Episode 66 Unlocking the Potential of Carbon Credit in Agriculture with Brent Sohngen

“Just when you think you’ve got it figured out, something new happens.” 

That’s what Brent Sohngen, an environmental and resource economics professor at The Ohio State University, says about the energy sector.

“It’s always changing,” explains Sohngen. “We’re in a transition phase right now with a move toward renewable energy.”

One of those renewable energy sources is carbon. And in the agriculture industry, it’s of particular interest.

“Farmers can produce crops, but they can also produce another commodity on their land called carbon,” says Sohngen. 

Due to concerns about climate change, in order to reduce carbon in the atmosphere, one solution is to store carbon on land through certain farming practices that can capture and hold carbon. 

“Things like no-till take additional carbon out of the atmosphere and keep it stored in soils for long periods of time,” shares Sohngen.

Methods like no-till farming or conservation tillage, leave more crop residue (which is made up of 50% carbon) on the field to decompose and become part of the soil. 

Cover cropping, grasslands, woodlots, and wetlands are also farming activities that keep carbon out of the atmosphere and stored underground in root systems.

“It turns out that people are willing to pay for that,” says Sohngen. “That’s where the carbon credits come in.” 

Unlike traditional crops like corn or wheat that are harvested and sold, carbon remains on the farm and can be sold as a commodity because of its sought-after benefit of reducing atmospheric carbon. 

“It’s a product you can potentially sell,” explains Sohngen. “Our projections suggest that the number of people willing to pay for that is just going to increase over time.” 

While it may not be worth much today, Sohngen says it holds potential future value. 

“We think in the next five to ten years, it’s going to be worth considerably more than it is today.” 

When it comes to demand, farmers have the unique opportunity to fulfill the need for carbon storage and capitalize on it.

“Over 2,000 companies have made commitments to reduce emissions by 50% by 2030,” says Sohngen. “However, there’s not enough renewable energy out there right now for them to meet those commitments. They’re going to have to find and pay for these offsets in other ways.” 

Since fully eliminating emissions will be challenging for most, buying carbon offsets stored on farms becomes a solution.

“We already account for a lot of the carbon that farmers remove from the atmosphere in our national carbon counts,” says Sohngen. “We remove 10% of the total emissions in the U.S. from agriculture and forests already. The question is can we make that number bigger?” 

With companies needing to meet emissions targets, the soil beneath our feet may hold more than just nutrients for crops – it may hold the key to helping mitigate climate change. 

For more resources and advice on what farmers should know about carbon credits, listen to the full episode! 

Here’s a glance at this episode:

• [01:00] Brent discusses his career in agriculture, particularly focusing on environmental economics and extension, and his interest in carbon credits. 
• [02:42] Brent highlights the two classes he teaches at Ohio State, Introduction to Sustainability and Energy Economics.
• [03:49] Brent emphasizes the constant changes in the energy sector. 
• [06:00] Brent explains the carbon credit system for farmers and how they can potentially earn from carbon storage activities. 
• [09:49] Brent shares why a privately funded model for financing the significant investment required for carbon storage in farm landscapes would be beneficial. 
• [14:47] Brent explains how carbon offsets allow companies to potentially achieve net zero emissions by investing in agricultural practices that sequester carbon.
• [18:49] Brent encourages farmers to explore resources like Ohio State’s Carbon Academy to better understand carbon credits.
• [21:06] Brent defines climate change and talks about the confusion between weather events and climate change as it relates to increased atmospheric carbon. 
• [28:45] Brent advises farmers on what to do before making carbon-related decisions and shares where they can find more resources and information.

Resources mentioned in this episode:

• Carbon Academy - https://carbon.osu.edu/carbon-academy
• Water Cooler Economics - https://u.osu.edu/aede/

 

Connect with Brent Sohngen - sohngen.1@osu.edu

Connect with AgCredit on Facebook, Twitter and Instagram

Share questions and topic ideas with us:
Email podcast@agcredit.net

Transcription

Voiceover (00:08):Welcome to AgCredit Said It. In each episode, our hosts sit down with experts from all parts of the agriculture industry to bring you insights and must-have information on all things from farming to finances, and everything in between.

