farmer owners 
with the end-to-end support necessary to succeed in the agricultural 
carbon opportunity. Participating FS retailers will help farmers 
evaluate and enroll in Carbon by Indigo and implement beneficial 
farming practices proven to sequester carbon and abate greenhouse gas 
emissions. Upon enrollment, Indigo will leverage its advanced 
capabilities for measuring and verifying on-farm environmental impact 
at scale to translate the effects of farmers' efforts into a new source 
of revenue in the form of premium carbon credits.
    ``The opportunity for farmers to benefit from public demand for 
high-quality carbon credits is tremendous,'' said Mark Orr, Vice 
President, Agronomy, GROWMARK. ``We're proud to work with Indigo to 
provide our farmer partners with a simple and informed path to generate 
maximum revenue for their efforts.''
    The two companies are joined in a mutual effort to ensure farmers 
are equipped with informed guidance as they contemplate participating 
in the carbon market and, if they do choose to enroll, are supported 
with the resources and knowledge to maximize their agronomic, 
environmental, and financial success. Building on Carbon by Indigo's 
distinct focus on ensuring informed decision making,\4\ the GROWMARK 
System partnership enables farmers to confidently work with partners 
they know and trust to help them make the right decisions for their 
unique operation. Combining the extensive expertise of the GROWMARK 
System's network of trained agronomists with Indigo's experience 
operationalizing the demanding measurement and third-party verification 
standards set by leading global credit registries, the industry 
collaboration provides a simple and viable path for farmers to succeed 
with carbon in the long-term.
---------------------------------------------------------------------------
    \4\ https://www.indigoag.com/pages/news/indigo-ag-debuts-new-
identity-for-its-industry-leading-carbon-farming-program-carbon-by-
indigo.
---------------------------------------------------------------------------
    ``FS retailers in the GROWMARK System are proven industry leaders 
in offering trusted expertise to help farmers interpret and simplify 
the complexities of modern agriculture, and they do so over a broad 
geographical footprint,'' said Chris Harbourt, Global Head of Carbon at 
Indigo Ag. ``We are excited to be working with GROWMARK and FS 
retailers to help further farmers' understanding of the fast-growing 
carbon farming landscape and support the development of the market to 
adequately reflect the value of farmers' environmental contributions.''
    As demand for voluntary ag carbon credits grows into an estimated 
$42 billion farmer opportunity, Indigo and the GROWMARK System--which 
continues to focus on identifying and supporting new paths for climate 
positive practices under its Endure sustainability initiative \5\--are 
working to ensure farmers maximize the long-term profitability 
potential of their participation. A focus on high-quality credit 
generation is critical to this effort and to carbon credits' 
effectiveness as an outcomes-based approach to catalyze adoption of 
beneficial farming practices at scale. Carbon by Indigo's work to 
generate premium credits has in turn cultivated a network of premium 
credit buyers (including global brands like JPMorgan Chase, Ralph 
Lauren Corporation, The North Face, and Barclays) and resulted in a 35% 
increase in the price of Carbon by Indigo credits over the last year.
---------------------------------------------------------------------------
    \5\ https://view.joomag.com/endure-brochure-2020/
0941432001599172795.
---------------------------------------------------------------------------
    You can learn more about GROWMARK here \6\ and Carbon by Indigo 
here.\7\
---------------------------------------------------------------------------
    \6\ https://www.growmark.com/.
    \7\ https://www.indigoag.com/carbon/for-farmers.
---------------------------------------------------------------------------
About GROWMARK, Inc.
    GROWMARK is an agricultural cooperative serving almost 400,000 
customers across North America, providing agronomy, energy, facility 
engineering and construction, and logistics products and services, as 
well as grain marketing and risk management services. Headquartered in 
Bloomington, Illinois, GROWMARK owns the FS trademark, which is used by 
member cooperatives. GROWMARK also owns and operates SEEDWAY, the 
largest full-line seed company in the United States. More information 
is available at growmark.com.
About Indigo Ag
    Indigo Ag improves grower profitability, environmental 
sustainability, and consumer health through the use of nature-based and 
digital technologies. The company's core offerings--Biologicals, 
Carbon, Marketplace, and Transport--integrate across the supply chain 
to optimize how the world's most impact crops are produced, sourced, 
and distributed. Founded in 2014 with a mission of harnessing nature to 
help farmers sustainably feed the planet, today the company's 
technology connects stakeholders across the agricultural ecosystem to 
unlock sustainability and profitability benefits for all. Indigo Ag is 
headquartered in Boston, MA, with additional offices in Memphis, TN; 
Research Triangle Park, NC; Sao Paulo, Brazil; and Basel, Switzerland.

          Chris Grogan, Manager, Publications and Media Relations, 
        GROWMARK, Inc.
                                 ______
                                 
 Submitted Material by Hon. Abigail Davis Spanberger, a Representative 
                       in Congress from Virginia

                Growing Climate Solutions Act Supporters
 
 
 
Accelergy Corporation    Environmental Defense    National Pork
                          Fund                     Producers Council
Aequor                   Evangelical              National Potato
                          Environmental Network    Council
Agree Economic +         Farm Credit Council      National Sorghum
 Environmental Risk      Farm Journal Foundation   Producers
 Coalition                                        National Venture
                                                   Capital Association
Agricultural Retailers   Farmers Business         National Wildlife
 Association              Network                  Federation
Agriculture & Applied    Florida Farm Bureau      National Woodland
 Economics Association    Federation               Owners Association
                         FMI--The Food Industry   Nestle USA
                          Association
AgSpire                  Food and Agriculture     New Mexico Farm and
                          Climate Alliance         Livestock Bureau
Alabama Farmers          Forest Stewards Guild    New York Farm Bureau
 Federation
American Agriculture     General Mills            Newtrient
 Movement
American Association of  Global Cold Chain        No Evil Foods
 Veterinary Medical       Alliance                North American Meat
 Colleges                Good Karma Foods          Institute
American Biogas Council  Gradable                 North American
                                                   Millers' Association
American Conservation    Green Plains             North Carolina Farm
 Coalition                                         Bureau Federation
American Farm Bureau     Growth Energy            North Dakota Grain
 Federation                                        Growers Association
American Farmland Trust  Horizon Organic          Novozymes
American Feed Industry   Hungry Planet, Inc.      Nutrien
 Association
American Forest          Illinois Farm Bureau     Ocean Hugger Foods,
 Foundation                                        Inc.
American Forests         Impossible Foods         Ocean Spray
American Mushroom        Indiana Agriculture      Ohio Farm Bureau
 Institute                Coalition for            Federation
American Public Gas       Renewable Energy        Oklahoma Farm Bureau
 Association
American Seed Trade      Indiana Corn and Soy     Organic Trade
 Association                                       Association
American Sheep Industry  Indiana Farm Bureau      Outstanding Foods
 Association
American Society of      Indigo                   Pennsylvania Farm
 Animal Science                                    Bureau
American Soybean         International Emissions  PepsiCo
 Association              Trading Association     Pheasants Forever
American Sugar Alliance
Anuvia                   Iowa Farm Bureau         Quail Forever
Archer Daniels Midland   Kellogg Company          Revolution Gelato
 Company
Arizona Farm Bureau      Kentucky Farm Bureau     Rhode Island
 Federation              Land O Lakes              Department of
Association of                                     Environmental
 Equipment                                         Management
 Manufacturers
Association of Public &  Land Trust Alliance      Rural & Agriculture
 Land-grant              Louisiana Farm Bureau     Council of America
 Universities             Federation              Rural Voices for
                                                   Conservation
                                                   Coalition
Audubon New York         Mars, Inc.               S2G Ventures
Bayer                    McDonalds                Shellfish Growers
                                                   Climate Coalition
Ben & Jerry's            Michigan Agribusiness    Society for Range
                          Association              Management
Benson Hill, Inc.        Michigan Chapter--The    Society of American
Biological Products       Nature Conservancy       Foresters
 Industry Alliance                                Stonyfield Farms
Biotechnology            Michigan Farm Bureau     Supporters of
 Innovation              Michigan Milk Producers   Agricultural Research
 Organization                                      (SoAR) Foundation
Bipartisan Policy
 Center Action
Boehringer Ingleheim     Michigan State           Sustainable Food
 Animal Health            University               Policy Alliance
Bunge                    Microsoft                Syngenta
Califia Farms            Millborn Seeds           The Federation of
                                                   Southern Cooperatives
California Farm Bureau   Minnesota Farm Bureau    The Fertilizer
 Federation                                        Institute
Cargill                  Mondelez International   The National Institute
Center for Climate and   National Alliance of      for Animal
 Energy Solutions         Forest Owners            Agriculture
Center for Rural         National Alliance of     The Nature Conservancy
 Affairs                  Forest Owners
Center for Sustainable   National Association     The Tofurky Company
 Climate Solutions        for the Advancement of  Theodore Roosevelt
CERES                     Animal Science           Conservation
Chobani                  National Association of   Partnership
Citizens Climate Lobby    State Departments of    Trout Unlimited
                          Agriculture
Citizens for             National Association of  Tyson
 Responsible Energy       State Foresters
 Solutions
Climate Leadership       National Association of  U.S. Chamber of
 Council                  University Forest        Commerce
CocoNifty                 Resource Programs       U.S. Durum Growers
                                                   Association
Colorado Farm Bureau     National Audubon         U.S. Hemp Roundtable
                          Society
Composite Panel          National Biodiesel       Unilever North America
 Association              Board
ConservAmerica           National Cattlemen's     United States
                          Beef Association         Cattlemen's
                                                   Association
Corn Refiners            National Cooperative     Upfield
 Association              Business Association
Corteva                  National Corn Growers    USA Rice
                          Association
Crop Insurance and       National Cotton Council  USA Rice
 Reinsurance Bureau
CropLife America         National Council of      Vermont Farm Bureau
                          Farmer Cooperatives
Danone North America     National Farmers Union   Walmart
Ducks Unlimited          National Grange          Western Landowners
                                                   Alliance
Ecosystem Service        National Hemp            Yum! Brands
 Market Consortium        Association
National Oilseed         National Milk Producers  Yum! Brands
 Processors Association   Federation
 

                                 ______
                                 
Supplementary Material Submitted by Debbie Reed, Executive Director and 
 Member, Board of Directors, Ecosystem Services Market Consortium and 
                 Ecosystems Market Research Consortium
Insert
          Mr. Carbajal. . . .
          Ms. Reed, what additional measures, what additional outreach 
        can be conducted to incentivize and to reach out to more 
        farmers and ranchers interested in participating in carbon 
        markets throughout our country, and certainly the Central Coast 
        that I represent?
          Ms. Reed. Yes, thank you.
          I think in the Central Coast in particular, what we need is 
        more data actually for specialty crops. We don't have a lot of 
        information about specialty crops and really how to quantify 
        the impacts of improved management practices in specialty 
        crops. I think that is one major thing that USDA could do is 
        additional research there, and additional support in those 
        production systems for--whether it is wine grape growers, for 
        instance, or almond orchards, to understand what practices make 
        them more resilient and can improve soil carbon sequestration 
        and water holding capacity, et cetera.
          I think additionally, though, farmers and ranchers need to 
        understand what are the roles and responsibilities they take on 
        when they participate in these markets, so that they have a 
        very clear vision of what is going to be required of them----
          The Chairman. The time has expired. You can provide an answer 
        in writing.
          Mr. Carbajal. Thank you, Mr. Chairman.

