Conservation Investment and Carbon Payments in US Agriculture: Implications of the Inflation Reduction Act of 2022

Abstract

Conservation is essential for agricultural sustainability in order to preserve soil productivity and mitigate adverse impacts on ecosystems such as degraded water quality and wildlife habitats. It can be costly to adopt conservation practices that help sustain farm soil health in the long term but do not always generate a positive return for farmers in the short term (e.g., reduced tillage, cover crops). Furthermore, some conservation practices potentially improve off-farm environmental conditions but do not improve farm profitability (e.g., riparian buffers, wetland restoration). The United States has a long history of governmental investment in conservation to maintain the economic and environmental sustainability of agriculture. Recently, the pursuit of carbon neutrality has brought increased attention and funding to conservation in agriculture. This article briefly explores governmental conservation investment in agriculture and some key issues on its interactions with the fast-developing private carbon payment programs.