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Economist breaks down carbon market progress

An ag economist says recent increases to carbon prices are reflecting rising interest from corporations and consumers.

Matt Gammans with Michigan State University has been following market trends on the New York Stock Exchange.

“Just in the past month we’ve seen a 30 percent increase in these prices and these are also way up from last summer—about double,” he says.

Gammans says higher prices are also trickling down to farmers, pointing to Indigo doubling carbon financing to $40 a ton over last year.  On highly erodible soil he estimates, “These types of prices would be equating to a payment roughly in the ballpark of $9 an acre for going from no cover cropping to cover cropping.

Gammans says while offers are better than in 2021, they’re not big, and many times farmers are required to be enrolled in digital platforms to track their data which is an additional cost.

Gammans made his comments during a recent MSU Extension Field Crops Virtual Breakfast.