    The best way to conduct outreach is for USDA to provide funding for 
more widespread conservation technical assistance to farmers and 
ranchers who are interested in participating in these carbon markets. 
USDA does not currently have the capacity to conduct technical 
assistance on the scale needed to usher in further climate-smart 
agriculture techniques in time to meet our global climate commitments. 
We are encouraged by USDA's recent announcement of its proposed 
Climate-Smart Agriculture and Forestry Partnership Program but it 
remains to be seen whether that program will provide needed, place-
based conservation technical assistance that is tailored to specific 
soil types and growing systems. There are private-sector and civil 
society technical assistance providers who do this work, such as the 
Certified Crop Advisors (CCA), who could aid efforts to do outreach to 
farmers but Congress could do more to incentivize those public-private 
partnerships, whether in the next farm bill or through other 
legislation currently under consideration, to scale up climate-smart 
agricultural and conservation practices across American farms and 
ranches.
    Additionally, the Growing Climate Solutions Act has provisions that 
would help connect farmers with the technical assistance they need to 
adapt their production systems in ways that could generate 
environmental credits to be sold on carbon and other ecosystem services 
markets. Passage of the GCSA, through regular order to allow for 
additional compromises, should be a priority for the Committee and 
Congress. ESMC supports passage of the GCSA and is encouraged by the 
overwhelming bipartisan support for this bill.
                                 ______
                                 
 Supplementary Material Submitted by Brian Luoma, President and Chief 
   Executive Officer, The Westervelt Company; on behalf of National 
                       Alliance of Forest Owners
Insert 1
          Ms. Kuster. Great. Thank you.
          My time is very limited, so just quickly, Mr. Luoma, can you 
        speak to how participation in private carbon markets has helped 
        your company and others provide good stewardship of our forests 
        with enhanced financial viability?
          Mr. Luoma. Yes, thank you, Representative, for the question. 
        It is a good question.
          As we have been talking about right along on the agriculture 
        side, the same holds true on the forestry side in terms of 
        voluntary participation. So, these----
          The Chairman. The time has expired. Excuse, but we are on a 
        schedule and an answer could be provided in writing, if you 
        don't mind.
          Ms. Kuster. I will yield back, Mr. Chairman.
          Mr. Luoma. Will do.

    At The Westervelt Company, we own and manage both forests and 
mills. Forest owners seek to optimize the use of their working forests 
and the sustainable natural resource they provide. Forests that are 
highly productive for products will continue to provide wood for mills.
    But almost all private working forest owners own land that isn't 
ideal for growing 2x4s--whether that's marginal lands or regions where 
marketable timber may not be the top priority, or in communities that 
no longer have the local manufacturing infrastructure to use trees. 
These forests are used for other purposes and may be used for carbon.
    One of the reasons we talk about markets for forest carbon and wood 
construction in tandem is because they are part of one system, and we 
have to take a whole system approach to optimize carbon storage and 
sequestration. The bottom line is that, when it comes to carbon, we are 
looking for additional markets, not replacement markets.
    Forest owners know how to grow trees--we're the best in the world. 
If there can be more clarity, certainty, and reduced complexity in the 
carbon market, we see huge opportunity to grow more trees. Everyone I 
talk to wants these programs to work. They want everyone involved to 
have confidence in the market.
    If a voluntary carbon market can bring a new revenue stream to 
forest owners, especially on marginal lands not suited for lumber 
production, forest owners will be able to make the significant 
investments necessary to bring those lands to their full carbon 
sequestration and storage potential.
Insert 2
          Mr. LaMalfa. . . .
          I have a question for Mr. Luoma, obviously, we have had 
        plenty of wildfire out in the West and are running into issues 
        of the burn scar basically affecting just about everything. So, 
        in order to protect the carbon credits, we need to have the 
        asset that has been set aside as a credit area continue to 
        exist. But, the fires don't distinguish between these 
        boundaries, so carbon credit areas can be affected by fire. So, 
        one known as the Colville IFM project has burned during what is 
        called the Bootleg Fire. This happens to be on the Oregon side, 
        but there are many, many acres up there I believe would add up 
        as far as offsets in terms of tons was 14 million tons of 
        offset just this last August on the Bootleg Fire that was used 
        in the California markets for carbon compliance.
          * * * * *
          Mr. LaMalfa. Mr. Luoma, again, our time goes so fast here, 
        and I am sorry about it, but I appreciate that thought that the 
        forest needs to continue to be working in order to be effective 
        on that. If we just dedicate it as a set aside and then never 
        touch it, once again, you're going to have the same problem we 
        have in a lot of the forested areas. So, it has to be working 
        landscape no matter if it is a set aside or not.
          But, could you maybe offline give us some more ideas on what 
        the alternatives are? Because you have X amount of acres set 
        aside for this carbon credit area and it did burn, we would 
        probably have to have something more defined as what the 
        alternative would be. We can't have maybe two blocks of land in 
        order to do it in case one burns. I don't know if that would be 
        practical. So, let me thank you, Mr. Luoma.

    Fire has always been a natural part of forest ecology in North 
America. Severe wildfires like those we see in national headlines are 
not, and they are a significant source of emissions. The EPA estimates 
that annual wildfires emit around 140 million metric tons of carbon 
annually, although that number varies from year to year. Wildfire is a 
challenge in drier forests in the West, but it is not a significant 
factor in the South where we operate. Fire is not unexpected, so all 
forest carbon protocols include a buffer pool. A buffer pool includes 
extra sequestered and stored carbon that participants draw on in case 
of a loss. Buffer pools act like an insurance policy and don't count 
toward carbon removals unless they are used.
Insert 3
          Ms. Schrier. . . .
          I have some questions for Brian Luoma. Mr. Luoma, in your 
        testimony you mentioned the challenge of increasing 
        participation and confidence in foreign carbon markets. From 
        your perspective, how can Congress support this effort, and 
        what role do you see the Federal Government playing in forestry 
        markets specifically?
          Mr. Luoma. Thank you, Representative, and I agree with 
        everything you just said. Congratulations on that legislation.
          We need to continue to define what the opportunities are in 
        this market, and supporting funding in the USDA with the FIA 
        and the Forest Products Lab, the grants programs where we can 
        do research and do analysis and understand better what is at 
        play in the full life cycle analysis all the way to the built 
        environment. From seedling all the way through to seedling, if 
        you will, there is a tremendous amount of carbon to be 
        sequestered and stored in the forest while it is working, and 
        then moved into the built environment where it gets stored for 
        a long time.
          We don't know a whole lot about how to do the accounting for 
        that. A lot of people are working on it. But I think funding 
        within the USDA to help us do research there will be very 
        helpful.
          Ms. Schrier. Yes, I agree. I mean, how long will that cross-
        laminated timber building remain? Because at some point, wood 
        degrades or is brought down and we are looking at 100 year 
        solutions.
          Now, given that 40 percent of U.S. forests are publicly 
        owned, what opportunities do you see for public-private 
        partnership in the forestry carbon offset market space?
          Mr. Luoma. Yes. Again, I think that is a discussion that can 
        be had within USDA and within all of the organizations that are 
        working on this, including the Environmental Defense Fund and 
        The Nature Conservancy. There is a lot of collaboration now on 
        the principles----

    The Federal Government should help private markets succeed, not 
take them over. For example, the Forest Service's Forest Products Lab 
(FPL) is a successful, long-standing partnership that helps drive 
innovation in the marketplace, including the development of lifecycle 
analysis for wood in the built environment. We welcome and encourage 
this kind of collaboration and would like to see more of it.
    Government can also play an important role in providing high 
quality data, analysis and information sharing to help inform markets. 
The Forest Service's Forest Inventory and Analysis (FIA) program does 
this for private working forests in a variety of ways. We can further 
improve FIA to provide timely, useful data to inform carbon markets. 
This data will help drive collaboration between the public and private-
sector and ensure that all parties have access to the same rigorous and 
up-to-date data sets.
    There are likely other relevant roles of government that can help 
bolster markets for forest carbon and increased wood utilization. We 
have a long history of partnerships between USDA and producers. We 
should draw from that to help us build partnerships that strengthen 
markets.
    The House Agriculture Committee has three clear pathways to further 
climate-smart policies supporting private working forests and forest 
products:

  1.  Help expand markets for forest carbon, increasing accessibility 
            and credibility. If there is a strong market signal for our 
            forests to sequester and store more carbon, we will do just 
            that.

  2.  Encourage more sustainably sourced wood construction in the built 
            environment. It reduces the carbon footprint of the built 
            environment and supports forest retention and overall 
            carbon mitigation.

  3.  Improve forest carbon data. Markets for carbon and markets for 
            climate-smart construction need data to prove that climate 
            benefits are real. We have some of that data, but not all 
            of it. The U.S. government can collect and give credence to 
            the data so that markets, forest owners, and consumers all 
            have faith in it.
                                 ______
                                 
 Supplementary Material Submitted by David Antonioli, Chief Executive 
                             Officer, Verra
    Verra is a Washington, D.C.-based nonprofit that administers the 
world's foremost crediting program in voluntary carbon markets, the 
Verified Carbon Standard (VCS) Program, which has registered over 1,700 
projects and issued over 760 million credits from many different types 
of activities, land types, and contexts around the world.
    Verra was honored to provide testimony at the House Agriculture 
Committee hearing on Voluntary Carbon Markets in Agriculture and 
Forestry on September 23, 2021, and we appreciate the opportunity to 
submit additional input on a number of important questions and issues 
raised by Representatives and witnesses. In providing this input, Verra 
also expresses its willingness to respond to additional questions and 
to provide additional information.
    Overview of the role played by the Voluntary Carbon Market in the 
sectoral climate transition:

   The voluntary carbon market consists of several credible 
        crediting programs that issue real emission reductions and 
        removals. That said, new entrants and approaches are arising in 
        the market, such that buyers and investors must be careful 
        about the carbon credits that they purchase and retire.

   In the 20 years of global practice, voluntary carbon markets 
        have demonstrated their transformative influence helping 
        sectors transition to more climate-friendly practices. Over 
        time, voluntary carbon markets have brought critical finance to 
        new practices that over time become common practice.

   Voluntary carbon markets are operational now. Programs and 
        projects exist and are being put in place by stakeholders 
        across the U.S. in response to critically urgent climate 
        action. Demand for carbon credits is increasing with net-zero 
        commitments from private actors, and with that, credit prices 
        are increasing, and standardized procedures are being put in 
        place to ensure the rigor of credits being used (via, for 
        example, the Taskforce on Scaling Voluntary Carbon Markets).

   While the enabling environment for government-driven action 
        comes together, the atmosphere can benefit today from emissions 
        reductions and removals undertaken in the context of voluntary 
        corporate and individual action. Voluntary carbon market 
        activity has helped foster synergies between the public sector, 
        the financial sector, and many private actors on the demand and 
        supply side. The increased collaboration helps shift sectoral 
        and national emissions profiles. Once climate-smart agriculture 
        and forestry practices are adopted, most continue to be used 
        due to the additional benefits received, underscoring the value 
        of providing carbon finance to support large-scale adoption.

   Transparent information about the creation and use of carbon 
        credits in the voluntary market in the U.S. exists in the work 
        of recognized international standards, and it is important to 
        be able to access credit details to show the role of voluntary 
        carbon markets in meeting U.S. climate goals, across sectors, 
        and nationally.

    Responses to questions:

  1.  How can a single carbon market system work for such a diverse 
            industry like agriculture?

    Verra's carbon crediting program provides a common framework to 
ensure integrity and quality, including:

  (1)  Carbon accounting methodologies (often known as protocols in the 
            U.S.);

  (2)  Independent expert auditing;

  (3)  Registry procedures ensuring transparency.