 

Phil Young (00:26):Welcome back to another episode of AgCredit Said It. I'm Phil Young, and I'll be your host. Today we're talking with Brent Sohngen, professor of environmental and resource economics in the Department of Agriculture, Environment, and Developmental Economics at The Ohio State University. We brought Brent onto the podcast today to talk about carbon credits as well as the climate.

 

(00:45):Welcome, Brent.

 

Brent Sohngen (00:47):Hey. Thanks a lot. It's great to be here.

 

Phil Young (00:49):Yeah. Let's start with learning a little bit about you. Tell us about your background, your role at Ohio State, and how you became interested in the topic of carbon credits and carbon trading.

 

Brent Sohngen (01:00):Yeah, sounds good. I've been at Ohio State now for a long time. I guess I started in '96. I actually have a pretty heavy extension load. I do environmental economics and extension. I spent a lot of time, in the early years, the '96 Farm Bill started out with a big increase in the number of conservation programs in the Farm Bill. We spent a lot of time, in those early years, trying to explain some of those programs, like the EQIP Program, expanded CRP, and other kinds of things to farmers. That was pretty exciting, I did that for a number of years. My extension role has diminished over time, but I still do some work in that area.

 

(01:32):We have just spent a lot of time thinking about carbon credits recently. But that's been an issue for a long time. I think back to the early 2000s, that was another period when carbon was a big issue. There was a guy who decided to start this thing, the Chicago Climate Exchange. On the Chicago Climate Exchange, they allowed these carbon offsets that farmers could potentially use. Farmers could do things like conservation tillage and no-tillage. Cover crops weren't such a big issue back then. But CRP practices, where you take land out of production and put it into grasslands or trees could be used as carbon offsets. This was a thing, even way back then. This was something we were working on.

 

(02:11):In the early 2000s, it got big when Obama was elected in 2008 because they tried to pass this big cap and trade program, which a lot of people didn't end up liking and never ended up passing. Then it disappeared for about 10 years and came back again about six or seven years ago. I've been at this carbon credit thing for a long time. Doing it here at Ohio State, partly in extension, and partly just doing it as a research activity.

 

Phil Young (02:38):Nice. Do you still teach? Do you do class loads right now?

 

Brent Sohngen (02:42):Correct. Yeah, I teach two classes here at Ohio State. I teach one class, Introduction to Sustainability. That's a new class. Well, it's not new anymore. I've been teaching it for about 10 years. That's a lot of fun. We have a sustainability major here at the university, so we teach that. I teach that with someone from the School of Environment and Natural Resources. My job is to be the heavy-hitter on economics and make sure people are reminded that sustainability isn't just about making the environment cleaner, but we also have to make sure that our lives are better. Economics can help do that. That's one thing.

 

(03:13):Then I teach an energy economics class. That's a lot of fun. That class is super interesting. We start with traditional energy and talk about the history of traditional energy, and where we got our energy for the last 150, 200 years. A heavy focus on the U.S., but there's some international in there as well. Then we take it all the way through the proposed energy transition. We're in a transition phase right now, with this proposed move toward renewable energy. What's amazing about the energy sector is that it has a history of transitions.

 

Phil Young (03:48):Yeah.

 

Brent Sohngen (03:49):Just when you think you've got it figured out, something new happens. All of a sudden, we're coming up with a new source of energy. Who thought, 20 years ago, natural gas would be as big a supply in the U.S. as we've had today, with this fracking revolution in the Eastern U.S.? Who would have thought that Ohio would be one of the biggest producers of natural gas in the U.S.? It's an interesting thing.

 

(04:13):There's nothing about the energy sector we should say that's stable, because it's just always changing. We seem to be going through a transition right now to renewable energy. That's the fun thing about teaching that class, is to talk about these transitions. And help students understand that, if you're going to go into any sector, the ag sector or any business sector, you've got to consider energy because where you get your energy is an important part of whatever you're doing. Your supply chain is, it just really doesn't matter what industry it is. Students get it, they love it. It's a lot of fun.

 

Phil Young (04:43):That's awesome. Yeah, we have to have you back on to talk about energy. That'd be a fun topic, just to dive into all that. Just basically teach your class maybe for an episode.

 

Brent Sohngen (04:53):It's a lot of fun.

 

Phil Young (04:55):Yeah.

