If you haven't noticed yet, a recent article from the Economic Research Service is stirring up quite a bit of buzz. The article, The Role of Agriculture in Reducing Greenhouse Gas Emissions, suggests how agriculture might be incorporated into a national greenhouse gas reduction program. One of the best traits of this article is in its comprehensive list of ways that farmers across products can reduce their emissions, ranging from biogas to alternative tilling. It also offers up a few approaches for encouraging changes, and its seems like a good opportunity to discuss the pros and cons of these options.
The first incentive program mentioned gives carbon credits to farmers who change their practices, which they can then sell to industries participating in a cap and trade program. This program offers a lot of efficiency gains, but not necessarily huge environmental benefits. All incentive programs, if priced correctly, will motivate farmers and general industry to reduce emissions to a socially optimal point. In addition to this sort of efficiency, trade between sectors will make sure the reductions are spread appropriately. That is, society could take on undue costs in reducing greenhouse gases if all of the responsibility relies on one industry. Clearly, this type of program has a lot to offer. However, notice that all the of reduction emissions attained in the agricultural sector are compensated for by increases in emissions within the capped industries. This means that accurate forecasts of farmers responses are necessary, as the goal for reduced emissions in agriculture has to be worked into the initial cap and trade limitations. So this program might require a bit more planning, and doesn't offer environmental gains to programs that already have cap and trade in place, but it comes with a bundle of efficiency gains that make it very appealing.
Another program mentioned, setting national standards for alternative fuel content, is already (partially) in place. We've seen ethanol content being mandated on a state by state basis here, but with not great results. Yes, it guarantees a certain amount of progress that other programs cannot, but its lack of flexibility proves problematic. When international food prices soared, ethanol production couldn't be diverted- worsening the problem of hunger and the rise of gas prices. Further, as the environmental benefits are increasingly questioned, we're still stuck with the mandate of ethanol in particular. While requiring that alternative energy in general be incorporated into our national supply might prove a bit more flexible, it faces similar risks. The amount of alternative energy used cannot respond to market changes. The definitive change that it offers, however, could still sway policy. Which might not be entirely misguided- mandating a level of alternative energy and offering incentives for anything above it might be a good way to jump start change in the system.
The article also addresses an extension of two existing programs that already have some impact on Greenhouse Gas Emissions: the Conservation Reserve Program and the Environmental Quality Incentives Program. The Conservation Reserve Program (CRP) pays farmers not to farm highly erodible or otherwise sensitive land. As a carbon sequestration resource, the CRP is probably not very effective. That is, they are currently comparing the difference between farming and raising trees for 10-15 years, but do not compensate for additional land farmed elsewhere to in response to decreased production. This is an extremely complex prediction, but never the less we should take the currently predicted numbers with a grain of salt. The Environmental Quality Incentives Program (EQIP) pays farmers for changing their practices to more environmentally friendly measures.The EQIP might offer more potential for reducing emissions, as it can be designed to respond to urgent priorities and easily increased as necessary. However, EQIP requires a serious financial and time commitment from the government while cap and trade programs come at a relatively low cost.
Together, these program comprise a strong toolbox for reducing emissions in the agricultural system. To hazard a guess, we are likely to see all of them incorporated if a comprehensive greenhouse gas emissions law goes through.
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