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April 1998

Clean-Energy Legislation Is an Opportunity for Farmers and the Economy

Center for American Progress
July 8, 2009
By Jake Caldwell

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Agriculture is acutely vulnerable to global warming’s devastating effects. Congressional action on climate change will help farmers adapt and meet these challenges, and it will support American farmers’ leadership efforts in confronting the challenges ahead. The cost of inaction on U.S. agriculture and rural America is simply not acceptable.

The U.S. Senate Committee on Environment and Public Works is holding key hearings today and over the next few weeks on comprehensive climate change and clean-energy legislation. Now it's the time for Congress to safeguard U.S. farmers’ livelihoods—and the nation’s food and fiber supply—from the increased water shortages, widespread drought and floods, and lower crop yields associated with global warming.

U.S. Secretary of Agriculture Tom Vilsack called the recent U.S. House of Representatives action on climate change “one of the most important votes in the last 100 years.” “It is a vote about the future,” he noted. “It is a vote about redefining the economy of this country. It is a vote about creating real jobs here in America that can support families and help create the middle class and support the middle class.”

Comprehensive energy and climate change legislation will bring new life to the American economy and allow farmers to earn more income, cut costs, diversify sources of revenue, and continue to make a lasting contribution to our national security.

The unique relationship between agriculture and climate change No sector of the U.S. economy is as important, or as vulnerable to the effects of global warming, as agriculture. Yet agriculture can be both a source of global warming mitigation and green house gas emissions.

U.S. agricultural and forest lands sequester 246 million metric tons of carbon annually, absorbing 13 percent of U.S. greenhouse gas emissions. And the Congressional Budget Office has suggested that with the appropriate incentives these lands could ultimately absorb 50 percent of U.S. greenhouse gas emissions.

A recent analysis co-authored by the Worldwatch Institute notes that scaled up innovations in food production and land use available today could reduce greenhouse gas emissions globally equivalent to 25 percent of fossil fuel emissions.

But U.S. agriculture also produces 413 million metric tons of carbon dioxide equivalent emissions per year, while generating two-thirds of all nitrous oxide emissions and significant methane emissions. Nitrous oxide and methane are both more potent greenhouse gases than carbon dioxide. Overall, the agricultural sector is responsible for 6 percent of total U.S. greenhouse gas emissions.

Delay is not an option. Failure to pass clean-energy legislation invites unnecessary risk by placing the fate of U.S. agriculture and climate change into an administrative process of regulating greenhouse gases through the EPA under the Clean Air Act. More importantly, inaction on global warming represents ongoing adherence to a status quo of volatile energy prices, extreme weather events, and increasing dependence on disaster assistance.

Global warming legislation will reward farmers for their central role in leading a national energy policy that respects regional differences and allows farmers to promote clean energy, increase efficiency and lower energy costs, and earn income through carbon offsets and the creation of a market for carbon sequestration.

Harvesting clean energy A U.S. market-based global warming pollution reduction plan will drive demand for farm-produced renewable energy and increased efficiency on the farm. Renewable electricity standards in legislation require retail electricity suppliers to generate a percentage of their electricity from renewable resources.

Farmers would become both the direct providers of renewable energy and the beneficiaries of our economy’s low-carbon transformation as an increasing number of wind, sustainable biomass, methane capture, and other energy facilities—and the jobs that accompany them—are sited in rural America.

The Department of Energy estimates that if 5 percent of the nation’s energy comes from wind power by 2020, rural America could see $60 billion in capital investment. Farmers and rural landowners would derive $1.2 billion in new income, and see 80,000 new jobs created over the next two decades.

Clean-energy legislation in the transportation and fuel sector can work together with the current federal policy to encourage farm-based renewable fuels—the renewable fuel standard—and promote advanced biofuels grown and produced in rural America. The combination of a performance-based renewable fuel standard and climate legislation will allow farmers and rural America to create more jobs, promote energy independence, and reduce global warming pollution.

The next generation of advanced biofuels have a role to play in diversifying our energy needs. These fuels will come from lower energy and greenhouse gas emission feedstocks such as agricultural waste, wood chips, and native plants. We must move forward on biofuels in a more innovative and efficient manner. Clean-energy policy must begin to reward the performance characteristics of advanced biofuels, and not simply the sheer volume of production levels.

