Dennis Haubenschild's 900 dairy cows produce a lot of manure. But that manure, after going through a conversion process at his farm, also produces a lot of captured energy.
As part of a new greenhouse-gas trading system that rewards operations that reduce airborne emissions, Haubenschild is earning thousands of dollars a year from large companies and public institutions that can't cut pollution as much as they have promised. As the only Minnesota farmer doing this, he predicted other Midwestern farms will welcome the extra money stream and help blunt the effects of global warming.
"All businesses have to be sustainable,'' said Haubenschild, who runs the 54-year-old family farm with his two sons. "We have to lessen the footprint we are leaving on Mother Earth.''
Seven years ago, Haubenschild installed an anaerobic digester system, which converts methane-creating manure into electricity that is sold to a local utility. Methane is one of many greenhouse gases building up in the atmosphere, contributing to a 1-degree increase in the Earth's average temperature over the past century.
For five years, Haubenschild had a contract with a utility that covered the digester's operating costs. But when it expired and he found another outlet that paid less, he looked to the Chicago Climate Exchange, North America's only voluntary, legally binding greenhouse-gas reduction and trading system.
In just under three years, 130 private and public institutions such as Ford Motor Co., IBM, the state of New Mexico and the University of Minnesota have joined it, committing to reduce greenhouse-gas emissions that trap the sun's heat. Those that can't meet an established emissions-reduction goal must buy pollution credits from members that exceed the goal.
"It really provides a financial incentive for people to do it,'' said Richard Sandor, chairman and chief executive of the exchange.
Because Haubenschild Farms is too small to join the exchange, it needed another way to participate. Enter Environmental Credit Corp. of Pennsylvania, which is a member of the exchange and has begun signing up U.S. farms.
"We think we are on the cutting edge of an emerging market that is going to be very significant,'' said Ed Heslop, chief executive for Environmental Credit. "With that, we are talking about tens of millions of dollars of opportunity to be returned to farmers.''
Environmental Credit creates the so-called credits by measuring and verifying emissions reductions at Haubenschild's farm. Much like trading commodities, the group then handles credit transactions on the exchange.
Almost 100 tons of carbon credits are created there every week, funneling an extra $125 a week to Haubenschild.
Haubenschild isn't the only Minnesota participant. The University of Minnesota, as part of President Robert Bruininks' initiative to promote sustainability, joined the exchange a year ago.
Members with direct emissions have agreed to reduce emissions of greenhouse gases this year to 4 percent below the average of their 1998-2001 baseline. Gases covered by the agreement are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.
Jerome Malmquist, the university's energy director, said the school, by updating controls and making heating systems more efficient, is ahead of schedule.
"We have met our requirements, as far as reducing 4 percent below baseline, and we continue to make strides in the area of energy efficiency,'' he said. "We are using less energy per square foot than we were a while ago, and that is a very difficult thing to do.''