With last year’s demise of cap-and-trade legislation that would have imposed limits on greenhouse gas (GHG) emissions and established a set of credits for sequestered carbon, the price of the credits went from a high of more than $7 per ton in 2008 to 5 cents per ton last November. As a result, programs that paid farmers for their carbon-reducing practices have closed down.

A carbon credit program run by the North Dakota Farmers Union aggregated some 5.5 million acres across 42 states, handing out $7.4 million to 4,000 program participants over the program’s five years. A similar program run by the Iowa Farm Bureau Federation contracted some 2 million acres with 3,900 farmers in 16 states. The programs would, in turn, sell the credits on the Chicago Climate Exchange (CCX) to companies that exceeded their emission limits and could use the credits to reduce their carbon footprint.

Established in 2003, the CCX was the only voluntary GHG reduction and trading system for emissions sources and offset projects in North America and Brazil. CCX officials said the exchange had an aggregate baseline of 680 million metric tons of carbon dioxide equivalent and allowed companies that joined the exchange to reduce their aggregate emissions some 6 percent by 2010.

From early in the last decade, the price of carbon began to build but then fell due to legislative uncertainty and the 2010 elections. The effective final carbon credit price per metric ton of carbon dioxide on the CCX went from a high of $7.50 in May 2008 to a low in November of 2010 of between 5 cents and 10 cents, less than the cost of registering the credits. Trading on the CCX virtually had stopped in February of 2010 and remained at zero for the next nine months. In November of 2010, the CCX said it was ceasing the trade of carbon credits at year’s end.