 

Brent Sohngen (04:55):Here in Ohio, it's kind of crazy with renewable energy, and we worry about using ag land for solar energy right now. It's a big issue.

 

Phil Young (05:05):Yeah.

 

Brent Sohngen (05:05):We never would have thought of this 15 or 20 years ago. These things were on the horizon, distant things. And all of a sudden, they're in your face and you have to talk about them. It's fun to use economics to talk about that because it turns out that it's a useful subject – talking numbers.

 

Phil Young (05:21):Oh, yeah.

 

Brent Sohngen (05:22):A lot of people don't like to talk numbers, but sometimes talking numbers is useful.

 

Phil Young (05:26):Oh, yeah. You gave a little bit of history on this, but just the history of carbon credits. I don't know if you want to dive any deeper than maybe what you did, and how they work, how that intersects with agriculture. I know a little bit about it. I remember cap and trade being a big thing back in, like you said, 2008. That was a huge topic of discussion with carbon credits back then.

 

(05:52):For someone who knows zero about it, can you give the 101, or basics from start to finish? 

 

Brent Sohngen (06:00):Sure. Yeah. Carbon credits, they're a unique feature of agriculture and the land. I like to think of them as landowners who, in this case, are in a great position. They can produce crops, but they can also produce another commodity on their land called carbon. There's this need from the rest of the world where we need a place to store carbon that's not in the atmosphere. There's this big worry we're sucking all this carbon out of underground and putting it up in the atmosphere. And there's the worry that climate change is happening. The question is well, is there any other place we can put that carbon? It turns out that on the land is one place we could put it safely and successfully. Farmers can do that with practices that they potentially adopt on their landscape.

 

(06:46):Things like no-till take additional carbon out of the atmosphere and keep it stored in soils for long periods of time. That's a benefit to the rest of society. Farmers can provide that benefit by converting over to no-till or to conservation tillage, so higher levels of residue on their fields. That residue is 50% carbon. Most plant material is 50% carbon. That residue, it's there, it's decomposing. But it's also moving through the soil at different rates, in the lower soil profiles, and can be kept there, stored there for long periods of time.

 

(07:20):Things like cover cropping. It's a big issue now for water quality, but it turns out that also can take carbon out of the atmosphere and keep it in soils. Grassland-type activities with CRP. Any time you have highly erodible land, you move that into CRP-type practices where you're growing grasses. You're taking carbon out of the atmosphere, storing it in grasses just for the year. But those root systems are building up, especially if they're perennial grasses. Those root systems store an enormous amount of carbon underground. That can be kept there fairly stable for a significant period of time. Tree growing. Some farmers have woodlots on their farms, they have wetlands on their farms. Those are also activities that keep carbon out of the atmosphere.

 

(07:59):All these activities are basically activities that keep carbon out of the atmosphere. They provide a huge benefit to the rest of society. It turns out that now people are willing to pay for that. That's where the carbon offset comes in. It's the commodification of carbon stored on the farm. Unlike the traditional commodities of corn, soybeans, wheat, et cetera, which are shipped off the farm. They're harvested and removed. The carbon stays on the farm. It's still a commodity. It's an undifferentiated product. It's just there on your farm. It's a product you can potentially sell. It's the storage of that carbon on the farm that is the benefit to the rest of society. It turns out there are people willing to pay for that now.

 

(08:42):Our projections suggest that the number of people willing to pay for that is just going to increase over time. The reason is that people take climate change seriously elsewhere in society and they're really worried about it. That creates the demand for this ability that farmers uniquely have to store carbon. Carbon is a precious resource, or is going to become a more precious one in the future. I like to think of it as just a commodity, something that we have to learn a little bit more about and figure out ways to do a better job of managing it and maintaining it on our farms. But it's a commodity that could be worth something. It turns out, it's not worth much today. But we think in the next five to 10 years, it's going to be worth considerably more than it is today.

 

Phil Young (09:28):What is that? You mentioned the value of it. This is a way for farmers to make money you're thinking, in the future? How do you think that model would work? Is that through government programs? Is that a private thing where people pay for it? What does that look like?

 

Brent Sohngen (09:48):It's going to be a little bit of both.

 

Phil Young (09:48):Yeah.

