Farmers want Obama to make carbon a cash crop under climate law

Font Size

Print

Feedback

Email

Discuss

• Discount UK Shopping

Related Articles

Disney quarterly results beat expectationsInvestors questioned Morgan Stanley's pay: ReportCharges added in Rajaratnam insider trading caseSingTel Q3 profit up 24 pct at $699 mn

: Rex Woollen grows corn and soybeans. In 2007, the Wilcox, Nebraska, farmer started cultivating a new commodity: carbon.

By not tilling his 800 acres, Woollen by some estimates keeps 470 tonne of carbon per year in the ground and out of the atmosphere. Because of that, he gets carbon credits he can sell on the Chicago Climate Exchange. At first, neighbouring farmers were sceptical. “They called me a tree-hugger,” Woollen said. “Then I showed them my first check.”

Woollen gets about $3,000 a year from the climate exchange’s carbon-trading pilot programme. While it isn’t much, to Woollen it hints at bigger potential profit as Congress considers mandatory, nationwide greenhouse-gas limits.

President Barack Obama and Democratic leaders in Congress back a “cap-and-trade” system to ease global warming by making companies obtain government-issued pollution permits. As allowable emissions drop over time, companies would have to reduce pollution or buy extra allowances. Businesses adopting clean-energy methods like wind or solar power could sell permits for a profit.

Farm-state lawmakers and agriculture groups want to let farmers like Woollen create a separate source of carbon allowances. Farmers who use eco-friendly farming techniques or plant trees would earn so-called offsets to sell alongside government permits on carbon markets.

Rural votes crucial

Agricultural offsets may be crucial to attracting enough votes from rural lawmakers to pass climate-change legislation, said Representative Stephanie Herseth Sandlin, a South Dakota Democrat. “We have to insist that agriculture has a seat at the table,” she said. Republican congressional leaders have likened Obama’s cap- and-trade proposal to a tax increase on energy, and the plan may pit coal-producing states against other areas. Farm organisations are also divided.

The American Farm Bureau Federation, the biggest farm group, has opposed cap-and-trade plans, saying they would raise fuel and fertiliser costs. The National Farmers Union likes the idea and is lobbying for a slice of the carbon market.

In ideal circumstances, farms have the potential to capture one-third of the carbon pollution now produced by the US, said Rattan Lal, director of Ohio State University’s Carbon Management and Sequestration Centre. Obama has said that by 2050 he wants to cut emissions by 80% from 1990 levels.

‘New income source’