4.23.2021 – Carbon Sequestration Webinar and a Pension Update

It was my great pleasure and privilege to participate in another Council of State Governments Eastern Regional Conference (CSG ERC) webinar on Friday and Saturday, this one titled Carbon Sequestration from the Ground Up: Opportunities in Northeastern Farms and Forests. This is a topic the Vermont House Agriculture and Forestry Committee has been working on for several years that excites me because it reveals the roles that agriculture and forestry can play in climate change mitigation that, at the same time, may benefit our farmers and forest owners.

The panel that I moderated on Friday was the Roundtable on State Healthy Soils Legislation/ Programs. We heard presentations from speakers from Vermont, Maryland, and New York. Given that Earth Day was the day before the webinar and having watched a PBS special program on Greta Thunberg’s work the night before, it was very interesting to hear what other states are doing to address climate change mitigation with natural solutions including agricultural carbon sequestration.

Dr. Sara Via is a Professor and Climate Extension Specialist at the University of Maryland. She has also worked with the Maryland Department of Agriculture on soil carbon sequestration. I met her in 2019 at a gathering of many of the folks involved with this webinar in Hudson, New York, and was impressed with her work. She has developed numbers for amounts of carbon that can be sequestered per acre for each soil health practice used. Her report, “Increasing Soil Health and Sequestering Carbon in Agricultural Soils: A Natural Climate Solution,” will be published in the near future by the Izaak Walton League of America and the National Wildlife Federation.

Our own Ryan Patch, Deputy Director of the Water Quality Division at the Vermont Agency of Agriculture, Food, and Markets (AAFM) joined us to present the background and work of the Vermont Payment for Ecosystem Services (PES) working group. Several years ago, Ryan helped develop the Environmental Stewardship Program at AAFM, which is a pilot project meant to reward farmers who employ soil health principles that increase organic matter in the soil. Ryan covered the history, which started with the water quality issue around Lake Champlain, the cleanup plan, and the expectation that agriculture will take responsibility for 68% of that cleanup even though it is only responsible for 41% of the problem. This is because it is much cheaper to remediate ag lands than it is developed land.

Happily, the soil health practices employed to improve water quality – cover cropping, low-till – no-till – also increase the organic matter in the soil, which sequesters carbon. The increased use of these practices by our farmers has allowed the agricultural sector to be credited with 96% of the phosphorus reduction in Lake Champlain. The on-going question that the PES working group will explore is how we can reward farmers for the carbon sequestration services they render.

Assemblywoman Didi Barrett discussed a $400,000 carbon farming pilot project in her New York Hudson Valley District that includes a diverse array of farms including those that grow sweet corn, stone fruit and berries, and organic vegetables. Organic dairy farmers and those that employ intensive grazing methods are also part of the project.

Briana Alfaro, a soil carbon field researcher working for NOFA-NY and with Soul Fire Farm represented the BIPOC (Black, Indigenous, and People of Color) communities. Her recommendations struck some familiar themes: the need for educational support and technical assistance as well as, financial help to support transition costs to carbon sequestering methods. She said that we should create a culture of soil care shared by farmers, the public, and policy makers.

Some of the questions that need to be answered relate to how to measure the carbon sequestered, how to pay for these services, and if they should be considered gains or offered for sale, in which case they potentially allow someone to buy the credits and continue to pollute.
Other panels included an Overview of the Sequestration Opportunity; a Roundtable of Forest Carbon Opportunities; a Panel on Diversity, Equity, and Inclusion in Agriculture; an Overview of Public and Private Carbon Offset Market Opportunities, Methodologies, and Constraints; and State Action and Potential Federal Collaboration.

For anyone interested in viewing the webinar, it will be posted on the CSG ERC website www.csg-erc.org.

On Thursday, the House debated H.449, a bill that would address the pension conundrum that I wrote about in my report on April 2, 2021. If you missed it, it can be found on my website www.carolynpartridge.com. After researching, studying, and writing that report, several things became clear. One conclusion is that there needs to be structural changes to the pension systems, in particular in governance. Those making the choices regarding what investments are made need to have the expertise and experience necessary to do so and currently there are no such requirements for people serving on the Vermont Pension Investment Commission. This is a strong need – in only three of the last thirteen years the pension investments have reached the expected rate of return.

What H.449 does is create the Pension, Benefit, Design, and Funding Task Force, which will be made up of three members of the Vermont State Teachers’ Retirement System (VSTRS) appointed by the Union of Vermont Educators, three members of the Vermont State Employees’ Retirement System (VSERS) chosen by the Vermont State Employees’ Association and the Vermont State Troopers’ Association, the Director of the Retirement Division in the State Treasurer’s Office, the Commissioner of Human Resources, the Commissioner of Financial Regulation, three House members appointed by the Speaker (not all from the same political party), and three Senate members appointed by the Committee on Committees (not all from the same political party).

The Task Force will begin its work as soon as June, meeting during the summer and making its report no later than September 1, 2021. Their job will not be easy, but the hope is that they will be able to “thread the needle” and find a solution that satisfies everyone. For those who think that this is kicking the can down the road, we’d love to hear their suggestions. There have been many critics but few with remedies that are realistic.

The goal is to assure that these pensions systems are sustainable so that our dedicated teachers and state employees have the retirement pay that they expect. The State of Vermont has been making the required investments in recent years. The problem, as laid out in my April 2 article, has been underperforming investments, an overoptimistic anticipated rate of return, and other factors such as pensioners living longer than actuarially expected.

H.449 also changes the membership of the Vermont Pension Investment Committee to include people with more independence and investment expertise. To reflect the new independence, the committee will be renamed the Vermont Pension Investment Commission (also VPIC). The nine voting members of VPIC will include the State Treasurer, the Commissioner of Financial Regulations, three employee members (one each from VSTRS, VSERS, and the Vermont Municipal Employees Retirement System), one employer member appointed by the Vermont School Boards Association, one employer member appointed by the Vermont League of Cities and Towns, and two new independent financial experts appointed by the governor. There will also be a Commission chair elected by the nine voting members who will only vote in the case of a tie.
The goal in restructuring the composition of the new VPIC is to have a balance of employee voices as well as, independent individuals with financial expertise to make better investments and take the politics out of the equation.

As an additional sign of our commitment to solving the problem, the House has dedicated $150 million to the effort but it is a small number when you consider that the current unfunded liability for all of the pension systems amounts to $5.6 billion. It is hoped that this restructuring will produce better investments that will create long-term sustainability in our pension systems.