Why does the "safety valve" matter to farmers?

Today’s post is from Sara Hessenflow Harper, a policy analyst for our national climate campaign. She does extensive outreach to the agricultural community.

Yesterday, Mark MacLeod wrote about the “safety valve” and its flaws. I wanted to add to the discussion a more specific look at its implications for rural America. In addition to the problems Mark noted, the “safety valve” would also cut farmers out of the carbon market. Here’s how.

The leading proposals to combat global warming have this in common: they would put a cap on carbon emissions and create an emissions trading system to help companies find and fund reductions at the lowest cost (see Mark’s earlier post about how cap and trade works). When Congress caps carbon, it will create a major new market for emissions allowances. Anyone who can reduce emissions will have the opportunity to profit.

Agriculture, perhaps more than any other U.S. industry, has a big stake in that market. American farmers can reduce our carbon emissions in several ways. First, agricultural soil sequestration of carbon – trapping carbon in the ground through no-till farming and other practices – could meet between 20 and 40 percent of proposed U.S. emissions reductions. Coupled with low-carbon biofuels and methane capture, those reductions could add up to major benefits for the climate and major economic benefits for rural America – $8 billion or more a year for farmers. That rivals the entire U.S. wheat crop.

The opportunity to participate in the carbon market will be a huge boost for rural communities. But a so-called a “safety valve” could set an artificial ceiling on the price of carbon and let companies buy cut-rate emissions allowances from the government. (Again, you might find Mark’s explanation of the “safety valve” helpful.)

That would effectively cut farmers out of the carbon market. If companies can purchase emissions allowances from the government at an artificially low price, they have no reason to buy them from farmers at market value. That means more carbon in the atmosphere, and less economic opportunity for rural America. The best safety valve for the U.S. economy is a robust carbon market that lets everyone participate and benefit.

We just launched a national ad campaign along with National Association of Wheat Growers explaining that the “safety valve” is bad for the climate and bad for farmers. For more about what a carbon market means for rural America, you can see my paper Acres of Opportunity [PDF].

And you can always post questions here, too!

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