This article first appeared at SustainableBusiness.com.

The widespread application of compost significantly can reduce carbon emissions, and California is providing incentives for ranchers to do it. 

Ranchers can get tradable greenhouse gas emission reduction credits, bringing them another revenue stream for sustainable land management practices while improving the soil and its ability to hold water.

Ranchers can sell them on California's Greenhouse Gas Reduction Exchange (GHG Rx), where polluters buy credits to be used in projects that benefit the state. So, ranchers can benefit from the state's cap-and-trade program.

Research at the University of California, Berkeley shows that compost applied to 5 percent of the state's grazing land would store a year's worth of emissions from conventional farms and forestry operations there. If that's increased to 25 percent of grazing land, the soil would absorb 75 percent of California's total annual emissions. 

A similar program is launching on the national level under the USDA. "Carbon farming" ranchers can generate revenue simply by leaving grasslands undisturbed. The more carbon in their soil, the more carbon credits they generate, which corporations buy to offset their emissions. 

In 2011, Australia's Parliament passed legislation creating the world's first nationwide system for carbon credits from farming and forestry industries. There's also a program for small farmers in Kenya.