On February 17, 2020, Amazon CEO Jeff Bezos announced he would spend $10 billion to address the climate crisis. Plenty of people have chimed in about how they think that money should be spent and to offer their thoughts on how much of a dent $10 billion will make toward evading catastrophe. Whether the funds come from Jeff Bezos or US taxpayers, knowing how far a dollar will go toward reducing carbon in the atmosphere plays an important part in getting the enormous positive impacts we need to save this planet.
Readers of EPIC’s blog have probably noticed that we often tout Pay for Performance as a way to get measurably better environmental outcomes while spending less money than status quo approaches. And given the USDA’s announcement that they aim to reduce the environmental footprint of the agriculture sector by 50% by 2050, we wanted to dig into the issue of conservation practices on farms in the US. What if we could easily compare—in an apples-to-apples kind of way—the price of achieving carbon sequestration from different on-farm conservation practices and find out which practices offer the best results for the least expense? Turns out USDA is already doing that, just not intentionally.
We collected information on USDA’s Natural Resources Conservation Service (NRCS) payment rates for nine common conservation practices in all 50 states and then used a carbon sequestration model to arrive at a per-metric-ton price for each practice. You can view and interact with the map here. Basically, if you can sort out how much carbon is being sequestered on a per-acre basis on farms undertaking conservation practices, and you know the price per acre for those practices, you can get an idea how much it costs to sequester a metric ton of carbon. What’s surprising is how much those payment rates vary from state to state. For instance, in Mississippi, Nutrient Management costs $2.77 per metric ton of sequestered carbon while the cost in Vermont is seven and a half times that, at $20.75. And Riparian Herbaceous Cover costs $65.19 in Nebraska but $5,460.48 in Connecticut. That’s a difference of nearly 84x!
There are good reasons these prices vary. Some states may have several activities rolled up into one practice, artificially driving up the price in those states relative to others. And carbon sequestration rates vary based on natural ecosystem characteristics. If you’re familiar with these programs and you can help us zero in on more precise prices for carbon sequestration outcomes of each practice, we would love to collaborate with you. And ultimately a lot of the variation is because these practices are not set up either to be outcome-based or to pay for carbon – they are paying for nitrogen and phosphorus benefits, wildlife habitat and other environmental gains. So what looks like inefficiency on carbon pricing may actually be really efficient when you look at nitrogen pricing.
But the point of an exercise like this is to have an honest discussion about how we pay for conservation outcomes, and then how we could do a better job of maximizing our impact per dollar spent. Within the context of the existential threat that is climate change, should we consider focusing our funds toward carbon sequestration in Nebraska rather than Connecticut, if we can get 84 times more carbon sequestration for the same cost? And while there might be very good reasons not to make this such a black-and-white discussion, are they good enough to change how we think about this issue when we truly cannot waste any time delivering outcomes?
This table shows which states carry the lowest and highest carbon sequestration rates for each practice we analyzed, to illustrate the range of prices we need to reconcile. When faced with these price differentials, why wouldn’t you focus efforts in the “cheapest” states and on the “cheapest” practices?
When consumers buy products on Amazon, they think about how they can get the best deal by comparing prices for similar products. Other things may factor into their decision-making, like brand name, features, color or other measures. But ultimately, this comparison shopping is just a normal part of buying things online. We could borrow this comparison shopping idea and use it to inform the process of buying environmental outcomes to make those billions of dollars go as far as possible toward saving the planet.