Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: United States
Corn+Soybean Digest

Can You Afford Cap and Trade?

Do you know anyone who's not in favor of protecting the environment and being a good steward of the land? Surely you and your farmer neighbors already take pride in any and all conservation efforts you can.

But when it comes to legislating how much of a carbon footprint we leave behind, we all need to pay attention and get involved — at some level — in the debate.

“Cap-and-trade” legislation, which is slated to be a priority for the 111th Congress, is filled with nuances and potential hardships for America's farmers. On the other hand, it could generate some additional revenue for farmers who sequester carbon and could then sell offsets to investors or corporations.

A preliminary study by the University of Missouri's Food and Agricultural Policy Research Institute (FAPRI) claims that you could be looking at added operating costs of $30,000 by 2050 for a 1,900-acre farm. That was based on projected energy price changes from an international energy consultant. It did not, however, assume fertilizer was exempt until 2025.

The legislative goal of H.R. 2454, called the American Clean Energy and Security Act of 2009, is to create clean-energy jobs, achieve energy independence, reduce global warming, cut pollution and begin the transition to a clean-energy economy.

The “cap” in the name comes from efforts to limit greenhouse gas emissions to 97% of 2005 levels by 2012 and reduce emissions to 17% by 2050.

The “trade” part of the name allows provisions for selling allowed emissions. This provides roles for agriculture and forestry. The Commodity Futures Trading Commission would set up markets for emission trades, just like futures trades in corn and soybeans.

Opponents claim this bill will raise energy costs for American households by $800-1,300 by 2015. In fact, everything produced in the U.S. will likely have added costs. They also say that even at an aggressive adherence to regulations, the maximum drop to the earth's temperature would be no more than 0.1° F by 2050. Some experts claim we can't even estimate the absolute mean surface temperature of the earth within 0.1° F.

Also, even though the European Union and the U.S. may be buying into cap and trade, until recently polluting giants like China and India have largely ignored global efforts to diminish emissions — so has Mexico.

The issues are complex and big, real big. Stay informed. For more perspective, please see the point/counterpoint story in this issue called “Do Carbon Credits Make Sense?” on pages 6-7.

The economy, health care reform and war are top priorities for a busy president and Congress. Still, global warming is on the agenda and all of agriculture needs to be at the legislative table.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.