 

Brent Sohngen (09:49):I personally have a preference for a private program. Number one, I shouldn't say this, but I don't have a lot of faith in the government to carry out a program like that, that would be sufficient. Number two, the financing issue is not available for the government. There's not enough government money.

 

(10:08):If you take the climate change problem seriously, as a lot of people do, the quantities of carbon that need to be kept out of the atmosphere and maintained in farmed and forested landscapes are huge. This is a $200 billion a year proposition actually. If you think about a $200 billion-a-year investment, if you actually want to do it at the level... You hear discussions of, "Let's keep temperatures from going above one-and-a-half degrees above historical levels," or two degrees. These are just thresholds people have. Well, the amount of reduction of carbon emissions we have to do to achieve those two levels, which I don't know if I agree with them. I don't know if they're economically feasible. They're certainly ecologically important to think about. But economically, they're big, big asks.

 

(11:00):But if we're going to do them, you need to spend $200 billion a year on the landscape. The government's not up to that. We don't have any government that can spend this kind of money on farmers and foresters across the world to store carbon in the landscape. We have to turn to the private sector. My hope is that a private sector emerges to do this because I think they'll be more successful at it. They'll be able to bring the finance to bear on it. I think it'll be ultimately better for landowners. I think they'll have more trust in it if it's the private sector rather than the government doing it.

 

(11:31):Because first of all, as we know in the U.S., every four years, the government seems to change. Programs change, and policies change. We just don't get any certainty with that. As uncertain as the market is, there's a lot more certainty with the market. I'm a proponent of let's leave this in the market. Let the private market manage it. Let's hope that is the way we go in the future. If that is the way we go in the future, then my sense is that prices for carbon should rise. They're really low today. They're less than $1, maybe $1 to $2 a ton of carbon dioxide to store it. That's minuscule.

 

(12:08):If you're going to convert no-till, a payment of 50 cents to a buck an acre per year, which is nothing. That's not going to incentivize anything. But you get that up to $10, $20, $30 a ton, suddenly some of those practices on the landscape become really, really worthwhile. A farmer can be paid $3, $4 an acre per year to do no-till. It's not a huge amount of money, but no-till doesn't look to be that expensive anyway. It's a labor-saving practice. It's something that can reduce the cost of oil, gas, diesel, whatever, to drive across the field because they're doing it less times a year. There are some savings involved with that. They may take a yield hit, but maybe $3 to $4 would cover that yield hit. I don't know.

 

(12:54):There's, at the margin, lots of places that could be, when you get to $30, $40 per ton carbon, $3 to $4 per acre no-till practices, that could be worthwhile. That could increase maybe $15-20, to $30 for cover cropping and doing it on an annual basis. All of a sudden, if we see these prices go up, we start to see an increase in the money that farmers could make from doing these practices. I think we already have a number of companies out there doing this, so I think what we're going to see is more of them come along. Some consolidation potentially, in that industry, as well. That's just going to make it easier for farmers to participate.

 

(13:36):I think this is still five to 10 years off.

 

Phil Young (13:38):Okay.

 

Brent Sohngen (13:39):But the demand side is what's interesting that people should look at. There are a lot of companies out there, over 2,000 companies, that have made commitments to reduce emissions by 50% by 2030. Those are the companies that would want these offsets because there's not enough solar energy, there's not enough wind energy out there for them to meet those commitments. They're going to have to have these offsets.

 

(14:06):Ultimately, it's the inability of our society, really not so much our society but the market, to put enough financing into renewable energy quickly enough that it's going to create the demand for these offsets on the landscape. And going to increase the prices for those. It's five to 10 years away, but it's going to happen.

 

Phil Young (14:28):You mentioned something about the offsets. Can you walk people through what is an offset and how does that come into play? 

 

Brent Sohngen (14:38):Yeah, sure.

 

Phil Young (14:39):Why would other companies not in agriculture be like, "Hey, I want an offset to help with metrics that I'm trying to meet?" Can you walk them through that?

 

Brent Sohngen (14:47):Sure, yeah. Lots of these companies... I live here in Ohio, in Columbus, and we have this huge Intel plant that's being built out on the east side of town. Intel is building a chip manufacturing facility. These chip manufacturing facilities use a lot of energy. They're going to want to use and buy up renewable energy because they want their chips to be "clean" chips, chips that don't have carbon emissions associated with them.

