Citizens' Daily Lobby

The cap and trade system proposed in the Waxman-Markey bill that passed the House last year could actually lead to increased farm income, according to the Agricultural Marketing Resource Center. This is due to the fact that agricultural enterprises would not be “capped” under the bill, but would still be eligible to make additional income via offsets.    This is in contrast to regulation of CO2 by the EPA without passage of cap and trade legislation, which is predicted to place additional cost and regulatory burden on farmers.  Of the three methods of regulating greenhouse gas emissions (cap and trade, regulation, and carbon taxes), cap and trade is the friendliest to agriculture.   Under cap and trade with offsets, the return to farmers  (of commodities, at least)  might look something like the data presented in Table 2.  The Center acknowledges that without some control of greenhouse gas emissions, the effects of climate change on agriculture would leave agriculture “vulnerable to the vagaries of climate change not only in the US but in the world”.   Full story here.

It will be important for agriculture to carefully consider the offsets available and to choose those that don’t take too much cropland out of production (ie, for forestation).   I would be interested to see what the data might look like for returning land that is currently in commodity production to growing produce and animal protein for local markets.  Mainstream agricultural economics doesn’t do a very good job of looking at serious alternatives to our current agricultural system.