    However, within that framework, there is considerable flexibility 
for landowners to bring forward a variety of high-integrity crediting 
project types. Voluntary carbon markets can reduce or remove emissions 
and be implemented in one of several sectoral scopes, including 
Agriculture, Forestry, and Other Land Uses (AFOLU), transport, energy, 
and construction.
    Although every project's `product' is tons of carbon, every project 
chooses what activities it will undertake to remove or reduce carbon 
emissions. The list of available methodologies is a menu of options 
that landowners, and more likely groups of landowners, can assess for 
applicability. Verra's methodologies often have modules to accommodate 
different land-use types, while practices included can be selected for 
use incrementally. New methodologies enable new opportunities for new 
project types.
    In the agriculture sector, Verra has approved six (6) methodologies 
that quantify changes in soil organic carbon stocks and/or nitrous 
oxide and methane emissions. Management practices covered by these 
methodologies include improved cropland and grassland management such 
as reduced tillage, cover cropping, and rotational grazing. Our most 
recent methodology covers most of these practices and was developed 
with the support of U.S. company Indigo Ag. We also recently approved 
an accounting methodology that quantifies reductions in methane 
emissions through the use of feed additives that suppress microbial 
activity in ruminant livestock.

  2.  Do methodologies (protocols) take too long to develop?

    A methodology to develop a project is proposed by those who will 
develop a project that will issue carbon credits on their land. Verra's 
methodology development experience combines emissions quantification 
approaches from private actors, our rigorous science-based rule-making 
process, and input from leading scientists in the field.
    Verra's methodology development takes an average of 1.5 years. The 
aforementioned Improved Agricultural Land Management methodology 
developed by Indigo Ag was approved in under 1 year. Verra's 43 
methodologies span sectors and cover a large number of different 
activities within sectors. We are continually reviewing new proposed 
methodologies and updating existing methodologies.

  3.  How can we be sure selling carbon credits will not impact food 
            production?

    Generating carbon credits is not a commodity that will take the 
place of crops or other farming, principally because of the scale of 
revenues--revenues from carbon are not likely to supplant revenues from 
the sale of crops. Instead, revenues from sequestering carbon can help 
farmers adopt more sustainable agricultural practices, which tend to 
result in higher yields and more drought-resistant fields that are also 
able to better handle floods. That is why carbon crediting tends to 
work in favor of both food production and farmers. Methodologies such 
as the Improved Agricultural Land Management methodology include 
applicability conditions that specifically prohibit declines in crop 
productivity resulting from the project activity, precisely to avert 
impacts on food production.

  4.  Does managing land for carbon credits disregard other 
            environmental and social benefits?

    Since its founding, voluntary carbon markets in the ``Agriculture, 
Forestry and Other Land Use'' (AFOLU) categories have aimed to drive 
finance to land use practices that protect environmental and social 
benefits. Verra was the first crediting program to recognize 
sustainable development outcomes for AFOLU projects by labeling carbon 
credits with the Climate, Community & Biodiversity (CCB) Standard in 
2005. In early 2021, half of all AFOLU carbon credits had this label.
    The science backing linkages between emissions management practices 
and outcomes related to other benefits are becoming more prevalent and 
better understood. On the environmental side, this includes factors 
such as improved water quality, soil health, biodiversity conservation, 
reduced erosion, increased climate resilience, and flood protection. On 
the social side, we see improvements in health, income generation, job 
creation, women's empowerment, and economic diversification. Projects 
that demonstrate such benefits can provide additional revenue for 
farmers, ranchers, and other landowners; according to publicly 
available market pricing data, buyers are willing to pay a premium for 
credits from such projects. Verra's Sustainable Development Verified 
Impact Standard (SD VISta), for example, allows projects to request 
certification of these benefits.

  5.  Aren't there concerns about the quality of carbon? How good is 
            your soil carbon MRV (monitoring, reporting, and 
            verification)?

    Verra prides itself on being science-based. In 2020, we convened an 
agriculture land management working group that includes some of the 
world's leading soil scientists from U.S. land-grant universities and 
beyond. We are informed by these experts and believe that the 
monitoring approaches and tools employed in our methodologies represent 
the latest state of the science. We recognize that there are exciting 
advances in the understanding of soil carbon dynamics and believe that 
the science points to the ability of improved practices such as cover 
cropping, organic inputs, and minimum soil disturbance to maintain and 
grow long-term soil carbon stocks. As science evolves, we update our 
approaches to ensure that the rigor of monitoring and quantification 
results in real and credible carbon crediting for agricultural 
projects.
    As described previously, Verra's methodologies establish how 
project proponents must monitor, report, and verify emissions. The 
methodology development process also includes a specific step where the 
methodology itself gets validated and verified by an independent 
auditor that is globally certified to ISO standards and the 
International Accreditation Forum. All methodologies are also submitted 
to public consultation before being approved by Verra.
    We recognize that, particularly in the last few years, a variety of 
carbon credit approaches have arisen, offering varying degrees of 
rigor. Some of these approaches differ from globally accepted 
principles of carbon crediting from established independent crediting 
programs. In that light, there is a role for questions and skepticism. 
We value the opportunity to highlight the quality and integrity of the 
carbon credits that Verra issues.

  6.  How do you guarantee permanence? What liability do farmers face 
            in the event of a wildfire?

    In 2007, Verra established a global buffer pool to address the risk 
of non-permanence of carbon emission reductions and removals. Each 
AFOLU project must contribute a percentage of their verified reduction 
to the AFOLU buffer pool based on an assessment of risk using a non-
permanence risk tool, which is itself periodically reassessed. This 
buffer pool is now the world's largest and most diversified (by project 
type and geography), serving to ensure the permanence of all AFOLU 
credits issued by Verra. Today, the buffer pool has 58 million credits 
that can be used to cover carbon stock losses from any AFOLU project. 
If and as reversals occur in any single project in the system, the 
carbon losses resulting from the event are quantified and reported on. 
Losses are covered through the cancellation of an equivalent number of 
buffer credits from the buffer pool. This ensures that issued credits 
still represent real emission reductions.
    If credits beyond those placed in the buffer by a specific project 
are lost due to causes outside of a landowner's control (e.g., fire), 
they are provided insurance by other credits in the buffer, so the 
landowner does not have to repay these credits directly.

  7.  How can forest owners operate a project and still maintain 
            working land?

    Landowners undertake the desired VCS project activities on the 
extent of their land that they wish to include in a project. Various 
methodologies include activities that allow for the continued economic 
development of the forest resource while the project is in place, e.g., 
Improved Forest Management, Reduced Impact Logging.
    In practice, the vast majority of AFOLU projects integrate the 
finance of the voluntary carbon market with other productive activities 
of the land, such as silvopastoral crops, tourism, obtaining non-wood 
forest products or timber products, and even incomes from local Payment 
for Environmental Services (PES) mechanisms that can be associated with 
water supply, watershed maintenance, and/or scenic beauty.

  8.  There are many early adopters of practices that increase carbon 
            already. Will landowners be able to benefit given that some 
            government programs pay for conservation outcomes?

    There is no provision in Verra's rules that states that a landowner 
cannot receive non-carbon funding in addition to the funding provided 
by carbon finance. Cost-share funding from government agencies does not 
preclude a farmer from accessing carbon finance. In many cases, carbon 
finance may be needed in addition to other sources of funding to make 
it financially feasible to carry out the project activity with the 
level of carbon quantification, monitoring, and reporting required to 
create a verified carbon credit. Receiving payments for implementation 
of best management practices, for example, would be allowed as long as 
it did not affect the additionality of the project.
    It is paramount that Verra maintain the integrity of high-quality 
carbon credits by guaranteeing their additionality. Nonetheless, we do 
not render stakeholders ineligible if they have begun implementing good 
practices. For example, Verra allows a 5 year timeframe for projects to 
be registered following the start of activities in order to allow 
projects time to complete the required documentation and the validation 
process. Furthermore, our Improved Agricultural Land Management 
methodology enables landowners to add new practices to existing best 
management practices already used on their land in order to generate 
credits for these new practices.
    The additionality test in the Improved Agricultural Land Management 
methodology uses a sociocultural barrier test combined with common 
practice, not just financial feasibility assessment.

   The sociocultural barrier test assesses whether there is de 
        facto resistance to instituting the practice, and the carbon 
        finance would create the incentive to implement.

   The common practice test confirms that for projects in a 
        specific location, where a practice is not carried out by at 
        least 20% of the farms in the area, then it can be deemed 
        additional and eligible for assessment.

    The financial additionality assessment which relates to regulatory 
surplus notes that often public funding is not sufficient to enable the 
activity to take place. Where it can be demonstrated that carbon 
funding is still needed to actually pursue the activity on a given 
site, the project can be considered.
    Finally, early adopters benefit from the climate-smart agriculture 
and forestry management practices (e.g., drought protection, flood 
control) they engage in, regardless of the source of funding. Once 
adopted, most of the practices continue to be used due to the notable 
benefits received. 

  9.  Will small- and mid-size farmers be able to benefit, or is it 
            mostly for large businesses?

    As a mission-driven nonprofit organization, Verra seeks to increase 
the accessibility of the benefits from carbon finance to a range of 
landowner and business sizes based on successfully implementing high-
integrity projects.
    A standard approach to enable smaller-scale actors to engage in 
voluntary carbon markets is through the creation of `grouped' projects. 
In this approach, a variety of landowners bring together geographically 
disparate activities taking place across a predefined area, thereby 
leveraging economies of scale to reduce individual transaction costs. 
Grouped projects are common in the land-use sector. A recent American 
Forests Foundation methodology that Congressman Bishop mentioned during 
the September 23 hearing is aimed specifically at allowing smaller 
forest owners to engage by offering a platform for them to access 
carbon payments.
    Verra also continuously innovates to facilitate greater 
participation by small-scale landowners. This includes:

   Streamlining methodology frameworks via modular approaches 
        where project proponents choose the appropriate activities and 
        do not need to convert their entire land management to carbon.

   Simplifying validation and verification processes for small-
        scale projects.

   Maintaining lower fees for small-scale projects to register 
        and issue credits through Verra.

  10. How can farmers participate if there are so many barriers to 
            entry? Do farmers get any real income since this is so 
            expensive?

    The voluntary carbon market has many requirements, by necessity. To 
the extent that they create barriers to entry, they are not ``proof'' 
of the failure of the market. In fact, they demonstrate a rigorous 
mechanism based on quality-related parameters that ensure that credits 
that are used by companies to offset their emissions are real, 
measurable, permanent, and additional.
    Farmers need a way to diversify their revenue, to help them secure 
benefits for their families, and to maintain ownership of their working 
lands. While various startup costs in the more established carbon 
markets might represent a hurdle, the market itself has brought about 
solutions over the last 20 years, including the design of early-stage 
finance mechanisms and forward contracts.
    Importantly, the investments and support that government agencies 
can make to support the scaling of an equitable and efficient market 
are aimed at enabling broader use of voluntary carbon markets. Many of 
the transaction costs faced in verifying a carbon project are not paid 
to the crediting program for registration and issuance of credits, but 
relate to the processing, monitoring and verification of the project's 
emissions data. New entrants can be supported in addressing these costs 
by, for example:

  i.  Providing necessary data sources,

  ii.  Helping to make data accessible,

  iii.  Working with existing technical expertise,

  iv.  Developing training and capacity building,

  v.  Supporting carbon platforms and other tools.

