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Agriculture has a potential role to play in the removal
of carbon dioxide from the atmosphere. Land managers can
change production practices or land uses to increase the
carbon stored in soil or vegetation. Land managers can
use other changes in production practices and land uses
to reduce emissions of methane and nitrous oxide. In addition,
agriculture can produce biofuels, which can substitute
for fossil fuels and thereby potentially reduce greenhouse
gas emissions. All of these actions are considered forms
of mitigation.
Research underway at ERS will assess the costs of these
options.
This information can then show the potential role for these
options in any U.S. efforts to offset or reduce greenhouse
gas emissions. Agricultural landowners may have the option
to participate in greenhouse gas markets, which may be
established by Federal or State policies or by private
groups. Economic research can assess the likely extent
of participation in those markets and the amount of greenhouse
gas reductions that might be expected at different market
prices and can show how the economic opportunities from
participation might be distributed across commodities and
regions.
The above figure illustrates the potential increase in
carbon sequestration under a hypothetical example in which
farm-level use of mitigating practices increases by 50
percent. Research underway at ERS will estimate the actual
adoption rates that might occur at any given carbon price,
beyond this across-the-board scenario. Economic research
can further show how farmer participation, costs and benefits
would be affected by different policy approaches.
Several of the activities that count as mitigation have additional
environmental benefits, such as providing wildlife habitat
or reducing nonpoint water pollution. ERS conducts research
on the economic value of these benefits. This value may complement
the value of carbon markets. An ERS
report on the use of markets to increase private investment
in environmental stewardship examined the environmental services farmers could
provide, identified impediments to market formation, and
explored potential roles for government action. Case studies
examined in the report include carbon markets, as well as
water quality trading, wetland restoration, and recreation
on Conservation Reserve Program lands.
Carbon Sequestration
Agriculture and forestry play significant roles in reducing atmospheric
greenhouse gas concentrations through carbon storage in soils and vegetation.
Several recent studies indicate that farm, ranch, and forest lands could
increase sequestration by adjusting land uses and production systems.
A large proportion of this additional sequestration is believed to be
achievable at lower cost than emissions reductions from other sectors.
On the other hand, some land use and management changes can cause stored
carbon to be released. Furthermore, land-use changes are
linked across time and space through market effects. This linkage means
that a wide range of changes in stored carbon must be accounted for in
determining the effects of carbon policies.
ERS is using its knowledge about land markets, commodity markets and market
interactions, including possible international market effects, to provide critical
information on these issues.
For more information, see
The Use of Markets To Increase
Private Investment in Environmental Stewardship (April 2008), Economics
of Sequestering Carbon in the U.S. Agricultural Sector (April
2004), and the Amber
Waves summary article.
Bioenergy
Bioenergy refers both to biofuels, which are transportation
or heating fuels such as ethanol and biodiesel that are
derived from plant matter, and to raw plant biomass used
to generate electricity. Bioenergy may play a role in addressing
climate change because it can, in some circumstances, substitute
for other energy sources such as gasoline or coal that
are sources of carbon dioxide emissions.
Federal and State laws and volatile energy prices have
created a domestic market for the crops from which bioenergy
is derived. The Energy
Independence and Security Act of 2007 requires that the U.S. use 11.1 billion gallons of
renewable fuels in 2009. This mandate increases to 36 billion
gallons by 2022. Roughly half of the States have laws requiring
a portion of the State's electricity to be generated from
renewable sources, some of which will be plant-based sources.
Mandates for renewable electricity are also being discussed
at the Federal level.
The demand for bioenergy has implications for U.S. and
world agricultural markets. ERS provides analysis of these
market effects. The production of biomass may affect soil
carbon storage, either positively or negatively, according
to the same pathways described for carbon sequestration.
ERS provides analysis of where and how bioenergy and related
crops are grown, which helps researchers determine their
effects on the carbon balance.
