Dedicated to the balanced discussion of global warming
Wall Street Journal – October 9, 2007
I am not a fan of carbon trading programs or carbon credits as most readers know. However, I do like programs that promise to reduce the use of our valuable resources.
This idea sounds promising as it will decrease the amount of greenhouse gases released into the atmosphere (did you know that agriculture put out more than automobiles?) and it will conserve resources.
…to sell farmers a genetically engineered rice seed. He says the seed, still in development, will cut their need for nitrogen fertilizer, which is among their biggest costs — and a huge source of greenhouse gases. He then aims to sell the resulting carbon credits on a growing global exchange.
In a typical transaction, an industrial company that is having trouble reducing emissions can buy credits from another company that has figured out a cost-efficient way to cut its own carbon output beyond what is required. Many early carbon-credit projects focused on curbing emissions at industrial facilities, including reducing methane emissions at landfills. But entrepreneurs like Mr. Rey see huge potential in tapping into agriculture — the No. 4 producer of global-warming gas.
To date, Mr. Rey says Arcadia has invested "tens of millions of dollars" into the nitrogen technology — to develop genetically modified seeds or plants than can grow with half the amount of fertilizer normally required. The amount hasn’t exceeded $40 million, he says, but "the ongoing investment rate is pretty aggressive."
He began doing more research on sources of greenhouse-gas emissions. He learned that the biggest source of agriculture-related greenhouse gases is nitrogen fertilizer. That’s because only about half the fertilizer applied to fields is typically consumed by the plants. The rest seeps into the ground, becoming a primary contributor to water pollution, or is emitted into the air as nitrous oxide, a greenhouse gas nearly 300 times as potent as carbon dioxide.
For Mr. Rey, the threads of a solution began to come together with what he calls the "carbon wrinkle." Rather than charging farmers a premium for genetically modified seeds — the traditional business model — farmers would pay for the price of regular seed, plus about half of the carbon credits generated by their reduced fertilizer use.
You can read the rest of this article here.Tags: automobiles, carbon credit, carbon dioxide, carbon trading, China, emissions, Greenhouse gas, methane, plants, pollution, Wall Street Journal, water