From the Executive Summary.
Read the Full Report.
Analysis of the Implications of Climate Change and Energy Legislation to the Agricultural Sector
To assess the impacts of federal climate and energy legislation, the 25x'25 Alliance asked the University of Tennessees Bio‐based Energy Analysis Group (BEAG) to analyze how several proposed energy/climate change policy scenarios might impact land use change, feedstock production, feedstock prices, and farm income, as well as carbon costs and payments for producers.
The key findings of this study (the first of four parts):
Under a properly constructed cap-and-trade program:
Net returns to agriculture are projected to be positive including up to $13 billion annually in additional revenues for agriculture and forestry and exceed baseline projections for eight of nine crops analyzed;
Income from offsets and from market revenues is higher than any potential increase in input cost including energy and fertilizer;
At projected carbon prices of up to $27 per MtCO2e, afforestation of cropland will not occur;
Major shifts in commodity cropland use does not occur;
Demand for bioenergy feedstocks will cause significant shifts to hay and dedicated energy crop acreage from pasture conversion;
Crop and beef prices are not disrupted; and
Biomass feedstock production creates significant direct and indirect reduction in greenhouse gases (GHG). This includes a direct reduction of an accumulated 460 million metric tons CO2 equivalent.
If emissions are regulated by EPA without the benefit of multiple offsets:
Net farm income is projected to fall below baseline projections;
Agriculture is subjected to higher input costs with no opportunity to be compensated for the GHG reduction services the sector provides;
Impacts to beef production are uncertain; and
If afforestation and grassland sequestration are the only offsets allowed, and carbon prices are as high as $160 per MtCO2e, sixty million acres of cropland could be converted to forests and grasslands.
An operationally efficient cap-and-trade program is defined as one that is designed to allow offsets for multiple practices, including:
o reduced soil tillage
o bioenergy crops
o methane capture
o efficient fertilizer application
o planting perennial grasses or trees on marginal land
o keeping good farmland in crop production |
