How grassland protection spurs carbon credits

Dallas May’s grandparents lost their land in the Depression, but their love of farming and ranching prevailed. The May family stayed put, leasing rangeland and crop-sharing farmland around Lamar, Colorado, for the next two generations.

The historic pain of land loss fueled the family’s passion to one day own again the lands they stewarded. The chance was nearly 80 years in the making, and when it came, it was a big opportunity.

With his siblings and parents, Dallas May and his wife, Brenda, had been leasing 16,000 acres of native grassland. There, the family — along with the Mays’ children — run a herd of 800 Limousin cows all tracing back to one heifer calf that May’s grandfather gave him as a birthday gift when he turned 13.

“A family-owned oil company owned the land, and in 2012 they decided to sell it,” May says. “There’s a lot of farmland in our area, and if we didn’t buy it, the land was at risk of being plowed up and converted to cropland.”

The May family did indeed buy the large holding of native grass, and immediately faced the economic need to make land payments while also finding ways to protect the land long term from the risk of development or conversion to cropland.

They addressed both issues by tying a conservation easement to the sale of carbon credits. The twin-pronged sheltering strategy came from May’s research of easements. He discovered multiple organizations offering valuable insights into ways working grasslands, their wildlife, and soil carbon can be protected. His list included the Conservation Fund, the Nature Conservancy, Ducks Unlimited, and Audubon.

The conservation easement the Mays finally chose is issued by the Colorado Cattlemen’s Agricultural Land Trust. “The easement is for perpetuity and stipulates that we will not plow the land up, and that we will preserve the property’s creeks and wetlands,” May says. An “encumbrance” on the deed to the land ensures the property cannot be sold off in parcels for development, though it can be sold in its entirety as a working ranch.

“To get the easement, we didn’t have to change anything that we were already doing,” he says.

The Mays’ managed grazing practices and other conservation work, such as tree planting and development of diverse water sites, made them a good fit for the easement. They had already been market- ing grass-fed beef through the Audubon Society’s Conservation Ranching Program, and their ongoing conservation work earned them the 2021 Colorado Leopold Conservation Award.

Income from the easement came from the state of Colorado in the form of a cash payment as well as tax credits. “The income wasn’t enough to sustain our livelihood, but it was enough to keep us viable,” says May. If the Mays are unable to use all the tax credits, they can be sold to individuals or organizations with tax liabilities.

Tying the Easement to Carbon Credits

While researching easements, May contacted Billy Gascoigne, director of Agriculture and Strategic Partnerships for Ducks Unlimited. Gascoigne, an expert in environmental market opportunities, suggested tying the Mays’ conservation easement to a carbon credit project through Ducks Unlimited (DU), which had pioneered the concept years prior.

In recent years, DU has been a key player in advancing the development of a carbon credit protocol called the Avoided Conversion of Grassland Protocol. Further developed and now adopt- ed by the Climate Action Reserve, an independent carbon credit registry, the protocol offers a standard for measuring the amount of stored soil carbon that is potentially emitted into the atmosphere when grassland is converted to cropland.

Ducks Unlimited’s interest in soil carbon and the carbon marketplace got its start nearly a decade ago when grassland conversions to cropland were increasing at elevated rates. “With a spike in commodity prices and new technologies coming online, we saw an increasing rate of grassland conver- sions — most notably in the Northern Great Plains,” says Gascoigne. “As an alternative, we wanted to find additional ways to in- centivize grassland conservation to preserve wildlife habitat.”

With an eye to tying economic incentives to soil carbon stored beneath the grassland, DU began measuring the carbon and the amount potentially lost when grassland is converted to cropland. “We found that at least 20% to 40% of the stored soil carbon is lost when grassland is converted,” he says. “That carbon is emitted as a greenhouse gas entering the atmosphere.”

The findings helped shape the Grassland Protocol used in measuring and certifying the amount of soil carbon stored beneath grasslands. To help reward landowners for preserving the soil carbon, DU entered the carbon marketplace as a project developer for landowners looking to sell carbon credits from grasslands protected by long-term agreements such as conservation easements.

After obtaining their easement, the Mays engaged DU as a carbon credit project developer. The partnership required a long-term agreement.

“It’s a 150-year contract,” May says. “The first 50 years is the crediting period, when we continue to receive payments for the continuing storage of carbon in the soil. The next hundred years is a period of permanence.”

The long length of the contract ensures the carbon registry and the buyers of credits that the carbon stored beneath a grassland will not be lost for the foreseeable future.

In his role as project developer for the Mays, Gascoigne annually evaluates carbon storage on the property and ensures the resulting carbon credits are verified by a third party. He ultimately works at selling the credits on the family’s behalf.

Another Stream of Income

The Mays have received annual payments for carbon credits for five years. “The sale of the carbon credits is not extremely lucrative, but it does represent another stream of income for our family,” May says. “It’s about the equivalent of selling 50 calves per year.”

One carbon credit — equal to one metric ton of carbon dioxide — presently sells for about $15 a ton, says Gascoigne. But many variables affect the price, including geography. “I can sell credits from a project in Colorado easier than I can sell credits from a project in North Dakota,” he says.

Buyers run the gamut from cities looking to reach net-zero emissions to intermediary brokers.

The California-based nonprofit Cool Effect is a broker, or retailer, that purchases through DU carbon credits from the Mays’ ranch. “We want to shine the light on high-quality carbon projects,” says Jodi Manning, director of marketing. “We want to support farmers and ranchers doing the hard work of protecting land.”

The value of “avoided” credits, she says, tends to be less than the value of “removal” credits. Avoided credits are issued when land is held in its natural state, which avoids the release of carbon. Removal credits, on the other hand, are those resulting from regenerative practices such as planting cover crops, which removes carbon from the atmosphere and sequesters it in the soil.

“Removal credits tend to command a higher price because they’re in short supply,” she says. “But overall, the price of carbon credits has doubled in the last two years because more corporations are stepping up to take up climate action. Whether the credits are avoided or removal, businesses are looking for high-quality carbon credits such as those from May Ranch.”

In May’s book, the agreements his family has entered into relating to easements and sales of carbon credits represent partnerships that strengthen the future of the ranch.

“We have found people who have the same ethics we have,” he says. “We’re able to partner with them, and they go out and capture some value for us. They help us remain a working family cattle ranch.”

Learn More

For more information, email Dallas May at mayvalleyfarms@outlook.com.