We will need to bring advanced biofuels to commercial scale as rapidly as possible in order to accurately assess their true cost and viability. The current renewable fuel standard calls for 100 million gallons of advanced biofuels in 2010, 1 billion gallons in 2013, and 21 billion gallons by 2022. These targets will simply not be met if the Obama administration and Congress do not redouble efforts to coordinate the research, development, and deployment of sustainable advanced biofuels production among USDA, DOE, EPA, the White House Council on Environmental Quality, and others.

Importantly, EPA recognizes in the ongoing renewable fuel standard rulemaking that the science and methodologies used in the “indirect land use” evaluation process are evolving and will require constant improvement and updating as more information on the greenhouse gas emissions of various fuels and feedstocks becomes available. EPA has indicated its commitment to incorporating the latest scientific data into its greenhouse gas intensity assessments while performing constant reviews and updates of its standards. More scientific research and study is needed to further our knowledge of how effective different agricultural methods are in reducing greenhouse gas emissions, such as improvements in soil management, crop yields, and indirect land use of all potential crop-based fuel feedstocks, including traditional corn-based ethanol. The existing biofuels industry has legitimate concerns regarding the need for more scientific data to constantly inform the renewable fuel standard, and federal regulators must take these into account.

Appropriate and verifiable standards can enable advanced biofuels to play a direct role in diversifying our energy sources and contributing to economic growth and development, particularly in rural communities in the United States and the rest of the world.

Agriculture carbon offsets and a market for carbon sequestration The agriculture and forestry sectors are good candidates to provide carbon offsets to reduce the greenhouse gas reduction costs for major emitters during the initial stages of a global warming pollution reduction cap-and-trade program.

Global warming legislation will allow farmers to create and sell carbon offsets by increasing incentives for carbon sequestration and reducing greenhouse emissions on the farm. Farmers will be compensated for their longstanding carbon sequestration and land stewardship efforts. Farmers can qualify for carbon offsets that will generate increased farm revenue by increasing carbon sequestration and reducing greenhouse gas emissions such as methane and nitrous oxide on the farm.

Carbon offsets must be measurable, additional, verifiable, and permanent if they are to be part of any rigorous emissions reduction program. In some cases, existing offsets have not met these criteria, and we must ensure that any offsets allowed under a U.S. cap-and-trade program truly reduce emissions. Efforts that fall short of full compliance threaten to undermine the integrity and achievement of pollution reductions.

A central advantage of rigorous carbon offsets—in addition to providing flexible, inexpensive emissions reductions—is that they can encourage emissions reductions in sectors such as agriculture and forestry, which will not be covered in the early stages of the global warming pollution reduction program.

The North Dakota Farmers Union estimates that 3,900 farmers today are receiving $9 million in revenue from agricultural carbon offsets—even in the absence of a formal cap on emissions. There is significant potential for additional offset income. According to Ohio State University’s Carbon Management and Sequestration Center, agricultural lands have the potential, under ideal circumstances, to capture one-third of the carbon emissions produced in the United States. Agriculture’s potential to sequester such vast amounts of U.S. carbon emissions dwarfs agriculture’s 6 percent contribution to greenhouse gas emissions, and farmers deserve to be rewarded for their mitigation efforts.

Farmers across the country are already engaged in numerous beneficial practices that enrich our soil and reduce greenhouse gas emissions, including erosion prevention, soil conservation, reduced tillage, planting perennial trees and shrubs, utilizing rotational grazing and methane capture with livestock, applying less fertilizer, and restoring watersheds.

EPA recently lowered its previous estimates of the potential carbon credits available to farmers from 700 million tons to 300 million tons as a result of a decrease in tillage as today’s farmers responded to higher fuel prices with no-till farming. As a result, many of the carbon reductions that EPA was anticipating in future years may have already occurred as farmers lead the nation in making progress in preserving our soil and combating global warming. Rewarding early actors for beneficial carbon reduction practices that can withstand rigorous scientific scrutiny is appropriate in this sense.

The Energy Information Administration has estimated the value of agricultural offsets to be close to $24 billion annually. That is real money put back into the pockets of farmers and pumped into the rural economy.

Conclusion

Global warming and clean-energy legislation is an opportunity for farmers to earn more diversified income, lessen our dependence on volatile fossil fuel prices, and create jobs in rural America. Farmers are part of the solution to global warming, and congressional action on clean energy and climate change will provide the tools to farmers in their efforts and reward good practices to get the job done.

NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving this information for research and educational purposes.