Agriculture, energy, and global warming are inextricably linked, which is why America’s farmers must be a part of the solution to global warming. Today the U.S. House Committee on Agriculture conducts a hearing on the American Clean Energy and Security Act, H.R. 2454. A close review of the legislation reveals that it provides a significant opportunity for U.S. farmers to increase their income while safeguarding their livelihoods and the nation’s food and energy supplies.
U.S. Secretary of Agriculture Tom Vilsack called reductions of carbon dioxide a "new income source [that could] change the old ways of supporting farms." He has urged farmers to seize the economic opportunities from reducing greenhouse gas pollution and "not to be fearful of this future." H.R. 2454 recognizes and rewards the benefits farmers can provide to the United States and the world in ending our dependence on fossil fuels and confronting climate change.
H.R. 2454 offers an opportunity for farmers to diversify their sources of income and cut costs by increasing energy efficiency. With modest improvements, ACESA can designate a more explicit role for agriculture in the carbon offset market without jeopardizing the gains for farmers already included in the overall legislation. ACESA rewards good practices and provides the tools to ensure that American farmers can benefit from solutions to global warming.
Here are eight reasons why farmers should support this bill:
1. Farms and forests can reduce global warming pollution.
U.S. agricultural and forest lands sequester 246 million metric tons of carbon annually, absorbing 13 percent of U.S. greenhouse gas emissions. With the appropriate incentives these lands could ultimately absorb 50 percent of U.S. greenhouse gas emissions. H.R. 2454 promotes U.S. agricultural lands as a carbon sink by encouraging low tillage practices, tree and perennial planting, erosion prevention, rotational grazing, agricultural carbon offsets, and a market for carbon sequestration.
2. Farmers can grow dollars by selling “carbon offsets.”
H.R. 2454 establishes a carbon offsets market that would allow farmers to create and sell carbon offsets to polluting entities in lieu of reductions by polluters. This would reduce the cost of emissions reductions for polluters. Farmers would be paid for their longstanding carbon sequestration and land stewardship efforts. By increasing carbon sequestration and reducing emissions from greenhouse gases such as methane and nitrous oxide on the farm, farmers can qualify for carbon offsets that would generate increased farm revenue. The Energy Information Administration has estimated the value of agricultural offsets to be close to $24 billion annually.
U.S. agriculture produces 413 million metric tons of carbon dioxide equivalent per year, while generating two-thirds of all nitrous oxide emissions and significant methane emissions. These two gases are more potent greenhouse gases than carbon dioxide. Overall, the agricultural sector is responsible for 6 percent of total U.S. greenhouse gas emissions. U.S. agriculture must take the lead in reducing these on-farm greenhouse gas emissions. There are many opportunities for farmers to make reductions and reap profits.
The offsets program can be improved by involving the U.S. Department of Agriculture in the Environmental Protection Agency’s process to develop the offsets rules and market operation. USDA’s expertise and presence in nearly every state should assist in the development of measurement methodologies to enable ACESA’s Offsets Integrity Advisory Board to determine scientifically rigorous high-quality offsets.
3. Farmers can earn new income by leasing their land for wind turbines while continuing to farm.
The renewable electricity standard in H.R. 2454 requires utilities to generate 15 percent of their electricity from renewable resources by 2020 (see Title I, Sect. 101). Farmers can help utility companies meet this goal by installing wind turbines, solar panels, and other renewable energy technologies on their land and buildings. Leasing land for a single utility-scale wind turbine could provide a farmer with about $3,000 a year in income. 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 80,000 new jobs would be created over the next two decades.
4. Farms will produce the cleaner fuels of the future.
The current renewable fuels standard establishes ambitious targets and strives to produce advanced biofuels that deliver measurable lifecycle greenhouse gas reductions, minimize the use of food-based feed stocks, and adhere to certifiable environmental and land use safeguards. H.R. 2454 works with the RFS to promote advanced biofuels grown and produced in rural America.
The RFS has a production target of 21 billion gallons of advanced biofuels by 2022. It provides appropriate flexibility to allow producers to meet the RFS mandate with significant contributions from third generation biofuels without dictating a specific type of biofuel product or technology. The approximately 15 billion gallons of existing and future conventional ethanol production capacity would be exempt from greenhouse gas reduction targets.
5. A safety net to protect rural families from higher energy prices.
H.R. 2454 provides for a monthly cash energy refund for rural consumers experiencing a loss in purchasing power due to energy costs. (Title IV, Section 432).
6. Energy efficiency measures would reduce farmers’ electricity bills.
The energy efficiency standard in H.R. 2454 provides farmers with the opportunity to make significant energy efficiency upgrades. Farmers are eligible for federal tax credits for energy-efficient appliances to help them reduce energy use. Dairy farms, which use more energy than most farms due to the energy-intensive nature of milk production, could in particular benefit from the savings from using energy more efficiently. Installation of energy-efficient lighting, ventilation fans, and milking systems could save a farmer hundreds of dollars a year.
Energy expenditures represent 6 percent of total national farm production costs, costing farmers over $10 billion per year. Recent increases in oil prices and volatility will make energy costs even more of a burden for farmers.
The American Council for an Energy Efficient Economy estimates that the potential for energy and cost savings in agriculture is over 98 trillion British Thermal Units and $1 billion annually. The potential efficiency savings for agricultural producers is 5.8 percent compared to the 2002 consumption total of 1.7 quadrillion BTUs.
7. Scientific review would help identify future threats.
The evidence of harms from global warming are mounting at an alarming rate. To ensure that farmers and agriculture can identify and respond to climate changes, the bill establishes an interagency National Climate Change Adaptation Council that would assess the impacts of climate change on agriculture and other sectors. A fund is also established to provide money for state and local adaptation projects, including on farms. (See Title IV, Sect. 462).
8. The American Clean Energy and Security Act protects farmers from stormy forecasts.
Inaction on global warming represents ongoing adherence to today’s status quo of volatile energy prices, extreme weather events, and increasing dependence on disaster assistance. Agriculture is particularly vulnerable to the increased water shortages, widespread drought and floods, and lower crop yields that would result from global warming. H.R. 2454 makes the reductions in greenhouse gas pollution scientists urge to prevent the worst impacts of global warming.
Jake Caldwell is Director of Policy for Agriculture, Trade and Energy at the Center for American Progress. Alexandra Kougentakis is a Fellows Assistant. To read more of his analysis and reports, please go to the Energy and Environment page of our website.