7.3.6 Financial Incentives for Agricultural Carbon Sequestration

LPDD Recommendation: “State, local, and federal governments should consider requiring farm owners to comply with basic climate-friendly practices, such as installing buffer strips next to streams, in order to receive tax benefits for agricultural activities or ease­ments.”

LPDD Recommendation: “State and federal governments should use tax policy to discourage agricultural practices that increase GHG emissions and to encourage practices that decrease emissions and sequester carbon.”

LPDD Recommendation: “Congress should consider adopting a fertilizer fee that could both encourage more judicious use of fertilizer and help fund training on how to ensure no yield losses with less fertilizer and other climate-friendly agricultural practices.”

LPDD Recommendation: “State and local governments should condition tax reductions for agriculture on the adoption of more climate-friendly practices, perhaps targeting more stringent requirements on larger farms or those with a larger than average (perhaps analyzed by size range) carbon impact.”

Enhanced Tax Deduction for Conservation Easements

In 2015, Congress permanently extended an enhanced tax deduction for landowners donating a conservation easement to a land trust or government agency. The enhanced deduction allows famers and ranchers to deduct up to 100% of their income.

Income Tax Incentives for Land Conservation Database

The Land Trust Alliance maintains a database of income tax incentives for land conservation. Their webpage discusses application of the federal conservation tax deduction in detail. Their April 2019 update to this list is captured here.