 

(15:13):Well, there's not enough renewable energy in Ohio right now to meet their needs, as well as the needs of every other company that said they want to reduce their emissions down to zero by 2030. Not every company but a lot of them, are saying, "No, we really want to get our emissions down, but we're still getting energy from natural gas, a little bit from coal." Those two sources release carbon into the atmosphere. What are we at, three or four percent of the grid in Ohio is renewable energy now, so it's a minuscule amount.

 

(15:49):If those companies want to achieve net zero by 2030, and remember I'm using the word net there, so if they want their emissions to be zero, they either have to be using all renewable energy, or for whatever renewable energy they can't purchase, if they're purchasing energy that's produced with natural gas... Remember, there are transportation emissions, which are mostly using diesel and gasoline, which are carbon-emitting sources so they've got to offset those as well. If you can't get those to zero yourself, which most companies can't, these offsets are then things that they can buy.

 

(16:27):What they want to do is they want to then go to a farm... The company doesn't want to do this, but they want someone else, like a Nori, or an Indigo Ag, or Bayer Ag, or whatever, to go out and negotiate with landowners to create new carbon storage on their farms. That new carbon storage on their farm is what is this negotiable asset. It's a commodity, a carbon commodity, that then becomes an offset. It's a reduction from the atmosphere that then, Intel, Amazon, Microsoft, and whoever has a commitment to become net-zero, use in lieu of their inability to go out and buy total renewable energy. Does that make sense?

 

Phil Young (17:13):It does, yeah. 

 

Brent Sohngen (17:14):Basically, it's a commodity produced by the farmer, which is a carbon removal from the atmosphere, which is then commodified and sold off to an industry that can't become net zero because there's just not enough renewable energy out there.

 

Phil Young (17:27):Yeah. It's this asset they can buy to basically subtract from their carbon emissions to get them closer to zero.

 

Brent Sohngen (17:33):Correct.

 

Phil Young (17:33):Yeah. Gotcha.

 

Brent Sohngen (17:36):The question we always get on this is, "Oh, is it real? Is it legitimate?" Well, let's just say absolutely, 100% it's legitimate. There's no doubt that no-till stores carbon in soils. There's no doubt that trees suck carbon out of the atmosphere and store it in tree material, in the roots, etc.. There's no doubt that many of the activities that farmers can do on their farms take carbon out of the atmosphere. It's a legitimate activity.

 

(18:03):There are some quantification issues that need to be worked through. But it's a legitimate activity that can remove carbon. In fact, we already count a lot of that carbon that farmers remove right now from the atmosphere in our national carbon accounts. It's already accounted for. It's 10%. We remove 10% of the total emissions in the U.S. in agriculture and forests already. That's already accounted for. We know it's already happening. The question is can we make it bigger? And then commodify that, that bigger number.

 

Phil Young (18:35):Interesting. Okay. Is there anything else you think farmers should know about carbon credits or resources they can go to, to figure out how they can participate or just gain more knowledge on it?

 

Brent Sohngen (18:49):Yeah. There are growing resources within the extension community. I think if you just do a look around. Go to your state extension office and check that out. We have some resources here in Ohio. I've noticed some really good ones at Wisconsin, Iowa State, and Penn State. A lot of different extension services have people who've written up really good information on what are these carbon credits, what are the activities that farmers can do on their farms, etc. That information is more widely available.

 

(19:25):At Ohio State, we have this thing called a Carbon Academy, which is emerging. There are more training resources for extension agents right now, to help them become more familiar so they can communicate with their own clientele on this down the road. But I would say over time, that'll become more of a public resource, my guess is, for farmers to learn more about this.

 

(19:47):There are companies out there that are doing the buying and selling. I've talked to a few of the individuals at those companies and they're really good. They're really smart about this, they know what they're talking about. They all have different approaches, so there's some confusion in the farming community about the different approaches that the companies take for how they are commodifying carbon, and how they're buying and selling it. My best advice on that is just listen, and then keep thinking about it, and talk to other people about it, and don't make an immediate decision.

 

(20:20):Yeah. There are emerging resources now, where I think people can get access to that. You can feel free to give out my email address if people have questions.

 

Phil Young (20:28):Okay.