  11. Isn't it too early for the government to get involved if 
            voluntary carbon markets are so new?

    It is not too early for the government to get involved. Building a 
robust solution to address the climate emergency cannot wait, and given 
the number of options farmers and landowners have to generate carbon 
credits, there is quite a bit of confusion that could readily be 
addressed by targeted government intervention. All approaches (e.g., 
public, private, and public-private) need to come online to scale up 
action. Voluntary carbon markets have over 20 years of global 
experience and are up and running. New U.S.-based buyers and sellers 
are entering daily. Government support on targeted elements would 
multiply the benefits that voluntary carbon markets can bring to 
farmers, ranchers and foresters and make the market more accessible.
    Government should prioritize:

   Reducing confusion in the market and among farmers and 
        forest owners in respect of what constitutes a high-quality 
        carbon credit:

     Providing clarity around basic market structure and 
            the roles provided by different parties can help landowners 
            navigate the process;

     Supplementing landowner understanding will allow them 
            to focus their attention on those crediting programs that 
            are more likely to generate units that will have long-term 
            value in the market.

   Research on the emissions outcomes of practices that can 
        take place across different land types:

     Making this data available for landowners and 
            technical experts to set up their projects will clear a 
            significant hurdle required to demonstrate real and 
            measurable project activities;

     This data can support new and more rapid methodology 
            (protocol) development;

     This effort can leverage a recent White House 
            monitoring, reporting, and verification Initiative that is 
            bringing a whole of government and society approach to 
            compiling and developing the best available data related to 
            carbon mitigation and management.

   Capacity-building and technical assistance by government 
        entities will increase awareness and understanding of the 
        development and accreditation process:

     Training workshops and accessible information 
            platforms will level the playing field for new market 
            entrants;

     Enabling connections with a significant number of 
            experienced carbon market actors.

   Support related to finance and start-up costs:

     As described earlier, supporting projects by 
            complementing their data needs and availability, and by 
            providing technical expertise, will reduce a large part of 
            project start-up costs;

     Helping lower costs of the independent third-party 
            auditors is a worthy consideration;

     Providing seed funding, low-interest loans and 
            financial support for new projects.

   Establish a carbon bank by investing in carbon credits held 
        by the public-sector:

     Supports lowering costs for projects as they would not 
            need to subtract from the number of credits they can sell 
            by providing credits to an independent buffer;

     Serves as a mechanism for providing permanence 
            assurance in face of fire risk and other losses.
                                 ______
                                 
                    Submitted Letter by Earthjustice
September 23, 2021

  Hon. David Scott,
  Chairman,
  House Committee on Agriculture,
  Washington, D.C.

    Thank you for the opportunity to testify on the role of voluntary 
carbon markets in the agriculture and forestry sectors, and how to take 
advantage of these sectors' tremendous prospects to both reduce 
greenhouse gas (GHG) emissions and restore the amount of carbon lost 
from soil. This testimony inspects the effectiveness of market schemes 
as a climate solution, and offers recommendations on holistic, scalable 
approaches to agriculture and land management as part of our national 
response to climate change.
    There is no doubt that agriculture must be part of any solution to 
the climate crisis. Of course, agriculture is highly vulnerable to the 
more extreme and variable weather that climate change is bringing, and 
our food and economic security depend upon both stabilizing our climate 
and increasing the resilience of our food system. More relevant here, 
and usually not recognized, agriculture is a major contributor to 
climate change, and we simply cannot reach our climate goals without 
more aggressively and effectively addressing this contribution. 
Agriculture's contribution is equivalent to approximately \1/3\ of U.S. 
total GHG emissions--about the same as the transportation sector--when 
properly calculated to include all climate change impacts related to 
agriculture.\1\
---------------------------------------------------------------------------
    \1\ See EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks 
1990-2019 (2021), https://www.epa.gov/sites/production/files/2021-04/
documents/us-ghg-inventory-2021-main-text.pdf. EPA concludes that 
agriculture's GHG emissions are about 10% of total U.S. GHG emissions; 
as explained below, this approach significantly understates the correct 
figure.
    Editor's note: references annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    Fortunately, we can be confident that agriculture can play a 
pivotal role in tackling the climate crisis. Implementation of proven 
and well-documented climate-friendly agricultural practices can 
increase the amount of carbon removed from the atmosphere, increase the 
amount of carbon stored in soil, and/or reduce agricultural emissions 
of carbon dioxide, nitrous oxide, and methane. These practices will 
also often increase resilience to extreme weather, reduce environmental 
and public health harms, and, in most cases, over time, improve 
producer productivity or profitability. While proven, these practices 
are used on only small portions of U.S. farmland; policy changes are 
needed to dramatically accelerate their adoption. Crafting that policy 
is the task of this Committee.
    The urgency of the climate crisis must be met with effective 
answers. We offer this testimony to address key issues concerning the 
use of carbon markets in agriculture as a proposed climate solution and 
explore the following points:

  1.  Any climate solution must account for the true climate impact of 
            agriculture, which is approximately \1/3\ of all U.S. GHG 
            emissions.

  2.  There are a number of agroecological practices that provide 
            proven ways to reduce GHG emissions and sequester and store 
            carbon. Scaling up these efforts and funding additional 
            research into them offer an effective solution to the 
            climate crisis.

  3.  Carbon markets do not provide an effective climate solution. They 
            are impermanent, uncertain, and based on a scientific 
            fallacy, all of which undermines their credibility. They 
            are also historically inequitable, and fail to address 
            longstanding environmental justice concerns.
I. Agriculture's True Climate Impact
    As lawmakers analyze solutions for tackling the climate crisis, it 
is imperative they understand the true climate footprint of the 
agricultural sector. Though the Environmental Protection Agency (EPA) 
estimates that agriculture is responsible for about 10% of U.S. GHG 
emissions,\2\ this figure excludes many factors that contribute 
additional emissions from the sector. This figure does not account for 
emissions from on-farm fuel and electricity use (See figure below, Bar 
2), emissions associated with the manufacture of agricultural inputs 
like fertilizer (See figure below, Bar 3), or emissions downstream of 
production such as food processing, distribution and food waste. 
Additionally, these estimates do not account for the impacts of methane 
on policy-relevant timescales, as they utilize 100 year timeframes 
rather than a more relevant 20 year timeframe (GWP20) accurately 
reflecting methane's concentrated warming impacts (See figure below, 
Bar 4).\3\
---------------------------------------------------------------------------
    \2\ See EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks 
1990-2019 (2021), https://www.epa.gov/sites/production/files/2021-04/
documents/us-ghg-inventory-2021-main-text.pdf.
    \3\ Intergovernmental Panel on Climate Change, Climate Change 2013: 
The Physical Science Basis Ch. 8, at 714 tbl. 8-7 (2014) at 720.
---------------------------------------------------------------------------
    A major omission in this account of agriculture's climate footprint 
is related to land use. Past and ongoing conversion to cropland and 
grazing land has resulted in enormous losses of stored carbon, and 
agricultural activities pose ongoing threats to the magnitude and 
persistence of the remaining soil carbon stocks. Furthermore, this 
estimate does not include the impact of continued land use, i.e., the 
continuing yearly impact of prior conversions of natural lands to 
agriculture.\4\
---------------------------------------------------------------------------
    \4\ Matthew Hayek, et al., The Carbon Opportunity Cost of Animal-
Sourced Food Production on Land, 4 Nature Sustainability 21 (Jan. 
2021).
---------------------------------------------------------------------------
    The use of land for growing crops or raising livestock means that 
agricultural land--62% of the continental United States--cannot be used 
for other purposes, including those that could have a very different 
climate impact, for example by sequestering or storing carbon in 
grassland or forest land. A more accurate and complete assessment of 
agriculture's climate impact would include the ``quantity of carbon 
that could be sequestered annually if [that land] were instead devoted 
to regenerating forest [or grassland].'' \5\ See figure below, Bars 5 
and 6. Adding these climate change impacts to the annual food system 
emissions would very dramatically increase agriculture's true climate 
change footprint: ``the cumulative potential of carbon dioxide removal 
on land currently occupied by animal agriculture is comparable in order 
of magnitude to the past decade of global fossil fuel emissions.'' \6\
---------------------------------------------------------------------------
    \5\ Timothy Searchinger, et al., Assessing the Efficiency of 
Changes in Land Use for Mitigating Climate Change, 564 Nature 249 (Dec. 
13, 2018).
    \6\ See Hayek supra note 7.
---------------------------------------------------------------------------
    Thus, when correctly calculated to include all agriculture related 
climate change impacts, including the foregone sequestration potential 
of agricultural land use, it is clear that the overall impact of 
agriculture to climate change is equivalent to far more than only 10% 
of U.S. GHG emissions. A more complete accounting of these 
contributions including each of the factors laid out above raises this 
estimate to at least \1/3\ of U.S. direct GHG emissions, closer in 
magnitude to total emissions from the transportation sector. This 
estimate is in line with numerous recent estimates at the global scale, 
which place agricultural emissions at \1/3\ or more of anthropogenic 
greenhouse gas emissions.\7\ Any solution to the climate crisis must 
focus not only on agriculture's potential to store more carbon in the 
soil, but also on the need to reduce agriculture's GHG emissions.
---------------------------------------------------------------------------
    \7\ Id. See Crippa, M., Solazzo, E., Guizzardi, D., et al. Food 
systems are responsible for a third of global anthropogenic GHG 
emissions. Nat. Food 2, 198-209 (2021). https://doi.org/10.1038/s43016-
021-00225-9; See also, Sonja J. Vermeulen, et al., Climate Change and 
Food Systems. Annual Review of Environment and Resources, 37 Ann. Rev. 
Env't & Resources 195 (2012).


