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Will farmers and foresters benefit?
“Our analysis demonstrates that the economic opportunities for farmers and ranchers can potentially outpace - perhaps significantly - the costs from climate legislation.”
- USDA Secretary Tom Vilsack, July 22, 2009
How might landowners benefit?
- New biofuel or wind power markets
- Financial incentives for renewable energy and agricultural emissions reductions ( $75 million to $100 million annually from 2012-2016).
- Offsets (about $1 billion per year in 2015-20 to almost $15-20 billion in 2040-50 gross revenue).
Offsets in Cap-and-Trade
EPA(prints allowances
equal to cap)
Allowances to emit CO2
Offsets = Additional Allowances
©Scott Warren
Why offsets are popular
- Helps to keep costs down
- Builds political support by expanding beneficiaries
- Can provide benefits beyond carbon, such as water quality and habitat
Some potential land-based offset activities
- Improved forest management
- Afforestation (tree planting on crop or grazing land)
- Conservation tillage or other soil carbon management
- Methane management from cattle lots
A TNC Ohio Project Example: Afforestation at the Edge of Appalachia
- 500 acres
- 75,000 tons of CO2
Will this promise be delivered?
- USDA tasked with identifying eligible land-based activities.
- the offsets must come from “additional” projects that would no have occurred without the additional incentive an offset credit creates
- Offsets must be quantifiable, verifiable, transparent and enforceable.
- Must be “permanent” or at least very long term. Farmers may need to make commitments for up to 100 years, or buy replacement credits.
Summary
- Offsets are important to getting political support, and lowering costs of cap-and-trade.
- They offer potentially huge economic opportunities for farmers and other landowners.
- Land-based activities can also help us to protect water quality and habitat.
- However, offsets must meet rigorous standards and require commitments that may not be acceptable to many landowners.