 

Brent Sohngen (20:28):They can email me, and I'm happy to just send them information I have, or help them find resources in their own state that would be useful.

 

Phil Young (20:37):Nice. Okay, awesome. Yeah, we'll do that. We'll put that in the show notes.

 

(20:40):Switching gears a little bit, I know you do some work in climate and climate change. I wanted to talk about that. Climate change is a buzzword of sorts today. Before we jump into that topic, when we talk about climate change, can you define what you mean when you talk about climate change? And what that is, and why maybe it's a hot topic?

 

Brent Sohngen (21:01):Yeah. It's a hot topic all right, yeah.

 

Phil Young (21:03):Yeah, yeah.

 

Brent Sohngen (21:06):Climate change is interesting. Climate change, it's the change in long-term climate norms over time. We're looking at long-term averages changing over long time periods.

 

(21:20):I think how it becomes a buzzword, I get the same frustrations I think many of your listeners probably do, is that every time there's a hurricane, or a tornado, or a big rainstorm, it's immediately tied to climate change. You're like, "Well, that's a weather event. That's not climate change." I've been told climate change is some sort of long-term phenomenon, and all of a sudden you're telling me that a hurricane is caused by climate change. I think there is a lot of confusion out there. It's obviously, I don't want to say obviously, but it's probably caused I think by the media, in a sense. That they just jump on terms. They hear this stuff and they just throw it out there. And say, "There's a few extra tornadoes, so those were caused by climate change." I think we do need to slow down a little bit, in terms of using the word and just throwing it around all the time.

 

(22:10):Climate change is long-term. There's an increasing carbon atmosphere, there's very little doubt about that. The carbon in the atmosphere has been increasing. What we know from carbon in the atmosphere is that it warms the atmosphere. It's the part of our atmosphere that actually makes Earth a temperate place where humans can survive. That's true. We know that extra carbon in the atmosphere will make the atmosphere warmer. It'll trap more heat in the atmosphere, not allowing that heat to go blasting back out into space. That will cause changes over time.

 

(22:44):We've already observed about one-degree Centigrade of global warming on average around the world. So far, here in the Midwest where I live in Ohio, slightly more than that, maybe 1.2 degrees Centigrade of average warming. Or about two degrees of Fahrenheit of average warming so far. We've also achieved some increasing rainfall, although it's seasonally different. A little more sometimes a season, a little less in others, but on average a little bit more. We've gotten, in the last 50 years or so, more rainfall and a little bit warmer temperatures both in the wintertime and the summertime. These are the effects of climate change.

 

(23:21):We know, as well, and this is the confusing part to a lot of people, is that as climate change happens, as the atmosphere warms, it does create conditions where rainstorms can become a little more volatile. So no, the rainstorm wasn't caused by climate change, but it is plausible that, because of climate change, a rainstorm becomes an inch-and-a-half in an hour, rather than an inch in an hour. Something like that is plausible and is a predicted effect of climate change. The same thing about tornadoes is that we could potentially see tornadic activity become a little more intense as a result of climate. Same thing with hurricanes. They could become a little more intense as a result of climate change.

 

(24:04):Climate change is a lot of different things. Its average changes over time. But also, potentially, some more intensity in some of the things that do happen, just because there's more heat in the atmosphere and more energy in the atmosphere. It's that energy that causes a lot of the weather events that we see on a daily basis. All those things are still going to happen, with or without climate change. The important thing to realize is that, for me, if today's hurricanes, warmer temperatures, more intense rainstorms, more tornadoes, etc., are caused by climate change, there's nothing our stopping emissions today will do about that actually. All of those effects today are baked into the system.

 

(24:51):The problematic proposition to climate change is anything we do to stop emissions today benefits people 50 to 100 years from now. It doesn't benefit us at all. That's always been the fundamental problem of climate change, is that we're already experiencing it, but the reason we're experiencing it today is because people 50 years ago didn't deal with the problem. We still have this disconnect, which makes it a really difficult problem to deal with. Which is that we can stop all of our emissions now if we want, and cause ourselves the economic harm of doing that, but we don't actually get a gain out of that. The people who get the gain out of that are people 50 to 100 years from now. There's this eternal uncertainty we have that we can't be certain they'd be happy if we actually stopped our emissions because that would create some economic changes that might not be favorable for the future either.