II. A Number of Agroecological Practices Provide Proven Ways to Reduce 
        GHG Emissions and Sequester and Store Carbon in Soil.
---------------------------------------------------------------------------
    \8\ U.S. Environmental Protection Agency, Inventory of U.S. 
Greenhouse Gas Emissions and Sinks 1990-2019 (2021) at Table 2-7. [2] 
Id. Table 2-12. [3] Values adjusted using 20 year global warming 
potentials for N2O and CH4. [4] Id. Table 2-8. 
[5] Hayek, M.N., Harwatt, H., Ripple, W.J., et al. The carbon 
opportunity cost of animal-sourced food production on land. Nat. 
Sustain. 4, 21-24 (2021). Annualized, U.S. value from personal 
communication with author. [6] U.S. EPA including emissions from 
ammonia production, nitric acid production, composting, phosphoric acid 
production, anaerobic digestion at biogas facilities, and 75% of 
landfill emissions. Table ES-2.
---------------------------------------------------------------------------
    Several climate-friendly practices with demonstrated benefits are 
available to reduce agriculture's GHG footprint. A large body of 
scientific literature, in addition to traditional knowledge and 
experience, support the environmental benefits of these practices, 
making them excellent candidates for effectively and efficiently 
increasing carbon sequestration, reducing greenhouse gas emissions, and 
building climate resiliency. However, due to financial and technical 
barriers, adoption of some of the most effective climate-friendly 
practices remains low. Lawmakers should focus greater attention on 
incentivizing adoption of practices with the greatest climate benefits, 
while also supporting continued research on how to most effectively 
adopt these practices at scale across the nation, as these practices 
offer a true climate solution.
    Agroforestry has a strong potential for reducing the net climate 
footprint of agriculture--with realistic rates of adoption leading to 
carbon sequestration rates equal in magnitude to over \1/3\ of fossil 
fuel emissions in the U.S.\9\ Agroforestry practices, including alley 
cropping, silvopasture, and riparian forest buffers, integrate or re-
introduce woody vegetation into crop and animal farming systems where 
the landscape would naturally support such vegetation. Alley cropping 
systems integrate trees and shrubs into crop production, while 
silvopasture refers to the integration of trees and shrubs with 
livestock activities.\10\
---------------------------------------------------------------------------
    \9\ See Ranjith P. Udawatta & Shibu Jose, Agroforestry Strategies 
to Sequester Carbon in Temperate North America, 86 Agroforestry Sys. 
225 (2012).
    \10\ See, e.g., Shibu Jose & Sougata Bardhan, Agroforestry for 
Biomass Production and Carbon Sequestration: An Overview, 86 
Agroforestry Sys. 105 (2012); see also Ranjith P. Udawatta & Shibu 
Jose, Agroforestry Strategies to Sequester Carbon in Temperate North 
America, 86 Agroforestry Sys. 225 (2012).
---------------------------------------------------------------------------
    Improved nutrient management is another practice with enormous 
climate benefits. Synthetic nitrogen fertilizer application and other 
agricultural soil management practices account for more than \1/2\ of 
greenhouse gas emissions from agriculture. In addition to representing 
a large proportion of the environmental footprint of agriculture, these 
emissions are responsible for over \3/4\ of all nitrous oxide emissions 
across sectors in the U.S.\11\ Reducing nitrous oxide emissions from 
agriculture is particularly urgent as the warming potential of nitrous 
oxide is 265-298 times greater than carbon dioxide.\12\ Improving 
nutrient management practices, including precision application, cover 
crops and longer and more varied crop rotations (which naturally 
provide nutrients and thus reduce fertilizer needs), using natural 
rather than synthetic fertilizer, riparian buffers, and soil 
amendments, can greatly reduce the climate footprint of agriculture by 
reducing nitrous oxide emissions while also preventing nutrient runoff 
and avoiding air and water pollution from excessive fertilizer use.\13\
---------------------------------------------------------------------------
    \11\ See EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks 
1990-2018, 2-4 (2020), https://www.epa.gov/sites/production/files/
2020-04/documents/us-ghg-inventory-2020-main-text.pdf.
    \12\ Id. at 1-10, Table 1-3.
    \13\ See Nat. Res. Conservation Serv., Conservation Practice 
Standard Conservation, Nutrient Management Code 590 (2012), https://
www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1046433.pdf.
---------------------------------------------------------------------------
    Diversified conservation crop rotations and cover crops can also 
help increase soil carbon sequestration by introducing a wider range of 
inputs into soil, maintaining soil cover throughout the year, and 
minimizing soil disturbance and erosion.\14\ By building organic 
matter, these practices, in addition to reducing the need for synthetic 
fertilizers, can improve water quality, improve water retention and 
thus reduce the need for water inputs, and mitigate nitrous oxide 
emissions. In addition, these practices can reduce the vulnerability of 
crops to pests and pathogens, thereby reducing the need for pesticides 
that are harmful to pollinators and water quality.\15\ Similarly, cover 
crops significantly increase soil carbon by increasing carbon inputs 
from plants and reducing erosion.
---------------------------------------------------------------------------
    \14\ See, e.g., Christopher Poeplauab & Axel Dona, Carbon 
Sequestration in Agricultural Soils via Cultivation of Cover crops--A 
Meta-analysis, 33 Agric., Ecosystems & Env't 200 (2015); Jinshi Jian, 
et al., A Meta-analysis of Global Cropland Soil Carbon Changes Due to 
Cover Cropping, 143 Soil Biology & Biochemistry 107, 735 (2020); see 
also R. Lal, Soil Carbon Sequestration and Aggregation By Cover 
Cropping, 70 J. Soil & Water Conservation 329 (2015); C. Tonitto, et 
al., Replacing Bare Fallows With Cover Crops in Fertilizer-Intensive 
Cropping Systems: A Meta-analysis of Crop Yield and N Dynamics, 112 
Agric., Ecosystems & Env't 58 (2006); Meagan E. Schipanski, A Framework 
for Evaluating Ecosystem Services Provided By Cover Crops in 
Agroecosystems, 125 Agric. Sys. 12 (2014); Jason P. Kaye & Miguel 
Quemada, Using Cover Crops to Mitigate and Adapt to Climate Change. A 
Review, 37 Agronomy Sustainable Dev. 4 (2017).
    \15\ See Giovanni Tamburini, et al., Agricultural Diversification 
Promotes Multiple Ecosystem Services Without Compromising Yield, 6 
Sci. Advances 2020 eaba1715 (2020).
---------------------------------------------------------------------------
    Protecting land in conservation programs and expanding enrollment 
in such programs are among the most effective strategies to reduce the 
climate footprint of agriculture. In particular, avoiding conversion of 
grasslands has been identified as the most impactful agricultural 
activity in the U.S. to mitigate climate change.\16\ Additionally, 
preventing conversion of natural lands is critical for protecting 
biodiversity and allowing wildlife habitat to remain intact.
---------------------------------------------------------------------------
    \16\ See Joseph E. Fargione, et al., Natural Climate Solutions for 
the United States, 4 Sci. Advances eaat1869 (2018).
---------------------------------------------------------------------------
    Each of these practices has proven climate benefits. They can 
increase the amount of carbon removed from the atmosphere, increase the 
amount of carbon stored in soil, and/or reduce agricultural emissions 
of carbon dioxide, nitrous oxide, and methane. These practices will 
also often increase resilience to extreme weather, reduce environmental 
and public health harms, and, in most cases, over time, improve 
producer productivity or profitability. However, they are now used on 
only a small portion of U.S. grazing and crop land. It must be a policy 
priority to greatly accelerate adoption of these practices, as well as 
increasing investment in research into their benefits and technical 
assistance to help with their adoption. Research, outreach and 
technical support, and financial assistance to increase adoption of 
these practices together ameliorate agriculture's overall climate 
impact.
III. Carbon Markets Are Not an Effective Climate Solution.
    There is a tremendous amount of growing interest in the use of 
carbon markets in agriculture as a way to reduce GHG emissions and 
increase soil carbon stocks. While there may be effective ways private 
companies can invest in climate-friendly farming--for example, paying 
farmers within their supply chain to reduce their emissions or to 
sequester more carbon in the soil--adoption of carbon market or 
``offset'' schemes raises a number of concerns. Several of the 
challenges are technical, such as those related to measurement and 
verification, additionality, and permanence. Other challenges are more 
historical, social, and economic, such as those related to equity, 
access, and intersections with pollution- or emissions-reduction 
mandates. Almost all of these issues are inextricably tied to the 
realities of our current agricultural system and cannot be easily 
addressed or dismissed. Together, these concerns raise grave doubts as 
to whether private carbon offset markets can and should be part of any 
climate solution for the agriculture sector.
A. Market Schemes Are Impermanent, Based on a Scientific Fallacy, and 
        Uncertain.
    As an initial matter, it is critical to recognize that climate 
change is attributed to the removal of large amounts of fossil carbon, 
which would have remained sequestered in the absence of anthropogenic 
activities. In contrast to these slow-cycling fossil stocks, carbon in 
biogenic pools including vegetation and soils is inherently impermanent 
and perpetually vulnerable to decomposition. Thus, as a matter of 
logic, market schemes that depend on impermanent carbon sequestration 
and storage cannot be used to offset fossil fuel emissions. Rather, 
these permanent emissions require a permanent solution.
    Moreover, offset-based schemes are based on a scientific fallacy 
that equates increases in soil carbon stocks with past and ongoing 
losses of fossil carbon. They allow industry to buy credits for carbon 
storage in soil to be used to discount fossil fuel emissions. However, 
these are not at all equivalent. Building soil organic carbon is 
important in part because it helps us recover from the debt of decades 
of soil organic carbon losses from agricultural intensification. 
Offsets are based on the false premise that restoration of 
anthropogenic soil carbon losses should be counted as an offset for 
ongoing fossil emissions--before we've come close to repaying the 
enormous debt of carbon losses from agricultural activity. Soil carbon 
will never be able to offset ongoing losses of fossil carbon. Soil 
carbon is inherently impermanent compared to fossil carbon and is 
increasingly vulnerable to loss as global change accelerates losses of 
soil organic carbon through warming. And while improvements in methods 
to characterize and quantify permanence are critical to improve our 
understanding of soil carbon storage, it is important to note that 
improvements in measurement themselves do not enhance permanence or 
alter that foundational difference in permanence between soil organic 
carbon and fossil carbon.
    In addition, carbon sequestration in agricultural lands is complex 
and nuanced, and currently, more scientific research needs to be 
prioritized for offset market schemes to be credible, effective, and 
fair. There are looming uncertainties and challenges around measurement 
and verification and additionality that render these schemes 
questionable as a climate solution.
    Measurement and verification issues may relate to (1) verifying 
practice adoption, (2) measuring outcomes for improving efficacy and 
optimizing incentivized practices, or (3) measuring outcomes for direct 
payments related to the magnitude of an outcome (e.g., payments per 
unit carbon sequestered or per unit emission reduced). We are doubtful 
that programs that are based not on adoption of practices but 
purportedly on precise determinations of emission reductions or soil 
organic carbon changes over time can--at least in the near term--be 
credible and effective at a reasonable cost. The current gold-standard 
of detecting real changes in soil organic carbon over time requires 
extensive, direct sampling of soil cores followed by in-lab analyses 
using, for example, loss on ignition. There remain unresolved questions 
as to the necessary frequency, depth, and spatial distribution of soil 
samples necessary for accurate measurements (not to mention the 
additional measurements required for information related to permanence, 
additionality, or any other components of soil health). Even with 
extensive sampling, detecting small changes in soil organic carbon over 
time is challenging.
    Some programs seek to pair some amount of actual sampling with 
cheaper and less time-consuming approaches including spectroscopic 
measurements, modeling, and surrogate measurements.\17\ These 
additional approaches are highly attractive to industry due to their 
reduced costs of implementation, yet they currently lack the accuracy 
and precision needed in a market context to substitute for direct 
measurements. As a result, we have low confidence in estimating 
specific, local changes in soil organic carbon from modeling based on 
management practices alone without direct measurements.
---------------------------------------------------------------------------
    \17\ Oldfield, E.E., A.J. Eagle, R.L. Rubin, J. Rudek, J. 
Sanderman, D.R. Gordon. 2021. Agricultural soil carbon credits: Making 
sense of protocols for carbon sequestration and net greenhouse gas 
removals. Environmental Defense Fund, New York, New York. edf.org/
sites/default/files/content/agricultural-soil-carbon-credits-
protocolsynthesis.pdf. See also Emily Bruner & Jean Brokish, Illinois 
Sustainable Ag Partnership, Ecosystem Market Information: Background 
and Comparison Table (2021).
---------------------------------------------------------------------------
    Carbon market schemes must also consider the concept of 
additionality, i.e., how much additional carbon is stored in the soil 
relative to what would have been stored in the absence of the scheme, 
or how much emissions are reduced through implementation of a practice 
relative to emissions that would have occurred in the absence of the 
scheme.\18\ Determining the baseline for additionality determinations 
can be difficult. For example, producers already implementing climate-
friendly practices may not be able to further increase soil carbon. 
However, they could switch to higher GHG emitting conventional 
practices, so arguably the continuation of sound practices is 
additional. Determining the baseline may also be difficult if emissions 
could or should be reduced through other means. For example, there 
tends to be more opportunity for additionality with practices that 
directly increase sequestration in soils compared to practices that 
reduce certain GHG emissions (e.g., manure methane from CAFOs) or 
reward avoided conversion of non-croplands, as these outcomes may (and 
we believe should) be achieved through alternative non-payment 
approaches. In evaluating additionality, it is important to recognize 
that soil carbon gains in these schemes are generally helping to 
restore lost soil carbon stocks due to prior agricultural activities 
and that these gains may still leave soil carbon stocks depleted 
relative to what would be stored in soil in the absence of agricultural 
activities.
---------------------------------------------------------------------------
    \18\ See Sharon Billings, et al., Soil Organic Carbon is Not Just 
for Soil Scientists: Measurement Recommendations for Diverse 
Practitioners, 31 Ecol. Appl. e02290 (2021).
---------------------------------------------------------------------------
    Finally, offset schemes focus exclusively on soil carbon storage 
and thus reflect a narrow view of soil functions. Carbon storage is 
only one of the many ecological functions of soils and incentivizing 
continual increases in soil carbon everywhere independent of 
considerations of other ecosystem processes is neither realistic nor 
necessarily beneficial for soil fertility, biodiversity, plant 
productivity, GHG emissions, or other ecosystem functions. Proposed 
offset schemes in agriculture are typically based on the false premise 
that soil carbon should be constantly increasing everywhere and that 
increases in soil carbon are always indicators of improved soil 
function. While soil erosion and degradation should be addressed, those 
cannot be adequate surrogates for a broad climate solution and any such 
ecological justifications should be examined carefully.
    Thus, given the additional challenges and fallacies surrounding 
these carbon markets, these schemes cannot and should not be used to 
offset GHG compliance obligations, and do not provide an effective and 
credible climate solution.
IV. Carbon Markets Are Not Equitably Accessible and Raise Environmental 
        Justice Concerns.
    There are about two million farms, 400 million acres of cropland 
and 800 million acres of pasture and rangeland in the country.\19\ Due 
to a long, enduring history of discriminatory and exploitative 
practices--including systemic denial of farm loans and other assistance 
to Black, Indigenous People of Color (BIPOC) producers by the U.S. 
Department of Agriculture--most of this land is owned by white farmers 
and ranchers. Discriminatory practices and policies continue to plague 
the agricultural sector.
---------------------------------------------------------------------------
    \19\ See USDA National Agricultural Statistics Service Census of 
Agriculture 2017.
---------------------------------------------------------------------------
    With this problematic history in mind, solutions to the climate 
crisis should be designed to benefit and be accessible to small and 
historically disadvantaged producers. Any system that pays producers to 
adopt climate-friendly practices should be available to all producers 
and must not become another mechanism through which the bigger and 
white establishments reap the benefits while smaller farms and BIPOC-
owned and other historically excluded operations are left out. It must 
also ensure that producers who have been using sustainable practices 
for years are not excluded from receiving benefits simply because their 
soil is already carbon rich or because they have already implemented 
strategies for reducing emissions.
    Congress should prioritize providing technical assistance and 
outreach by diverse service providers with linguistic and cultural 
competency, partnering with community-based organizations and local 
community leaders who have earned trust of farmers and producers, 
employing BIPOC experts to lead trainings on issues unique and salient 
to local communities, and where possible, and make trainings and 
technical assistance opportunities credit-bearing in partnership with 
land-grant universities. In lieu of market schemes, Congress should 
provide resources BIPOC farmers need to succeed--as a starting point, 
support and funding for completing baseline soil health assessments, 
debt relief, access to equipment, non-GMO seed, and access to 
affordable land are chief priorities.
    In addition, historically, environmental justice communities have 
not benefited from market-based policies though they are the most 
burdened by pollution-generating facilities. Equitable climate policies 
must consider non-GHG co-pollutants and address local environmental 
impacts to environmental justice communities. Thus, any market-based 
proposal must be informed by input from the most impacted communities.
          * * * * *
    Congress faces a once-in-a-generation opportunity and obligation to 
invest in agricultural solutions to the climate crisis and empower 
farmers and ranchers to play key roles in addressing the warming 
climate. Given the true climate impact of the agriculture sector and 
the lingering questions and concerns on the validity and effectiveness 
of carbon market schemes to provide sound climate change solutions and 
direct benefits to our nation's farmers and ranchers, we urge Congress 
to consider policy solutions and programs that incentivize adoption of 
climate-stewardship practices that are evidenced to sequester carbon 
and reduce GHG emissions. These practices not only effectively reduce 
agriculture's climate footprint, but they also help build resilience, 
improve water and air quality, and protect biodiversity. Support for 
these practices and programs ensures that farmer livelihood and 
agricultural resiliency are not tied to a volatile carbon market, where 
the transaction costs are prohibitively high and the price of carbon 
too low to ensure robust participation within the sector. Funding for 
these practices, and for more research and technical assistance related 
to them, provides a true solution to the growing climate crisis.
            Respectfully submitted,

