College Station, Texas
February 16, 2004
Two research economists say
electrical power plants and other manufacturing agencies could
someday seek the aid of farmers, offering contracts to help
industrial firms reduce carbon emissions. For farmers, such
agreements could create an additional source of income and make
carbon a traded commodity.
Dr. Bruce McCarl, a Texas Agricultural Experiment Station
economist, and Dr. Tanveer Butt, a professor of economics at
Texas A&M University, are
looking at the possibilities.
The researchers said global warming is partially due to an
increase in greenhouse gases, and is released primarily by power
plants, automobiles, manufacturing companies and tropical
deforestation.
Both McCarl and Butt said carbon dioxide is the most dominant
greenhouse gas. Since crops and trees process carbon dioxide and
return it back into the soil in the form of carbon, land used by
agriculture could play an important role in carbon
sequestration.
Land management practices, such as tree production, the planting
of grasses on rangeland, and conservation tillage, are a few
methods that would help reduce levels of carbon dioxide.
"Plants can take carbon from the air and put it back into the
soil, and this could be a cheaper alternative than causing
cutbacks or technology change in the energy or manufacturing
industries," Butt explained.
Agriculture could play a key role in carbon reduction when
industry, such as power plants, might face greenhouse gas
emission limits and look for ways to offset levels that are
above the limits.
The major sources of greenhouse gas emissions in the United
States are power plants (36 percent), transportation (28
percent) and the manufacturing industry (22 percent), according
to the U.S. Environmental Protection Agency.
There are two fundamental ways that farmers might be paid for
sequestration. A subsidy program might pay farmers to retire
land or alter practices. The second alternative would allow
private buyers to contract with private sellers.
But there is one big hurdle, according to the research
economists. The current carbon market offers very limited
prospects for farmers to make money. Existing prices suggest
farmers could make 49 cents per acre for practicing conservation
tillage and 74 cents per acre for planting grasses.
The prospects can only improve if the U.S. government enforces a
greenhouse gas emission reduction plan, which would strengthen
market prices or introduce funded programs that share part of
the carbon sequestration cost, according to the researchers.
And such drastic measures enforcing carbon reduction among power
plants, the transportation sector or other industrial firms
could have a damaging impact on the national and world
economies.
"If the U.S. goes ‘whole hog' in restricting carbon emissions,
they could put a tax on power-generating companies to reduce
their carbon emissions," Butt said. "This will, in turn,
increase the cost of energy generation that will be passed on
down to the consumer and industrial and manufacturing sectors.
Agriculture may accomplish this objective at lower economy-wide
impacts."
Internationally, emissions limits are beginning to be imposed.
Canada, for example, is planning for implementation of
greenhouse gas limits that would come with its ratification of
the Kyoto Accord. As more and more countries around the world
ratify the Protocol, the U.S. will under increasing pressure to
cut its emissions.
So far, a few national farming organizations, including the
American Farm Bureau, have shown interest in examining the
potential of carbon reduction contracts.
"There are farmers who are willing to do it, but they are still
wanting to learn more about the economic issues. Industry
emitters are also knowledgeable about the prospect but need
information on its potential and cost," Butt said.
The Consortium for Agricultural Soil Mitigation of Greenhouse
Gases has been formed to address such issues. The consortium
consists of nine universities, including Texas A&M, and the
Battelle-Pacific Northwest National Laboratory. All are working
together through the U.S. Department of Agriculture.
The consortium is currently developing tools and information to
implement carbon sequestration programs. The group met with
industry and government representatives to discuss the
possibilities. The meeting was held at the George Bush
Presidential Library Conference Center in College Station
earlier this year.
"The conference was a success," Butt said. "Industry and
government representatives got a first-hand look at how they
could use this as a technology for reducing emissions."
Editor's Note: The Consortium for Agricultural Soil Mitigation
of Greenhouse Gases is a consortium of nine universities and one
national laboratory collaborating with government agencies
funded by a Congressional appropriation. The consortium members
are:
Texas A&M University System
Colorado State University
Iowa State University
Kansas State University
Michigan State University
Montana State University
Purdue University
The Ohio State University
University of Nebraska
Battelle-Pacific Northwest National Laboratory
USDA-Agricultural Research Service
USDA-Natural Resource Conservation Service
USDA-Economic Research Service/Resource and Environmental Policy
Writer: Blair Fannin, (979)
845-2259, b-fannin@tamu.edu
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