All cap, no trade

By Bruce Knight

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There's no doubt in my mind that climate change is real.  I think any farmer who's experienced the pain of three years of drought knows we need to reduce our greenhouse gas emissions in the U.S. to turn the clock back on the damage to our environment.  Weather volatility hurts us all, but those whose livelihood depends upon receiving enough moisture to produce crops suffer the most when weather patterns are disrupted. 

But we can do more than complain about the weather.  Farmers and ranchers are well positioned to be part of the solution to cutting carbon dioxide emissions. 

To be frank, I think the Environmental Protection Agency is doing the right thing by seeking to cut CO2 emissions by 2030 by about one-third from 2005 levels.  And I think the 600 or so electric power plants that generate about a third of our nation's carbon dioxide are the right places to start, as about three-quarters of these plants burn coal.  EPA is planning to give states two years to develop new plans to reduce emissions, and power plants would have to meet interim goals in 2020 and final goals in 2030. 

Together we can feed the Bees"

But EPA's proposed changes to Section 111(d) of the Clean Air Act (currently available for comment) unnecessarily limit flexibility for states to develop the most effective and efficient plans to accomplish those goals.  The proposal announced on June 2, 2014, would lower the cap for emissions but permit trading of carbon credits only within the power generation sector.  It leaves out a valuable opportunity for agriculture to provide carbon sequestering offsets for power plant emissions.

This is a mistake, and I would encourage agricultural producers to draw this to EPA's attention before the October 16 end of the comment period on the proposal.  We need to be concerned about more than higher costs for rural electricity that will ensue from retrofitting power plants to burn coal and natural gas more cleanly.  Simply opposing EPA's rule is not in agriculture's best interest. 

Rather we need to look at the opportunities this rule could bring in efficiency and effectiveness if it were modified to permit the trading of carbon credits across sectors.  What if planting trees, switching to no till, putting in a cover crop or installing anaerobic digesters to transform methane into biogas were options for carbon credits that states could consider in developing their plans to reduce greenhouse gas emissions at power plants?  Permitting cross sector trading would significantly benefit agriculture by reducing our own carbon footprint, minimizing potential electric rate increases and providing an additional income stream.

Already there are effective carbon trading programs in California and in the nine northeastern states involved in the Regional Greenhouse Gas Initiative (RGGI).  Currently under RGGI, carbon credits can be used to meet 3.3% of emissions targets while California permits regulated entities to offset up to 8% of emissions through carbon credits.  These programs are recognized as innovative approaches to reducing greenhouse gases that offer flexibility and cost-savings.  Why not build on them in establishing lower targets for power plant CO2 emissions?  I know some in the agriculture sector fear that any regulation of greenhouse gases for the power sector or transportation will eventually lead to regulation of agriculture production.   I think trading of voluntary actions by agriculture is the single most effective way of precluding the risk of future regulation. 

I'd like to have the option for my South Dakota ranch to provide carbon credits to the rural electric co-op that supplies my electricity.  The planet would benefit, the co-op would benefit and so would I.

Many in agriculture have been lining up in opposition to the EPA rule.  But I think that is a short-sighted approach.  This is an opportunity for agriculture to be part of the solution to a problem that affects us all.  I encourage you to write to EPA to recommend inclusion of carbon offsets from agriculture as an option for reducing electric power plant generated CO2 emissions.

About the author: Bruce I. Knight, Principal, Strategic Conservation Solutions, was the Under Secretary for Marketing and Regulatory Programs at the U.S. Department of Agriculture (USDA) from 2006 to 2009. From 2002 to 2006, Knight served as Chief of Natural Resources Conservation Service. The South Dakota native worked on Capitol Hill for Senate Majority Leader Bob Dole, Rep. Fred Grandy, Iowa, and Sen. James Abdnor, South Dakota. In addition, Knight served as vice president for public policy for the National Corn Growers Association and also worked for the National Association of Wheat Growers. A third-generation rancher and farmer and lifelong conservationist, Knight operates a diversified grain and cattle operation using no-till and rest rotation grazing systems

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