CARBON CREDITS
Farmers are encouraged to plant cover crops and reduce tillage to improve soil health , water quality , and biodiversity . This can help make crops more resilient to global warming . Farming is currently a net contributor to climate change , and it is also at higher risk due to climate change . Currently , there are programs across the United States that work with farmers by taking measurements to determine how many carbon credits each farm would produce and , therefore , how much money the farmers would get . Then , they pre-pay the farmers an amount that is verified by various environmental organizations that monitor the North American carbon market to ensure integrity , transparency , and financial value . The amounts differ depending on the farm and the current price in the carbon credit market .
TRADING TURNOVER OF THE VOLUNTARY CARBON MARKET ( VCM ) HAS INCREASED STEADILY OVER RECENT YEARS , RISING TO JUST UNDER $ 2 BILLION IN 2021 . A TOTAL OF 60 % OF FORTUNE 500 COMPANIES HAVE SET CLIMATE TARGETS , AND THESE COMMITMENTS INDICATE SUBSTANTIAL INCREASES IN DEMAND FOR VOLUNTARY CARBON CREDITS .
There are requirements to sell credits , which are established by various environmental groups and registries .
As this process and market continues to grow and expand , various insurance companies are jumping into the market to increase confidence in the VCM . The solution for Agricultural Carbon Credits is to treat carbon credits as a commodity that the individual farmer or ag organization creates and controls . A carbon credit — one metric ton of CO2 sequestered or abated — should be owned and controlled by the individual farmer or ag organization that creates it .
Establishing standards and guidelines on measuring and verifying a carbon credit can be done accurately and affordably through an insurance program with independent verifiers and auditors . Carbon credit insurance assures the rigor and transparency in creating carbon credits in agriculture . Carbon credit insurance transforms the carbon credit into a financial instrument that allows it to be traded and placed on a financial statement as an asset . Carbon credit insurance establishes accountability in the carbon credit market while bringing confidence to the carbon credit market and the buyers of carbon credits .
If you ’ re involved in agriculture and have questions , the knowledgeable staff at Nesbit Agencies is always available to help . +
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