Earthjustice.
                                 ______
                                 
                          Submitted Questions
Response from Debbie Reed, Executive Director and Member, Board of 
        Directors, Ecosystem Services Market Consortium and Ecosystems 
        Market Research Consortium
Question Submitted by Hon. Dusty Johnson, a Representative in Congress 
        from South Dakota
    Question. Farmers are working hard to respond to company and 
consumer demands for more climate-friendly products, but they often are 
not rewarded in the market for the investments they make at the field 
level. As this Committee works to build additional market certainty and 
incentives that properly recognize the value that producers are 
creating, are there tools or practices that are already working in the 
marketplace that help farmers and ranchers to communicate the 
investment and see the financial benefits of decisions they are making 
at the farm level throughout the supply chain? As an example, in my 
home state, companies such as the Farmers Business Network are 
providing a way to certify low-carbon grain--and command a premium in 
the marketplace--already (including in partnership with POET and a 
pasta manufacturer) and can offer models for us to learn from.
    Answer. Private voluntary carbon and ecosystem services markets 
rely on standards to quantify, verify, and in the case of ESMC, certify 
environmental outcomes that can be monetized into saleable credits. 
These standards are crafted by international standard setting 
organizations and rely on the most up to date climate science available 
in order to verify claims are true representations of environmental 
improvements. The recent rush to satisfy consumer demand for more 
climate-friendly products has led to widespread claims of environmental 
stewardship from companies and organizations seeking to capitalize on 
this increasing market. Some claims are more dubious than others, 
leading to accusations of `green washing' in the public discourse. 
Ecosystem services markets that adhere to scientifically rigorous 
quantification and verification standards for the credits they generate 
bolster the integrity of environmental claims and protect buyers 
(corporate food companies) and sellers (farmers and ranchers) of 
environmental credits from unfair ``green washing'' labels.
    By selling certified credits (credits that have been verified by 
impact registries such as Gold Standard, Verra, etc.), it is possible 
agricultural producers could highlight their participation in certified 
carbon markets to their customers, and potentially command a premium 
for those products. At the moment, ESMC is solely focused on fully 
launching its market program in 2022 but, as with any burgeoning 
market. we would anticipate further innovations and technological 
advancements to follow as entrepreneurs continue to compete for credits 
in this new market.
Response from Leonardo Bastos, Senior Vice President--Head of Global 
        Commercial Ecosystems, Bayer Crop Science
Question Submitted by Hon. Jim Costa, a Representative in Congress from 
        California
    Question. Would you agree more technical assistance is needed to 
help create a successful carbon market program? Could you please 
elaborate on what Congress and this Administration can do to help 
address the issue?
    Answer. Yes, more technical assistance for farmers is important if 
we are to incorporate climate-smart practices into production systems 
so that farmers are successful in producing more sustainably. Farmers 
have shown that they invest in more sustainable practices if there is a 
clear positive impact on their yields. Academic research and data show 
that climate sustainable practices do in fact positively impact yields, 
but sustainable practices need to be implemented in ways that consider 
the realities farmers face.
    Bayer has endorsed the Growing Climate Solutions Act because we 
think it will help provide farmers with technical assistance and 
trusted advisors who can help them make the choices that work best for 
their operations. But this Committee also has an opportunity to work 
with USDA and voluntary private markets to provide increased technical 
assistance in ways that could be targeted to help farmers with a 
variety of climate-smart agriculture and carbon issues. We at Bayer 
would be happy to help you in whatever way we can be of assistance.
Question Submitted by Hon. Dusty Johnson, a Representative in Congress 
        from South Dakota
    Question. Farmers are working hard to respond to company and 
consumer demands for more climate-friendly products, but they often are 
not rewarded in the market for the investments they make at the field 
level. As this Committee works to build additional market certainty and 
incentives that properly recognize the value that producers are 
creating, are there tools or practices that are already working in the 
marketplace that help farmers and ranchers to communicate the 
investment and see the financial benefits of decisions they are making 
at the farm level throughout the supply chain? As an example, in my 
home state, companies such as the Farmers Business Network are 
providing a way to certify low-carbon grain--and command a premium in 
the marketplace--already (including in partnership with POET and a 
pasta manufacturer) and can offer models for us to learn from.
    Answer. This is such an important question because it gets to the 
heart of the ways that farmers will adopt climate sustainable practices 
at a large scale and see a financial benefit for doing so. Consumer 
awareness is key to drive demand for products with lower carbon 
footprints. There are nascent and niche markets for these products that 
are currently limited but have the potential to grow as more consumers 
from various market segments see value in carbon-smart products.
    What we know is that consumers have shown that they will consider 
paying a premium for environmentally sustainable products, and supply 
chain partners want to deliver those products. Low-cost measurement and 
tracking of carbon reductions associated with a product is a key tool 
for helping farmers keep the added value attached to their sustainably 
produced product and realize a profit from consumer demand.
Response from Brian Luoma, President and Chief Executive Officer, The 
        Westervelt Company; on behalf of National Alliance of Forest 
        Owners
Question Submitted by Hon. David Scott, a Representative in Congress 
        from Georgia
    Question. You had eloquently stressed the importance of a working 
forest and the significant role it plays in climate benefits by 
displacing more carbon intensive alternatives. Do you agree then that 
the Federal Government should do all it can to ensure that carbon 
markets do not adversely affect the fiber supply of forest dependent 
manufactures who play a critical role in maintaining a working forest?
    Answer. At The Westervelt Company, we own and manage both forests 
and mills. Forest owners seek to optimize the use of their resources. 
Forests that are highly productive for products will continue to 
provide wood for mills.
    But almost all private working forest owners own land that isn't 
ideal for growing 2x4s--whether that's marginal lands or regions where 
marketable timber may not be the top priority, or in communities that 
no longer have the local manufacturing infrastructure to use trees. 
These forests are used for other purposes and may be used for carbon.
    One of the reasons we talk about markets for forest carbon and wood 
construction in tandem is because they are part of one system, and we 
have to take a systemic approach to fiber production and carbon storage 
and sequestration. The bottom line is that, when it comes to carbon, we 
are looking for additional markets, not replacement markets.
    U.S. forest owners know how to grow trees--we're the best in the 
world. If a voluntary carbon market can bring a new revenue stream to 
forest owners, especially on marginal lands not suited for lumber 
production, forest owners will be able to make the significant 
investments necessary to optimize for both wood construction as well as 
carbon sequestration and storage potential.
Questions Submitted by Hon. Kim Schrier, a Representative in Congress 
        from Washington
    Question 1. Mr. Luoma, in your testimony, you mention the challenge 
of increasing participation and confidence in forest carbon markets.
    From your perspective, how can Congress support this effort? What 
role do you see the Federal Government playing in forestry markets 
specifically?
    Answer. The Federal Government should help private markets succeed, 
not take them over. For example, the Forest Service's Forest Products 
Lab is a successful, long-standing partnership that helps drive 
innovation in the marketplace, including the development of lifecycle 
analysis for wood in the built environment. We encourage this kind of 
collaboration and would like to see more of it.
    The government can also play an important role in providing high 
quality data, analysis and information sharing to help inform markets. 
The Forest Service's Forest Inventory and Analysis (FIA) program does 
this for private working forests in a variety of ways. We can further 
improve FIA to provide timely, useful data to inform carbon markets. 
This data will help drive collaboration between the public and private-
sector and ensure that all parties have access to the same rigorous and 
up-to-date data sets.
    There are likely other relevant roles of government that can help 
bolster markets for forest carbon and increased wood utilization. We 
have a long history of partnerships between USDA and producers. We 
should draw from that to help us build partnerships that strengthen 
markets.
    The House Agriculture Committee has three clear pathways to further 
climate-smart policies supporting private working forests and forest 
products:

  1.  Help expand markets for forest carbon, increasing accessibility 
            and credibility. If there is a strong market signal for our 
            forests to sequester and store more carbon, we will do just 
            that.

