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Ecosystem service markets, including carbon markets, provide an interesting value proposition to producers, business interests, and the public at large. These markets have the potential to create new economic opportunities while also tackling the greatest challenge of our time - climate change. At my very first hearing as Chairman, I pledged to explore every opportunity to mitigate climate change and the significant risks to agricultural production – and that’s what we’re going to do here today. By rewarding farmers, ranchers, and foresters for implementing practices that sequester carbon, markets can create an opportunity for producers to capture a new income stream.

According to the latest data available, 2019 marked a record year for transactions across the global, voluntary carbon marketplace. More than 100 metric tons of carbon offsets were sold in 2019 at a total value of over $300 million dollars.  Renewable energy projects accounted for 42% of these transactions, with forestry and land use projects responsible for another 37% of transactions.

In addition to their economic potential, voluntary carbon markets could help to capture the significant mitigation potential available within the agriculture and forestry sectors. To capitalize on these opportunities, carbon markets must rest upon a transparent and reliable accounting and verification framework to ensure they are delivering true economic and climate benefits. However, given the significant variation that exists in today’s markets, serious questions remain over the quality of some of the carbon credits that are currently generated. Likewise, many questions remain about producer participation in markets – including how to fairly compensate producers, the ability of small farms to participate, and how to reward existing stewardship, among others.

These concerns merit attention from policymakers and consideration of whether federal policymaking can help to fill the gaps and provide the certainty and confidence needed to produce high-quality carbon credits. This Committee has previously engaged on the topic of ecosystem service markets.  The 2008 farm bill included a provision directing USDA to establish guidelines that could quantify and communicate the value of conservation practices.  It is my hope that we can build on that effort here today, as well as draw on the input the Committee has received through stakeholder briefings this year.

Additionally, I would be remiss if I did not acknowledge our farm bill conservation programs in this conversation.  These programs play a leading role in improving farm productivity, profitability, and environmental stewardship.  It is my hope that we can explore how carbon markets can work alongside these programs in the effort to further mitigate climate change.

In closing, I would like to thank all of our witnesses here today.  We look forward to your testimony. With that, I recognize Ranking Member Glenn Thompson for any opening remarks he may have.