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Carbon Markets, or are They?

August 22, 2022 | Letters

“So, do carbon markets work, Carson?” This is the question I asked my colleague and friend Dr. Carson Reeling recently in our Consumer Corner Micro-Course, Consumer-Driven Changes in Ag Market Channels.

Having admired Carson’s work in environmental and natural resource markets for years, I was thrilled to lure (I mean, invite) him to collaborate on the Consumer Corner Micro-Course. I’m increasingly convinced, or maybe it is concern, that fulfilling consumer demand for things like ‘improved animal welfare’ are akin to ‘improved carbon emissions’. Admittedly, in one case (animal welfare) we want MORE and in the other (carbon) we want less, but the situation persists … we want stuff we cannot hold in our hands and that is hard to measure, but can technically (although sometimes at great expense) be validated or given some kind of stamp. That yields the next question, do we trust the people doing the stamping?

With all of the interest in carbon markets today by consumers, I really do want to know if they work (and apparently so do lots of other people).

Author: Nicole Olynk Widmar, Associate Head and Professor, Purdue University, Department of Agricultural Economics, and Carson Reeling, Associate Professor, Purdue University, Department of Agricultural Economics

Nicole: “So, do carbon markets work, Carson?”

Carson: “I use that term “market” very loosely, because if you are an economist who looks at these (carbon markets), they don’t really look like anything that resembles a market to you.”  Dr. Carson Reeling, April 6th, 2022 in the Consumer Corner Micro-Course Consumer-Driven Changes in Ag Market Channels

It’s a trick question … let’s start with whether they are actually markets. The answer? They’re not actually markets, although there are certainly an abundance of carbon offset programs.

So, perhaps they are voluntary carbon sequestration programs. Whether a market or a program, they’re certainly eliciting attention these days, and that attention yields a need for agriculture’s involvement in ensuring trust in the programs and that consumers and the general public know what they’re getting (and that we know what we’re giving!).

We’ll pick it up with the specifics of carbon sequestration and where agriculture may (or may not fit) in carbon program participation next week …

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