Agricultural Economics Department


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Published in Cornhusker Economics, 01/14/2004. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska–Lincoln.


Global warming is caused when excessive amounts of carbon dioxide, nitrous oxide, methane and chlorofluorocarbons trap the heat from solar energy in the atmosphere. During the past two centuries, soils have been a net source of greenhouse gases, especially carbon. A recent trend in policy dealing with global warming has been to investigate the possibility of utilizing agricultural practices to aid in lessening the global warming problem, rather than contributing to it. One focus has been to increase soil organic matter, thus using the soil as a sink for carbon. Other benefits of increasing organic matter (sequestered and stored carbon) levels include elevated soil water holding capacity, increased retention of plant nutrients, improved soil aggregation, mitigation of drought and improved overall soil quality. The U.S., in its negotiations regarding the Kyoto Protocol, has stressed the importance of using agricultural land as carbon sinks in meeting the challenge of climate change. Intriguingly, the Iowa Farm Bureau recently signed an agreement with the Chicago Climate Exchange to serve as an aggregator of farmers and farmland. The idea is that a price coming through buyers who are parties to the Chicago Climate Change would create an opportunity for farmers in Iowa to increase their use of farming practices that result in sequestering more carbon in farm soils. The Bureau would bring a price to farmers based on the price the Bureau negotiated with the buyers of storage through the Chicago Climate Exchange.