 

Phil Young (25:48):Yeah.

 

Brent Sohngen (25:50):Climate change, that's why it's such an interesting thing to look at is it creates these interesting philosophical questions of the present versus the future. As well as real-world scientific questions. It's a fun area to do research in. It certainly is becoming more intense politically, that we know.

 

Phil Young (26:09):Yeah. I think either way, the goggles you look at it from, you look at it from obviously the science part of it, but just the economics of it. I think that's my opinion, I don't know, I think people don't have the economics goggles on when they talk about this topic. The human impact of, if we make all these changes to the extreme, how does our lifestyle change? How does our way of life change?

 

Brent Sohngen (26:36):Right?

 

Phil Young (26:37):How do we live? How do we get logistically from place to place? I feel like you have to marry both of those together. I feel like maybe that's not done very well, or communicated very well. Would you agree with that?

 

Brent Sohngen (26:52):I would totally agree with that. Yeah.

 

Phil Young (26:53):Yeah.

 

Brent Sohngen (26:54):I think that we don't spend nearly enough time thinking about the economic add-on implications of some of the policies that are proposed for climate mitigation.

 

(27:04):One of the things I love about living in Ohio is that it's a microcosm of all kinds of things in the world. Right now, we see this in spades here in Ohio, that we're 3% renewable energy. Well, people want to get it up to really, really high levels. We're already seeing what the implications of that are for the farming community. Not just the farming community, but just the rural communities in Ohio. I know a lot of people want it, but a lot of people don't. I'm agnostic about wanting it or not, on the rural landscape. But what I can see out there is that there's a huge debate about it. That's a really important debate and it's not easy.

 

(27:40):At most, the current levels of solar facilities that are predicted in Ohio, which are actually on the books for consideration in Ohio, only get us to 10%. That takes up 50,000-60,000 new acres of land. I don't really worry about that so much from a loss of farmland. But I just think about that 50,000-60,000 acres gets us to 10%. We're still 90% away. We still have a long way to go to get to 100%.

 

(28:10):This is not an easy thing. We can see in Ohio just how difficult it is because not everybody agrees on it. It creates a conundrum for feeding, for how we're going to use the landscape, etc. Different viewscapes for people. All kinds of things change. Yeah. This is a side that I think needs to continue to be part of the conversation, whenever we talk about what we're going to do about climate change.

 

Phil Young (28:36):Yeah. Well, good. Hey, any other thoughts on the climate, or anything we didn't talk about with carbon? Anything you want to share before we wrap up here?

 

Brent Sohngen (28:45):Boy, I don't think so. I would just encourage people, if you have a farm, as you think about carbon on your farm, go out and look up those resources. I also actually would encourage people not to make immediate decisions. I think prices are going to rise in the future for carbon. We're at pretty low levels right now. I would encourage people to use this time period as an information-gathering period. Keep gathering that information, and getting yourself prepared to potentially make a move on it in the future. Because I think in the future, there's going to be some exciting things happening with respect to prices on that carbon.

 

Phil Young (29:22):Yeah. Well, good. Do you have a website or any resources that you've put out, that maybe could follow on Twitter? Or I guess, X now. Or social media, or anything like that?

 

Brent Sohngen (29:33):Yeah. I'm pretty bad at social media.

 

Phil Young (29:35):Are you?

 

Brent Sohngen (29:37):We do have a website. We do have a blog in the department. I'm one of the few people who put blog stuff on there. It's Water Cooler Economics. I do put stuff on price projections for carbon, keep up on that, on that site as well. I do a little bit on solar energy because that's such a big issue here in Ohio. That's a site potentially, Water Cooler Economics, pretty straightforward and easy to find, I think by Googling it. You might see some other things under wter cooler, but I think if you throw in economics on there, you'll find it.

 

Phil Young (30:05):Gotcha. Well, good. Hey, thanks for joining us today, Brent. Thanks again, to our listeners, for tuning into another episode of AgCredit Said It. Be sure to subscribe to the show in your favorite podcast app so you never miss an episode. If there's a topic you'd like us to cover, email us at podcast@agcredit.net and let us know. All right, we'll see you next time, guys. Thanks.

 

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