This week, the U.S. House Agriculture Subcommittee on Conservation, Credit, Energy, and Research is conducting welcome hearings on the potential economic impacts of climate change on the farm sector. Farmers already know firsthand the threat posed by extreme weather to rural livelihoods and the nation’s food and energy supplies. Vast swaths of America’s agricultural land in Arkansas, Louisiana, Mississippi, and Texas qualified this week for a U.S. Department of Agriculture federal farm disaster declaration due to heavy crop losses from drought in the spring and wet harvests this fall.
Fortunately, farmers can play a major role in mitigating climate change’s effects. The House-passed American Clean Energy and Security Act, H.R. 2454 and the Senate’s Clean Energy Jobs and American Power Act of 2009, S. 1733 recognize and reward farmers for the benefits they can provide the United States by raising incomes, creating jobs, reducing dependence on foreign oil, enhancing our national security, and confronting climate change.
Rural America also has a great deal to gain economically from congressional action on comprehensive clean-energy and global warming legislation. Here are 10 reasons why farmers and rural America should support action on clean energy and global warming.
1. The costs to agriculture of fighting global warming have been greatly exaggerated
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, 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 (see reason number four below).
2. Clean-energy and global warming legislation protects farmers from disastrous forecasts
The evidence is mounting. The volatile impacts of global warming seen in increased drought, reduced crop yields, and unusually wet harvests remind us day in and day out of the potential future that lies before rural America and the nation. The cost of 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. Clean-energy and global warming legislation makes the reductions in greenhouse gas pollution scientists urge to prevent the worst impacts of global warming.
3. Farms and forests can reduce global warming pollution
Rural America is uniquely situated with abundant land and natural resources, an educated workforce, and the leadership capacity and flexibility to drive the nation in the clean-energy transition and the fight against global warming.
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 global warming legislation promote 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. Farmers deserve credit for what they do so well—their longstanding commitment to carbon sequestration, soil conservation, and land stewardship efforts.
4. Farmers can grow their incomes by selling “carbon offsets”
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.
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.”
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 global warming legislation the Environmental Protection Agency 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 funneled directly into farmers’ wallets.
5. Farmers will receive additional incentives for activities that reduce greenhouse gases
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, and the good news is there are many opportunities for farmers to make the reductions and reap profits.
Clean-energy and global warming legislation before Congress sets additional allowances aside, beyond carbon offsets, to reward farmers for other activities in the agricultural sector that reduce greenhouse gas emissions. 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.
6. Farmers can earn new income by leasing their land for wind turbines while continuing to farm
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 global warming 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.
7. Farms will produce the cleaner fuels of the future
As a nation, we must promote advanced biofuels grown and produced in rural America. Clean-energy and global warming legislation requires the EPA to establish a grant program for research, development, and commercial-scale deployment of advanced biofuels. 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.
8. The legislation includes a safety net to protect rural families from higher energy prices
Rural America has been enduring wild swings in volatile energy prices for too long. Clean-energy and global warming legislation provides a cash energy refund for rural consumers experiencing a loss in purchasing power due to energy costs.
9. Energy efficiency measures would reduce farmers’ electricity bills
The energy-efficiency provisions in clean-energy and global warming legislation provide 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.
10. Scientific review would help identify future threats
The evidence of global warming’s harms is mounting at an alarming rate. To ensure that rural America and farmers can identify and respond to climate changes, clean-energy and global warming legislation establishes programs, such as a national climate service and national climate adaptation program, that would consistently assess the impacts of climate change on agriculture and other sectors. Legislation also establishes funding to provide money for state and local adaptation projects, including on farms.
Jake Caldwell is the Director of Policy for Agriculture, Trade and Energy at American Progress.
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