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PPI | Model Initiatives | September 5, 2003
Carbon Cash Crop


PPI Play | Encouraging farmers to adopt practices that offset greenhouse gas emissions
Where It's Working | Nebraska, Illinois, Oklahoma, and Wyoming. Proposed in Idaho and South Dakota.
Players | State officials, private landowners, public universities

Back to the Main Menu

Most policies to combat climate change focus on stemming carbon dioxide and other greenhouse gas emissions. Lesser-known efforts are "sequestration" measures -- activities that keep carbon and other substances implicated in climate change in the ground and out of the upper atmosphere.

According to the U.S. Department of Agriculture, major agricultural states can potentially sequester more than 8 percent of the 1.9 billion metric tons of greenhouse gas emitted in the United States annually. The Consortium for Agricultural Soils Mitigation of Greenhouse Gases, made up of nine U.S. universities and the Batelle-Pacific Northwest National Laboratory, says the figure could climb to 20 percent if farms adopt sequestration practices widely.

Experts say the key is integrating sequestration activities into a market-based "cap-and-trade" approach to reducing greenhouse gasses. Under the approach, government would put a cap on emissions and issue emission permits equal to that level to companies and other greenhouse gas producers. Businesses that excel at cutting their emissions could sell their excess permits on a commodity market to other businesses that need them. Companies could also buy emission credits from farmers and foresters who sequester carbon through improved land-management practices.

"No-till" farming, for example, reduces the release of carbon dioxide from decaying plant material by starting new crops amid the residue of the last year's harvest. Currently, about 20 percent of the country's cropland -- roughly 55 million planted acres -- is no-till, according to the Core 4 Conservation Alliance, a partnership of farmer organizations, agribusinesses, government agencies, and universities. Other sequestration practices include conversion of marginal farmland to grassland and substituting biomass and energy crops for fossil fuels.

In most cases, sequestration practices do more than just help fight climate change. Increasing soil's organic content through carbon storage helps boost its productivity. No-till farming and conversion of marginal lands also stems soil erosion and improves air and water quality.

According to Richard Sandor, a Northwestern University expert on cap-and-trade policies and head of the new Chicago Climate Exchange, even using the conservative estimate that carbon will trade for $20 to $30 per ton, "paying farmers to sequester 200 million metric tons of carbon per year could add $4 billion to $6 billion of gross income to the farm economy-and possibly up to 10 percent of typical net farm income." Carbon markets, he adds, can also "soften farm income cycles by taking land out of crop production and putting it into conservation uses when relative prices favor carbon sequestering over food production."

Several bills now before Congress would recognize and reward sequestration activities. They include the Climate Stewardship Act of 2003 (S. 139) introduced by Sens. Joseph I. Lieberman (D-Conn.) and John McCain (R-Ariz.) and the Clean Air Planning Act (S. 843) sponsored by Sens. Thomas Carper (D-Del.), Lincoln D. Chafee (R-R.I.), and Judd Gregg (R-N.H.).

Nebraska is among the growing number of farm states to recognize sequestration's benefits. According to the state's Department of Natural Resources (DNR), cropland management practices there now help sequester about 1.7 million metric tons of carbon per year (roughly .09 percent of total U.S. emissions). That figure could increase to 2.3 million metric tons (or 0.12 percent of U.S. emissions) if all Nebraska cropland is made no-till.

In 2000, Nebraska's unicameral legislature passed the nation's first law explicitly designed to promote sequestration. L.B. 957 established a Carbon Sequestration Advisory Committee comprised of representatives from agriculture, energy, academia, and state government. The law directed the committee to assess sequestration's economic and environmental benefits. It published its findings in a report released by the state Department of Natural Resources (DNR) in 2001.

Among its findings, the committee recommended a demonstration project to help landowners assess their cropland's carbon storage potential. State-commissioned researchers at Colorado State University and the U.S. Department of Agriculture used a computer model to develop statewide carbon sequestration estimates, broken out for various land use and management practices. The data will help farmers and ranchers manage their land better to sequester carbon. The report also includes a section by researchers at the University of Nebraska Public Policy Center discussing laws and policies needed to support such efforts.

The task force also called for monitoring and verification measures to help ensure that a ton of carbon sequestered by a farmer is really equivalent to a ton of carbon emitted by a company. To help refine how sequestration activities are measured, the committee called on the state to conduct a greenhouse gas inventory to identify major emission sources and create a baseline for reduction strategies. According to the U.S. Environmental Protection Agency, 38 states and Puerto Rico have already completed such inventories and two others have inventories in progress (see "PPI Greehouse Gas Play").