  2.  Encourage more sustainably sourced wood construction in the built 
            environment. It reduces the carbon footprint of the built 
            environment and supports forest retention and overall 
            carbon mitigation.

  3.  Improve forest carbon data. Markets for carbon and markets for 
            climate-smart construction need data to prove that climate 
            benefits are real. We have some of that data, but not all 
            of it. The U.S. government can collect and give credence to 
            the data so that markets, forest owners, and consumers all 
            have faith in it.

    Question 2. And given that around 40% of U.S. forests are publicly 
owned, what opportunities do you see for public-private partnership in 
the forestry carbon offset/market space?
    Answer. I'm sure there is a good deal of room for innovation in the 
carbon market space, but publicly owned forests are outside my area of 
expertise.
Questions Submitted by Hon. Doug LaMalfa, a Representative in Congress 
        from California
    Question 1. How is the risk of wildfires managed while marketing 
carbon credits? For example, the Colville IFM Project, which burned 
from the ``Bootleg Fire'' in August, represented 14 million tons of 
offsets for the California compliance market. Are there liabilities for 
buyers of these credits? Are there liabilities for landowners when they 
lose a project to natural disasters?
    Answer. Fire has always been a natural part of forest ecology in 
North America. Severe wildfires like those we see in national headlines 
are not, and they are a significant source of emissions. The EPA 
estimates that annual wildfires emit around 140 million metric tons of 
carbon annually, although that number varies from year to year. 
Wildfire is a challenge in drier forests in the West, but it is not a 
significant factor in the South where we operate. Fire is not 
unexpected, so all forest carbon protocols include a buffer pool. A 
buffer pool includes extra sequestered and stored carbon that 
participants draw on in case of a loss. Buffer pools act like an 
insurance policy and don't count toward carbon removals unless they are 
used.

    Question 2. Additionally, it seems that forests need to be working 
forests in order to be effective in sequestering carbon. If land is set 
aside and then never touched, there is going to be a fire risk. What do 
you see as some alternatives that working forests could use to cover 
the risk of wildfire as they sell carbon offsets?
    Answer. At The Westervelt Company, we own and manage both forests 
and mills. Forest owners seek to optimize the use of their resources. 
Forests that are highly productive for products will continue to 
provide wood for mills. One of the reasons we talk about markets for 
forest carbon and wood construction in tandem is because they are part 
of one system, and we have to take a systemic approach to fiber 
production and carbon storage and sequestration.
    Forest management is a critical part of successful carbon projects. 
In fact, one type of carbon project, Improved Forest Management (IFM) 
uses active forest management practices to achieve carbon offset goals. 
For this reason, many carbon projects adopt many practices that can 
also help them reduce fire risk.
Question Submitted by Hon. Dusty Johnson, a Representative in Congress 
        from South Dakota
    Question. Farmers are working hard to respond to company and 
consumer demands for more climate-friendly products, but they often are 
not rewarded in the market for the investments they make at the field 
level. As this Committee works to build additional market certainty and 
incentives that properly recognize the value that producers are 
creating, are there tools or practices that are already working in the 
marketplace that help farmers and ranchers to communicate the 
investment and see the financial benefits of decisions they are making 
at the farm level throughout the supply chain? As an example, in my 
home state, companies such as the Farmers Business Network are 
providing a way to certify low-carbon grain--and command a premium in 
the marketplace--already (including in partnership with POET and a 
pasta manufacturer) and can offer models for us to learn from.
    Answer. Forestry has long pursued a certification path to ensure 
sustainable practices in forest management. The U.S. is a global leader 
in sustainable forest management. Multiple, credible third-party 
certification systems are available in the United States to ensure 
sustainable management practices in support of a diverse suite of 
environmental benefits across carbon, water, and wildlife among others. 
This includes programs to certify forests to a forest management 
standard, chain of custody certification programs, and responsible 
sourcing programs provided by the Sustainable Forestry Initiative, the 
American Tree Farm System, and Forest Stewardship Council. In 
accordance with the clarification made in the 2018 Farm Bill, all 
qualified certification programs should be given equal treatment in any 
Federal procurement or other climate change policy involving private 
working forests. These programs are not specifically directed at 
``climate-smart'' activities, but they demonstrate how certification 
can be widely used and understood across a sector.
Response from David Antonioli, Chief Executive Officer, Verra
Question Submitted by Hon. Al Lawson, Jr., a Representative in Congress 
        from Florida
    Question. My district is home to a number of major universities 
including HBCUs. Mr. Antonioli, you stated that in order to meet zero 
global emission by 2050, the nation would need to rapidly scale up 
infrastructure to meet the demands of the voluntary carbon market. What 
types of programs should we be focusing on at an academic level to help 
prepare the future workforce to meet the demands in this growing 
market?
    Answer. We appreciate the positive outcomes that comes with the 
increased demand for a workforce trained in skills related to 
greenhouse gas and emissions management across many sectors of the 
economy. A wide variety of business, finance, policy, management, and 
science-based infrastructure will support an efficient scale-up of 
voluntary carbon market activity. We recommend programs covering 
greenhouse gas-related science and emission reduction practices, as 
well as programs that increase expertise in monitoring, quantification 
and verification of these practices. (This latter area is the only one 
mentioned here that Verra itself is directly involved in in the context 
of training for Validation and Verification Bodies).
    GHG management sits within a broader context of climate change 
science, mitigation and adaptation studies which are also critical 
areas of knowledge to ensure that the voluntary market contributes to 
national and global climate action imperatives. Finally, skills in 
carbon footprint analysis, carbon accounting and inventories are also 
critical for private and public sector actors.
Question Submitted by Hon. Eric A. ``Rick'' Crawford, a Representative 
        in Congress from Arkansas
    Question. Everything we are talking about today is intended to 
support farmer generated climate solutions. Many of us know the 
operational lift and financial risk that goes into adopting new 
practices. We need to maximize the portion of every incentive that 
reaches the farmer. One inhibitor that we see in the market today is a 
free, registry compliant, and accessible model for quantifying 
emissions reductions and sequestered carbon. The USDA has invested 
heavily in COMET-Farm, but it cannot be used today, without 
modification, to satisfy protocol requirements. What investment and 
research in COMET-Farm is needed to ensure carbon markets remain easily 
accessible to growers?
    Answer. While Verra has not analyzed in detail, or interacted with 
the USDA about COMET-Farm, we are aware of challenges in using the tool 
in its current form for the voluntary carbon markets. This includes the 
inability to quantify the uncertainty associated with emission 
reductions estimates, which is critical to ensuring the accuracy of the 
estimates. As a result, this has implications for ensuring that changes 
in practices lead to real emission reductions and removals.
    Another aspect that might enable the COMET-Farm to foster access to 
carbon markets is enhancing the transparency of the underlying datasets 
and calculations used to make estimates of changes in greenhouse gases 
when using the tool.
    Verra's VM0042 Improved Agricultural Land Management methodology 
has an accompanying module (VMD0053 Model Calibration, Validation, and 
Uncertainty Guidance for the Methodology for Improved Agricultural Land 
Management, v1.0) related to the use of models in agricultural 
greenhouse gas projects. We suggest that the COMET-Farm technical team 
review VMD0053 to identify areas of alignment and expansion for the 
COMET-Farm tool.
Question Submitted by Hon. Dusty Johnson, a Representative in Congress 
        from South Dakota
    Question. Farmers are working hard to respond to company and 
consumer demands for more climate-friendly products, but they often are 
not rewarded in the market for the investments they make at the field 
level. As this Committee works to build additional market certainty and 
incentives that properly recognize the value that producers are 
creating, are there tools or practices that are already working in the 
marketplace that help farmers and ranchers to communicate the 
investment and see the financial benefits of decisions they are making 
at the farm level throughout the supply chain? As an example, in my 
home state, companies such as the Farmers Business Network are 
providing a way to certify low-carbon grain--and command a premium in 
the marketplace--already (including in partnership with POET and a 
pasta manufacturer) and can offer models for us to learn from.
    Answer. The GHG accounting methodologies (protocols) used by Verra, 
and the VCS (Verified Carbon Standard) make use of a variety of 
practices and tools to support quantification and other practices that 
farmers engage in at their sites. All of these practices can be easily 
communicated through the project documentation that is required under 
the VCS Program and which can be found in the Verra Registry. In short, 
the registry provides a transparent means for project developers 
(either farmers or companies they are working with to register their 
activities and issue credits) to demonstrate the work they are doing on 
the ground and the results they are generating (i,e., the carbon 
removals they are achieving).
    Beyond the GHG benefits farmers are generating, there are other 
certification programs they can use to tell a broader story, about how 
their new practices are increasing resilience against floods and 
drought, enhancing habitat for wildlife, and improving water quality, 
to name a few. Verra's Sustainable Development Verified Impact Standard 
(SD Vista) \1\ and the Climate, Community & Biodiversity (CCB) 
Standards \2\ can be used to demonstrate such non-carbon benefits, and 
the certifications can also be used to label carbon credits issued 
under the VCS Program in a simple and easy-to-use manner. These 
certifications are also found on the Verra Registry.
---------------------------------------------------------------------------
    \1\ https://verra.org/project/sd-vista/.
    \2\ https://verra.org/project/ccb-program/.
---------------------------------------------------------------------------
Response from Callie Eideberg, J.D., Director, Government Relations, 
        Environmental Defense Fund
Question Submitted by Hon. Al Lawson, Jr., a Representative in Congress 
        from Florida
    Question. It has been well documented in this hearing that many 
voluntary carbon markets have programs that are time consuming, 
technical, and could require outside help. Because of this a 
disproportionate number of large operators are benefiting from these 
programs while small- and medium-scale operators struggle to gain 
market entry.
    In your opinion Ms. Eideberg, what can we do to ensure that carbon 
programs like these are assessable and beneficial to small family-owned 
farming operations, particularly minority and socially disadvantage 
farmers?
    Answer. Environmental Defense Fund offers the following 
recommendations to ensure that carbon market benefits flow to 
historically underserved producers and communities. Primarily, USDA 
should prioritize input from organizations that directly serve 
historically underserved producers. Additionally, there are several 
design considerations that can be incorporated to support the equitable 
access to market opportunities:

   Conduct targeted outreach to organizations that directly 
        serve historically underserved producers to raise awareness of 
        program funding. Offer pre-development grants to support 
        proposal development and submissions, include organizations' 
        staff time in project budgets, and consider deadlines to allow 
        appropriate timelines for project development and proposal 
        writing.

