No single part of the country is better positioned to both lead the country and reap the rewards of the new clean energy economy than rural America. But in a recent opinion piece, The Economist weekly newspaper proclaimed, “The Biggest Obstacle to a Climate-Change Bill is Rural America.”
The essay inaccurately portrayed rural America as universally opposed to clean-energy and climate change legislation, and America’s farmers as frozen in their tracks, incapable of action for fear of high energy prices.
The real story is less about Chicken Little and speculative increases in energy prices, and more about rural America’s opportunities to lead the clean-energy transformation of our entire economy. In reality, rural America is uniquely situated with abundant land and natural resources, an educated workforce, and the leadership capacity and flexibility to drive the clean-energy transition for the nation. What’s more, the costs of legislation for farmers will not be as high as some claim, and these will be more than made up for by income farmers would see from a carbon offsets market and expanded renewable energy.
Are the costs of fighting global warming too high?
Opponents of action on global warming often claim any action will lead to higher input costs on fuel and fertilizer. But are the costs really that high? The U.S. Department of Agriculture’s preliminary economic analysis of clean-energy and climate change legislation concluded that in the short term, fuel prices will rise 0.3 percent, and fertilizer costs will show little effect due to the bill’s assistance to energy-intensive, trade-exposed industries. Additionally, USDA’s analysis does not include the potential benefits from the technological changes that are occurring right now on farms, along with improved fuel and fertilizer management and the higher commodity prices forecast for the future.
Others agree the legislation’s effects on farmers won’t be as severe as opponents claim. “If the United States adopts a cap-and-trade policy to combat climate change,” notes Bruce A. Babcock, director of the Center for Agricultural Rural Development at Iowa State University, “the negative impacts on agriculture will likely be relatively small, particularly if agricultural emissions remain uncapped.”
The added fuel and fertilizer costs for Iowa farmers, writes Babcock, totals $4.52 per acre, about a 1.5 percent hike. By switching to reduced tillage farming, farmers can earn $8 an acre by selling a carbon pollution offset.
Carbon offsets: A new income source
Climate change legislation now before Congress establishes and expands a carbon offsets market, under a carbon emissions cap program, that would allow farmers to create and sell carbon offsets to polluting entities as an alternative to reductions by polluters. This would reduce the cost of emissions reductions for polluters, who under the program would need to obtain permits to pollute. Farmers would be paid for what they do so well—their longstanding carbon sequestration and land stewardship efforts.
U.S. Secretary of Agriculture Tom Vilsack stated in recent testimony that for farmers, “In the long term, the economic benefits from offsets markets easily trump increased input costs from cap-and-trade legislation.” And Secretary Vilsack has called carbon dioxide reductions 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.”
As Vilsack says, there’s certainly opportunity for farmers to benefit from pollution reduction. 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. Clean-energy and climate change legislation promotes U.S. agricultural lands as a carbon sink by encouraging reduced tillage practices, tree and perennial planting, erosion prevention, rotational grazing, agricultural carbon offsets, and a market for carbon sequestration.
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. In a recent report on the economic impact of legislation, the Environmental Protection Agency has estimated that farmers will earn between $1.2 billion to $18 billion in annual benefits from carbon offsets. Another recently released University of Tennessee and 25×25 study predicts that farm revenue will grow by $13 billion a year from a well-designed carbon offsets trading system. That is real money in farmers’ pocketbooks.
Additional allowances will be set aside to reward farmers for other activities in the agricultural sector that reduce greenhouse gas emissions or sequester carbon. These activities might include projects in agriculture or forestry that reduce greenhouse gases, or sequester carbon, and provide other environmental benefits such as improvements in air and water quality, or natural resources; and they might also include rewarding early adopters, including producers that practice reduced tillage agriculture today.
Clean energy generated at home in rural America
Rural America has inherent advantages in land, water, transportation, and access to information that provide ideal conditions for the growth of renewable energy sources such as wind, solar, geothermal, and biomass.
Clean-energy and climate change legislation before Congress includes a nationwide renewable electricity standard requiring utilities to generate a percentage of their electricity from renewable resources. Many states already have renewable electricity standards enacted into law.
Farmers can help utility companies meet this new demand 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.
Farmers could also see more income from increased biofuel production, and current legislation could help them expand production. Advanced biofuels are being grown and produced in rural America today. Grant programs for the research, development, and commercial-scale deployment of advanced biofuels are included in clean-energy and climate change legislation. The current renewable fuel standard, a congressional mandate that ensures high volume production of biofuels, establishes ambitious targets for biofuels production each year until 2022. The renewable fuel standard 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. The approximately 15 billion gallons of existing and future conventional ethanol production capacity would be exempt from greenhouse gas reduction targets.
The cost of inaction
We can’t afford to continue today’s status quo of volatile energy prices, extreme weather events, and devastating economic losses. Agriculture is particularly vulnerable to the increased water shortages, widespread drought and floods, and lower crop yields that would result from global warming.
Furthermore, blanket opposition to clean energy and climate change legislation will leave farmers empty-handed, and hard-fought gains for rural America will be left on the table. If Congress does not act on climate change, the Environmental Protection Agency has pledged to do so under the Clean Air Act. Congressional action on clean-energy and climate change legislation is necessary in order to ensure the benefits of these provisions are delivered to rural America.
Jake Caldwell is the Director of Policy for Agriculture, Trade & Energy at American Progress.
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