Defining Carbon Markets and Offsets 

Big polluters and their financial backers — from oil and gas companies to Big Ag and Wall Street banks — want to continue destroying the climate while paying farmers, foresters, and others to ostensibly offset their greenhouse gas emissions through “trapping carbon” in soil and trees. They then plan on establishing markets to trade that carbon. 

But how exactly do these markets work? And why are major corporations like Bayer-Monsanto so invested in them?  

Carbon Markets Explained 

Carbon markets are markets in which polluters can buy carbon “credits,” or “offsets,” and claim that they reduced their carbon emissions. For instance, a private forester could claim to have “sequestered” (trapped) carbon in their trees, and then sell that it “offset” its carbon emissions, even though it may have bought credits without changing its own emissions or practices.  

In Cap-and-Trade markets, or Compliance Markets, such as in California, corporations are required to lower their carbon emissions below a “cap.” However, they can buy carbon offsets instead of, or in addition to, reducing their own emissions to meet the cap.  

Voluntary carbon markets are defined as carbon markets where companies aren’t required to lower emissions but choose to buy carbon offsets as a way to meet internal sustainability goals. 

How do Carbon Offsets Really Work?  

In terms of agriculture or forestry, most carbon offsets are created by claiming that carbon is trapped in either trees or soil. The amount that can be claimed is typically based on models and estimates, not actual measurements of how much carbon is sequestered. Many scientists have pointed out serious flaws in these models. The amount of carbon claimed may not reflect the reality of how much carbon is actually sequestered. And most carbon markets operate on a ludicrously short timeline. To actually address climate change, these projects would need to sequester significant amounts of carbon for tens of thousands of years. Yet, carbon market projects often have a timeline of five or ten years!   

Different companies or governments can define carbon markets and offsets differently. 

Impacts of Carbon Markets 

More than a decade of carbon trading has shown that carbon markets are ineffective at reducing climate pollution. Carbon markets have consistently been gamed to benefit polluters, failed to decrease emissions in line with science, and even led to increased emissions in many cases. They have been plagued by fraud  and a lack of environmental integrity. 

Carbon markets perpetuate environmental racism, compromise human rights, and undermine healthy, sustainable, and resilient communities and food systems. This is because carbon trading has exacerbated pollution hotspots in low-wealth communities and communities of color in the U.S. and throughout developing countries by allowing mega polluters to continue to pollute.  

Companies that buy carbon offsets, rather than reduce emissions, often reside in low-income communities and countries. Meanwhile, companies in wealthier communities, which already experience less pollution, are more likely to sell carbon offsets, meaning they’re reducing emissions and their own pollution.  

Inadequate safeguards have led to violations of the rights of Indigenous Peoples and forest dwellers, land rights conflicts, and environmental devastation. Carbon markets make land more valuable; corporations are incentivized to acquire land that can generate ostensible carbon offsets, even at the expense of these communities.  

Big Pesticide and Carbon Markets 

Carbon markets also allow Big Pesticide corporations to increase their power over the food system. Companies like the Bayer-Monsanto corporation define carbon markets and offsets in a way that promotes their own genetically engineered seeds and pesticides. For example, pesticide companies assert that conventional no-till agriculture is a regenerative agriculture practice that increases soil carbon sequestration, but the latest science debunks this assumption. And yet, companies like Bayer are generating lucrative carbon credits by paying farmers to do conventional no-till, which depends heavily on Bayer’s proprietary genetically engineered seeds and toxic herbicides. 

These programs are often not designed for smaller farms or farms using ecologically regenerative agriculture practices. Generally, the largest farms have the most to gain from carbon payments, which could worsen the trend of consolidation leading to fewer farmers overall and bigger industrial farms. In order to participate, farmers must contractually commit to years or even decades of more expensive practices to produce ostensible carbon offsets for Big Pesticide corporations with minimal guarantees they’ll make money themselves.  

Real Agricultural Climate Solutions 

Big Pesticide corporations like Bayer-Monsanto may define carbon markets through their corporate spin as a way to fight the climate crisis through agriculture, but government programs to promote truly regenerative agriculture practices can help mitigate climate change and make farms more resilient to a shifting climate without lining corporate pockets.  

The US Department of Agriculture administers programs improve the sustainability of farms across the country.  With the right programs, we don’t need carbon markets to make American agriculture a real climate solution.