In a greenhouse just north of Davis, California, two rows of rice plants sit side by side in green plastic pots. If you saw only the plants on the right, you wouldn't think anything was amiss — they're green and healthy looking. But compared with their neighbors, they look stunted. The plants on the left are about a third taller, their fronds fuller and more plentiful. It's like seeing Charlie Chaplin and Wilt Chamberlain side by side.
The rice plants may look like fodder for a science-fair project, but according to Eric Rey, the president and CEO of Davis-based Arcadia Biosciences, the supersize seedlings have the potential to transform agriculture — and the environment. The secret is that they've been implanted with a gene that allows them to use nitrogen more efficiently. When they're grown with the same amount of nitrogen fertilizer as their traditionally bred counterparts, they do noticeably better. Even with less fertilizer than normal, they still thrive. "With these nitrogen-efficient plants, there's a more rapid increase in yield as nitrogen gets added," explains Rey, a hale, bearded 51-year-old. "So you get the same results with two-thirds less fertilizer."
Crops that flourish with less fertilizer could be a boon for the world's farmers, who spend $60 billion annually for 150 million tons of fertilizer to nourish their fields. Buying less fertilizer would obviously reduce costs. But it would also help the earth. The nitrogen that plants do not absorb flows into lakes and rivers, causing algae blooms that suck up oxygen and kill fish and shellfish. And nitrogen sprinkled on plants reacts with microbes in the soil to form nitrous oxide, a greenhouse gas 300 times more potent than carbon dioxide. "If we could reduce nitrogen-related emissions in agriculture by 50% in the top six crops," Rey says, "the effect on greenhouse-gas levels would be the same as if you took all the cars in the United States, the United Kingdom, and Germany off the road forever."
Rey has three larger-than-life goals — to give the agribusiness sector a boost, halt global warming, and make oodles of money — and he thinks his biotech creation will allow him to accomplish them all at one go. It's an audacious claim, but not necessarily a far-fetched one. "There's no doubt farmers will buy this," says Luca Comai, a plant biologist at the University of California, Davis. "The biotech crops that have had success on the market are the ones that reduce the cost for the farmer. The numbers will make it an obvious decision for them."
If farmers do end up buying Arcadia's products, it won't happen for at least another few years. While small-scale test plantings have been successful, the company has yet to engineer the nitrogen-efficient gene into seed for sale. The finished product will also have to pass muster with regulators in various countries. Arcadia is conducting field trials in China to demonstrate its seeds' potential. "The local government is really involved — they know this could save the farmers a lot of money, but they're also paying attention to the environmental issues," says Zhongjin Lu, an Arcadia staff scientist who is overseeing the Chinese trials. Early studies indicate rice farmers in China could save at least $80 a hectare on fertilizer by switching to Arcadia seed.
Arcadia's 80-person team plans to develop and commercialize its own rice varieties, but the company has also licensed its technology to DuPont for use in corn and to Monsanto for canola. The ace up Rey's sleeve, though, isn't corporate partnerships — it's a plan to cash in big-time on nascent global carbon markets. With one metric ton of carbon offsets now trading for about $30 on the European Climate Exchange, he thinks a 50% reduction in nitrogen-fertilizer use could generate $30 billion to $40 billion per year in credits for farmers. "You can earn carbon credits when you reduce the emissions of your coal-fired power plant, and agricultural producers should be able to earn credits for reducing their emissions as well."
"Agricultural producers should be able to earn [carbon] credits for reducing their emissions," Rey says.
"Should be able to" is different from "can," however. No market currently awards credits for cutting agricultural emissions like nitrous oxide, and some analysts question the wisdom of this kind of trading system. "If there's an economic incentive for farmers to buy these crops anyway, you could argue that you don't really need a new carbon market to push things along," says Mark Trexler, managing director of global consulting services at the green advisory firm EcoSecurities.
Skittishness about genetically modified crops, especially in Europe and Asia, could deep-six Arcadia's plan. Doug Gurian-Sherman, a senior scientist with the Union of Concerned Scientists' Food and Environment Program, repeats a common worry about GM crops — that a rogue super-rice plant could run rampant and throw nearby ecosystems off balance.
But Rey remains convinced that the eventual payoffs, both economic and environmental, will make the struggle worthwhile. He claims nitrogen-efficient crops will eventually reduce global greenhouse-gas emissions by 15%. "If that's the reward, I'm sorry, but I don't buy the objections," he says. "You have to balance the possible risks against the very clear benefits. Where can you get the most emissions reductions for the least money spent? No question, it's in agriculture." What do those risks matter, he figures, when you have a chance to do more for the planet than all hybrid cars, green roofs, and solar panels combined?
A version of this article appeared in the October 2008 issue of Fast Company magazine.