   Avoid burdensome application requirements and ensure that 
        eligibility criteria are defined broadly so as not to 
        disadvantage producers of color, small-scale producers and the 
        organizations that serve them due to scale or other operational 
        attributes--such as equipment availability or crop type that 
        differ along racial lines.

   Connect to communities of color and build capacity for 
        future engagement through the Historically Black colleges and 
        universities and minority serving institutions. Develop a USDA 
        internship program directly tied to climate-smart agriculture, 
        possibly coordinated through the Climate Hubs, to contribute 
        toward building a future workforce, as well as harness the 
        innovation and brainpower of capable future farmers, ranchers, 
        foresters, and landowners.

   Consider how best to include producers with a variety of 
        land ownership structures, small and low revenue operations, 
        and operations that lack clear title to their land.

   Allow funding for technical assistance and take a broad view 
        of what qualifies for technical assistance when it serves the 
        purpose of enabling the participation of historically 
        underserved producers, which may require funding in greater 
        amounts to support additional staff, equipment, and other needs 
        required to be able to participate in climate-smart commodity 
        certification and marketing initiatives.

   Consider carving out a specific amount or percentage of 
        climate-smart ag funding each year to be used toward projects 
        and overcome barriers to participation in climate-smart 
        commodity markets through collective action. For instance, 
        support producer cooperatives that can pool resources and 
        collectively generate climate-smart commodities, and prioritize 
        proposals that aggregate, or facilitate aggregation, of several 
        small, emerging or socially disadvantaged producers who can 
        pool GHG contributions and MRV processes.

   Consider ways to reduce the burdens of data management on 
        small and disadvantaged farmers who may not have the enabling 
        technologies and resources available, while maintaining the 
        integrity of the overall program. For example, rely more 
        heavily on standard emissions factor values for practices 
        implemented, fund their access to farm management information 
        systems that can get producers started on the path to data-
        driven decision, and fully fund any direct measurements.

   Track and disclose public funding recipients regularly and 
        adapt program funding quickly if required to target diverse 
        populations.
Question Submitted by Hon. Dusty Johnson, a Representative in Congress 
        from South Dakota
    Question. Farmers are working hard to respond to company and 
consumer demands for more climate-friendly products, but they often are 
not rewarded in the market for the investments they make at the field 
level. As this Committee works to build additional market certainty and 
incentives that properly recognize the value that producers are 
creating, are there tools or practices that are already working in the 
marketplace that help farmers and ranchers to communicate the 
investment and see the financial benefits of decisions they are making 
at the farm level throughout the supply chain? As an example, in my 
home state, companies such as the Farmers Business Network are 
providing a way to certify low-carbon grain--and command a premium in 
the marketplace--already (including in partnership with POET and a 
pasta manufacturer) and can offer models for us to learn from.
    Answer. EDF recently launched a new farm finance hub with resources 
to help farmers and their financial partners realize the full value of 
conservation investments. The website provides resources for finance 
and insurance professionals, farmers and advisors, and policymakers. 
business.edf.org/farm-finance/.
Response from David Milligan, President, National Association of Wheat 
        Growers
Question Submitted by Hon. Dusty Johnson, a Representative in Congress 
        from South Dakota
    Question. Farmers are working hard to respond to company and 
consumer demands for more climate-friendly products, but they often are 
not rewarded in the market for the investments they make at the field 
level. As this Committee works to build additional market certainty and 
incentives that properly recognize the value that producers are 
creating, are there tools or practices that are already working in the 
marketplace that help farmers and ranchers to communicate the 
investment and see the financial benefits of decisions they are making 
at the farm level throughout the supply chain? As an example, in my 
home state, companies such as the Farmers Business Network are 
providing a way to certify low-carbon grain--and command a premium in 
the marketplace--already (including in partnership with POET and a 
pasta manufacturer) and can offer models for us to learn from.
    Answer. Thank you for this question. The ability for farmers to 
capture an equitable share of the financial benefits tied to the 
commodity they produce will be critical for the expansion of these 
programs and efforts for low carbon, or climate-smart commodities and 
related ecosystem service credits. As farmers undertake new and 
different conservation practices and management strategies, they come 
at a cost--maybe different seeds, equipment, time and labor needed--and 
the overall approach must make financial sense for the grower. As 
growers, we cannot undertake more up-front costs that don't have a 
corresponding economic benefit and still stay in business. That isn't a 
sustainable farming operation.
    Today, the systems within commodity production are IP or identity 
preserved systems that allow growers to receive additional value for 
their specific crop traits and within wheat production, it is quality 
or protein content of the crop that can add value to the crop, or at 
least not result in a discount.
    I cannot stress enough the importance of what you are asking. 
Growers are historically price takers, and we must consider the impact 
of these programs to equitably share value back to the grower. There 
are also efforts like Field to Market that are working on supply chain 
sourcing projects that operate on a mass-balance commodity accounting 
approach, and may provide some up front financial incentives but don't 
necessarily offer the opportunity for growers to sell their crop for 
additional value.
Response from Jeanne Merrill, Policy Director, California Climate and 
        Agriculture Network
Question Submitted by Hon. Dusty Johnson, a Representative in Congress 
        from South Dakota
    Question. Farmers are working hard to respond to company and 
consumer demands for more climate-friendly products, but they often are 
not rewarded in the market for the investments they make at the field 
level. As this Committee works to build additional market certainty and 
incentives that properly recognize the value that producers are 
creating, are there tools or practices that are already working in the 
marketplace that help farmers and ranchers to communicate the 
investment and see the financial benefits of decisions they are making 
at the farm level throughout the supply chain? As an example, in my 
home state, companies such as the Farmers Business Network are 
providing a way to certify low-carbon grain--and command a premium in 
the marketplace--already (including in partnership with POET and a 
pasta manufacturer) and can offer models for us to learn from.
    Answer. Thank you, Congressman Johnson, for the opportunity to 
address your question, following the recent House Committee on 
Agriculture hearing on voluntary carbon markets in agriculture and 
forestry.
    The marketplace certification system that offers the most financial 
benefit and stable marketplace for farmers and ranchers who are making 
changes to their practices to produce climate-friendly products is the 
certified organic agriculture program, regulated by USDA. Increasingly, 
organic producers are making the connections between their low-input 
farming systems with their related benefits of increased carbon 
sequestration and reduced overall greenhouse gas emissions. The science 
supports these claims.\1\
---------------------------------------------------------------------------
    \1\ For a review of the science on organic agricultural production 
and greenhouse gas emissions reductions, please see: https://
calclimateag.org/wp-content/uploads/2018/12/Climate-Change-Solutions-
2018.pdf.
    Editor's note: references annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    However, there are opportunities for a diversity of farm operations 
to move towards climate-friendly production practices and possibly seek 
support in the marketplace for those benefits. To explore this further, 
we recently worked with Ferd Hoefner, former Policy Director with the 
National Sustainable Agriculture Coalition (NSAC) and other 
agricultural professionals to put together a memo outlining 
opportunities to use the existing authority of the Commodity Credit 
Corporation (CCC) to advance a diversity of climate change and 
agriculture measures, including market-based support for climate-
friendly agricultural products. The complete memo can be found here: 
https://calclimateag.org/wp-content/uploads/2021/10/USDA-CCC-Climate-
Resilience-and-Equity-Options-CalCAN-NSAC-10-19-21.pdf.
    Below is an excerpt from the memo on market-based measures, which 
could advance climate-friendly agricultural products with initial 
funding from the CCC. We welcome the opportunity to discuss this 
further with you and your staff. Thank you for your consideration.
          * * * * *

------------------------------------------------------------------------
 
-------------------------------------------------------------------------
    Specific Power #5--``Increase the domestic consumption of
 agricultural commodities (other than tobacco) by expanding or aiding in
 the expansion of domestic markets or by developing or aiding in the
 development of new and additional markets, marketing facilities, and
 uses for such commodities.''
------------------------------------------------------------------------

          In connection with the Grass-based Agriculture option under 
        specific power #1, expand the domestic market for grassfed 
        beef, lamb, goat, and dairy, pasture-raised pork, and pastured 
        poultry to reap the climate benefits of these grass-based 
        production systems by investing CCC dollars in market research. 
        In addition, revision of FSIS label approval process to allow 
        for investigation of potentially misleading claims would help 
        further grow and protect the market for these products.

                  https://www.jdsupra.com/legalnews/fsis-advises-on-
                animal-raising-label-70754/
                  https://sustainableagriculture.net/blog/fsis-
                grassfed-update-label-claim/
                  https://www.ams.usda.gov/services/auditing

          In connection with the Small Grains/Pulses/Alternative 
        Oilseeds option under specific power #1, fund commodity 
        production and marketing R&D projects to grow local and 
        domestic markets for small grains, pulses, and alternative 
        oilseeds grown in diversified, resource-conserving rotations 
        (as defined by the farm bill and NRCS). Include research on the 
        nutritional & GHG effects of adding these commodities to the 
        feed rations.

                  https://d3n8a8pro7vhmx.cloudfront.net/
                renewingthecountryside/pages/129/attachments/original/
                1569524314/Muckey_Final.pdf?1569524314
                  https://news.cals.wisc.edu/2020/10/29/project-to-
                expand-supply-chains-for-regional-grains-to-local-
                cafeterias/
                  https://practicalfarmers.org/2019/12/using-oat-
                variety-trial-results-to-guide-management-decisions/
                  https://www.grownyc.org/files/gmkt/Grains/
                marketing_v7_web.pdf

          In connection with the Agrisolar option under specific power 
        #2, fund production and marketing R&D for commodities (crops 
        and livestock) grown or raised using win-win agrisolar systems. 
        In addition, use CCC dollars to work with private-sector 
        partners to develop and stand up one or more process-verified, 
        climate-smart label for agrisolar commodities.

                  https://www.epa.gov/greenerproducts/introduction-
                ecolabels-and-standards-greener-products
                  https://www.ams.usda.gov/services/auditing/process-
                verified-programs
                  https://www.mdpi.com/2071-1050/13/5/2474/pdf
                  https://journals.sagepub.com/doi/full/10.1177/
                0013916521995473

          Expand mandatory funding for value-added projects supporting 
        agricultural commodities and products produced using methods 
        that improve soil health, sequester carbon, and reduce 
        greenhouse gas emissions, building on the excellent work being 
        accomplished by USDA RBCS through the farm bill's Value-Added 
        Producer Grant Program. VAPG fosters market-based, sustainable 
        farm income by enabling farmers and ranchers to retain a 
        greater share of the consumer food dollar. VAPG includes a 
        specific Congressional authorization for support for 
        commodities and products that add value based on how they are 
        produced, using market differentiation strategies. Focusing 
        that authority on climate-smart agriculture through new 
        investment in this authorized program and market 
        differentiation authority via the CCC would help expand 
        domestic markets and create improved income streams for 
        producers.

                  https://www.rd.usda.gov/programs-services/business-
                programs/value-added-producer-grants
                  https://sustainableagriculture.net/wp-content/
                uploads/2021/03/2021-NSAC-VAPG-Farmers-Guide.pdf

                                  [all]