Texas Ag Forum addresses future climate change policy
While the debate on climate change policy continues in Washington, Texas' agriculture industry representatives were all ears recently at the 2009 Ag Forum in Austin learning more about the potential impacts on livestock and crop production.
"Texas is front and center in the carbon debate," said Dr. Mark Hussey, vice chancellor and dean of agriculture and life sciences for the Texas A&M University System, speaking to the 150 attendees. "Whether it's a farmer, rancher or researcher, this debate is very important to the U.S. The potential is there for farmers and ranchers to capitalize on the carbon market."
Congress is debating either a carbon tax or a cap-and-trade system as part of the proposed Clean Energy and Security Act, a measure that would reduce the amount of greenhouse emissions in the U.S.
A cap-and-trade system would establish a carbon-credit trading market. Industrial operators, including farmers and ranchers, would receive credits for reduced emissions or for environmentally friendly land practices such as reduced tillage.
Dr. Bruce McCarl, a Regents Professor of agricultural economics with Texas AgriLife Research, said livestock producers and crop producers could benefit under such a scenario. For example, pork producers could take advantage of manure lagoon systems and the ability to capture methane.
"This is the biggest agricultural thing happening in the international trading scheme," he said. "There are a lot of hog manure lagoons being covered, capturing methane and selling it in Europe under the international Kyoto Accord."
Under a carbon tax, without any grandfathering, the emissions would be taxed and the money sent to the government for redistribution, McCarl said.
"If lagoon covering costs less than the tax, they might produce too much. They could increase operation size but still would have to pay for emissions."
Under cap-and-trade, they would be given credits to emit and could do nothing, McCarl said.
"But if it was beneficial they could cover and sell the permits (on an open market)," he said. "Of course, this manure offset would have to be authorized for something to be done."
For farmers, they could receive added revenue for carbon sequestration methods, such as conservation tillage. Instead of traditional intensive plowing of fields, farmers could earn credit certificates for reduced forms of tillage and sell those on an open market.
To sell these credits, farmers and livestock producers would use a middleman, known as an "aggregator," to package and broker on an open market.
East Texas timber growers can gain from the proposed system, McCarl said, since trees can be cut down and processed for electricity, then establishing new forests through afforestation.
"Taking trees in East Texas and burning them may be an attractive way of avoiding carbon offsets," he said.
Overall, McCarl said the potential carbon economy "will expose agriculture to a new market."
But it's uncertain if and when and what new legislation might become law.
"From what I've seen and heard, it's doubtful U.S. cap and trade-policy will pass into law this year," he said. "There are a lot of competing proposals out there. Plus health care, supreme court justices and other matters may postpone action."
U.S. House Agriculture Chairman Collin Peterson, D-MN, told attendees via telephone he hoped to slow the pace of debating the bill in an attempt to protect agricultural interests.
"There's pressure out there to move this thing right away," he said. "The Speaker of the House wants to go forward with a bill."
Peterson said he felt the farm groups had the same concerns about the potential effects of the proposed bill on agriculture.
Late Tuesday, Peterson released the following statement regarding an agreement with House Energy and Commerce Committee Chairman Henry Waxman on the American Clean Energy and Security Act of 2009.
"We have reached an agreement that works for agriculture and contributes to the reduction of greenhouse gas emissions in the United States. The climate change bill will include a strong agriculture offset program run by the U.S. Department of Agriculture that will allow farmers, ranchers and forestland owners to participate fully in a market-based carbon offset program. This agreement also addresses concerns about international indirect land-use provisions that unfairly restricted U.S. biofuels producers and exempts agriculture and forestry from the definition of a capped sector."
A House vote has been scheduled for June 26.
The Texas Ag Forum is as an association of agricultural leaders and representatives from across the Texas food-and-fiber system. It was founded more than 20 years ago to provide a forum for open and public discussion of problems and emerging issues in agriculture. It is a stakeholder-driven program in partnership with Texas AgriLife Extension Service.