Funding for Nebraska's sequestration efforts comes in part from the state's Environmental Trust Fund, established in 1992 to conserve, enhance, and restore the state's natural environments. Most of the trust fund's monies are derived from state lottery proceeds.

According to University of Michigan Professor Barry G. Rabe, who studies state carbon-control policies, the Nebraska law is rooted in an Ohio conference attended by members of the Nebraska Agricultural Policy Task Force. During the conference, presenter John Brenner of Colorado State University singled out Nebraska's potential to sequester carbon. Doubting they could sell the concept of climate change to skeptical farmers back home, task force members decided to host a similar conference in Nebraska. To drive their point home, they invited Brenner to restate his case. His presentation helped sway enough skeptics to build support for the bill, which was sponsored by former state Sen. Merton "Cap" Dierks and signed by Gov. Mike Johannes.

Since then, Illinois, North Dakota, Oklahoma, and Wyoming have passed what Rabe calls "strikingly similar" versions of the Nebraska bill. Versions have also been introduced in the Idaho and South Dakota legislatures.

Progress in Nebraska has slowed, however, due to its severe budget shortfall, its pressing need to deal with the consequences of prolonged drought, and turnover in the legislature and state bureaucracy.

Launching a sequestration pilot project is the next logical step in the state's efforts.

Sequestration supporters say the state might have made more headway by now if Nebraska's financial situation were not so desperate. The dry spell has only compounded the problem. Applications for federal and private grants to help start the project are pending. Turnover among Nebraska officeholders has also slowed the project's momentum. Dierks, L.B. 957's sponsor, lost his re-election bid last November, and the terms of the members of the Nebraska Carbon Sequestration Advisory Committee expired last year.

Washington's reluctance to address climate change is also slowing progress in Nebraska and other states. Until Congress passes legislation to make carbon control mandatory, farmers and ranchers will be unable to fully realize the value of sequestration. Pending such action, programs such as Nebraska's are helping to transform carbon into a viable cash crop in the heartland.

Resources for Action

Nebraska Legislative Bill 957
http://srvwww.unicam.state.ne.us/pdfs/
XCVI/intro/INTRO_LB957.pdf

Nebraska Carbon Sequestration Advisory Committee
www.carbon.unl.edu/

University of Nebraska Public Policy Center's Carbon Sequestration Project
http://ppc.unl.edu/

Nebraska Department of Natural Resources, Planning and Assistance Division
www.dnr.state.ne.us/docs/compplan.html

Consortium for Agricultural Soils Mitigation of Greenhouse Gases
www.casmgs.colostate.edu/

Climate Stewardship Act of 2003 (S. 139)
http://thomas.loc.gov/

Clean Air Planning Act of 2003 (S. 843)
http://thomas.loc.gov/

Additional Reading

Nebraska Department of Natural Resources, "Carbon Sequestration, Greenhouse Gas Emissions, and Nebraska Agriculture: Background and Potential," Lincoln, Nebraska, Department of Natural Resources, 2001
www.nrc.state.ne.us/Carbon/
CarbonSequestrationFinal.pdf

Rabe, Barry G., "Greenhouse & Statehouse: The Evolving State Government Role in Climate Change,"
Prepared for the Pew Center on Global Climate Change, November 2002
www.pewclimate.org/global-warming-in-depth/
all_reports/greenhouse_and_statehouse_/index.cfm

Sandor, Richard L. and Jerry R. Skees, "Creating a Market for Carbon Emissions Opportunities for U.S. Farmers," Choices (Magazine of the American Agricultural Economics Association), First Quarter 1999, p. 13
www.envifi.com/Bios/Choices.htm

Conservation for Agriculture's Future, "1990-2002 Conservation Tillage Trends"
www.ctic.purdue.edu/Core4/CT/CTSurvey/NationalData.html

Contacts

Rick Leonard
Research Analyst
Agriculture Committee
Nebraska Unicameral Legislature
Room 1019, State Capitol Building
Lincoln, NE 68509
(402) 471-2630
rleonard@unicam.state.ne.us

Barry G. Rabe, Ph.D.
Director, Program in the Environment
University of Michigan School of Natural Resources and the Environment
1533 Dana Building
430 E. University
Ann Arbor, MI 48109-1115
(734) 647-4333
brabe@umich.edu

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