In the rolling foothills of the madison range in southwestern Montana, a cabin-style house sits beside a washboard dirt road. A few horses loiter in a corral outside, and spotted ranch dogs bark and jump at the fence. James Stuart, manager of Sun Ranch, lives here with his wife and three kids. Christian, the oldest at four years, just got his first pony.
Stuart, who comes from a long line of rugged Scots who settled this region, has auburn hair and eyes lined from squinting—or smiling—in bright sunlight. He loves this land. You can hear it in his voice as he rattles off the creeks and canyons of the 26,000 acres he’s surveying from the cab of his silver Dodge pickup. We’re parked on an overlook in the middle of the ranch as Stuart’s gloved hand traces the outlines of the landscape around us. “We have Wolf Creek to the north, we have Moose Creek coming down out of this big canyon....” His voice trails off as our line of vision ends at the hilly horizon.
Stuart is accustomed to the usual trials of a working ranch: blizzards, wolves, broken fences and the occasional errant cow. But it’s not all business as usual here. Last year Sun Ranch became the first ranch in the U.S. to cash in on a program that pays rangeland owners to help fight global warming. The ranch received a $30,000 check for the carbon dioxide its grasslands have been absorbing from the air. The more carbon dioxide in the ground, the less of it in the atmosphere, and that benefits everyone.
Paying landowners to store carbon is a strategy that is rapidly gaining in popularity, and rangelands are the newest frontier in an emerging marketplace that enables polluters to buy carbon credits from projects designed to reduce greenhouse gases in the atmosphere. Buyers use these credits as “offsets” for their activities that contribute to climate change, everything from manufacturing to air travel.
In the U.S., purchasing carbon credits was being done voluntarily, but by late September, 10 northeastern states agreed to implement the nation’s first “cap and trade” system, which would place an upper limit on the amount of carbon dioxide and other greenhouse gases that industries are permitted to release into the atmosphere. To keep their emissions below this limit, companies would trade carbon credits through an exchange similar to the stock market. A similar cap-and-trade scheme has proved successful at reducing sulfur dioxide emissions—which cause acid rain—in the U.S. since the mid-1990s. And prior to election day, both presidential candidates Barack Obama and John McCain had called for trading, too.
Plenty of trading has already been happening, however, at the five-year-old Chicago Climate Exchange. In the first nine months of 2008, more than 60 million credits—one for each ton of carbon—were traded on the exchange. Most trades are tied to projects such as planting trees, protecting tracts of rain forest, installing renewable energy sources and harvesting methane from landfills.
\Rangeland sequestration projects have generated only about 200,000 credits but are on the cusp of a major boom. The rangelands of the American West naturally absorb about 190 million tons of carbon dioxide a year. That’s about what 40 coal-fired power plants emit, but there’s still plenty of room for improvement. Through its Rangelands Soil Carbon Management Offsets Program, the exchange offers a financial incentive for ranchers to increase the amount of carbon dioxide that is absorbed by their lands. Sun Ranch was the first to qualify.
Grass absorbs carbon dioxide the same way trees do, but on a smaller scale. Through photosynthesis, each plant takes carbon from the atmosphere and uses it to build more plant matter. When grass dies or trees are cut down, that carbon is released back into the atmosphere. But grass plants also release carbon out of their root tips to fungi in the soil, says Stephen Porder, who teaches biogeochemistry at Brown University. “When those roots die or the fungi die, they’re eaten by some microbe or worm, and a portion of that carbon gets stabilized,” he explains. “It gets stuck onto a clay mineral or a particle and stays in the soil.”