ERS is approaching bioenergy issues in several ways (see
the ERS Bioenergy Briefing
Room and special Bioenergy
Feature page):
- Monitoring the state of the agricultural
system and rural communities
- Providing market analyses
- Developing projections of commodity supply,
demand, and retail food prices
- Conducting indepth research on policy-relevant
topics
For more information, see Increasing
Feedstock Production for Biofuels: Economic Drivers,
Environmental Implications, and the Role of Research,
released by the interagency Biomass
Research and Development Board. The report presents an economic assessment
of feedstock production from agriculture and forestry sources and analyzes the
likely greenhouse gas implications of various policy and economic scenarios.
It concludes that farm-sector greenhouse gas emissions of increasing corn ethanol
production from 12 to 15 billion gallons a year are likely to be modest. It
also shows that a 50 percent increase in corn productivity can reduce greenhouse
gas emissions associated with increasing biofuel production by 7.7 million metric
tons (CO2 equivalent). This latter finding shows how increased commodity
productivity acts as a kind of greenhouse gas mitigation strategy. Many uncertainties
remain in this analysis, especially the possible indirect land use changes resulting
from biofuel policy.
Energy Conservation and Efficiency
Agricultural
producers, like other producers in the economy, use fossil
fuels as part of the production process. Farmers can
undertake
energy conservation and efficiency
improvements
to reduce their
use of these fuels. They can improve their operations'
energy efficiency by installing new technology, purchasing
new machinery, or using different production methods that
can decrease fuel use.
Farms can reduce emissions from machinery by switching
to alternative fuels like ethanol, biodiesel, or natural
gas that emit fewer greenhouse gases.
The Rural
Energy for America Program provides funds to agricultural
producers and rural small businesses to purchase and
install renewable energy systems and make energy efficiency
improvements.
Non-Carbon Dioxide Emissions: Soil Management, Manure
Management, and Enteric Fermentation
Livestock production and the application of fertilizer
to fields contribute to non-carbon greenhouse gas emissions.
Belching, primarily from cattle and sheep, formally known
as enteric fermentation, emits methane, a powerful greenhouse
gas. Animal waste, from all species, also releases methane
unless steps are taken to "capture" this gas. The application
of synthetic fertilizers and other agricultural soil management
practices emits nitrous oxide, another greenhouse gas.
Agricultural producers can reduce methane
and nitrous oxide emissions through changes in production
practices. Changes in livestock feed have been found
to reduce the amount of methane produced in the animals'
digestive systems. Changes in the timing and method of
fertilizer application can reduce nitrous oxide emissions.
The use of anaerobic methane digesters on dairy and hog
farms captures methane produced during manure storage so
that it is not released to the atmosphere. Producers can
use the captured methane to generate electricity for use
on the farm or for sale to electric utilities,
where feasible,
which reduces
reliance on fossil fuels and provides an additional
source of income.
Federal policy can provide incentives to farm operations
to adopt practices that reduce these non-carbon greenhouse
gas emissions. However, in some cases, producers may face
tradeoffs between reduced greenhouse gas emissions and
improved water quality when making decisions about manure
and nutrient management. For example, open lagoons and
other liquid containment facilities store manure that might
otherwise contaminate water bodies, but in doing so create
conditions for manure decomposition that releases methane.
Further actions can be taken by producers to capture the
methane gas emissions generated by manure decomposition.
For more information, see Managing
Manure To Improve Air and Water Quality (September
2005).
See also the ERS Briefing Room Agricultural
Chemicals and Production Technology: Nutrient Management.
Policy Design
Federal policy can play an important role in determining
greenhouse gas emissions from agriculture and in providing
incentives for landowners to reduce emissions through various
mitigation activities. Numerous Congressional, Administration
and stakeholder proposals call for a nationwide greenhouse
gas cap-and-trade system that would allow farmers to obtain
and sell credits for carbon storage and other greenhouse-gas
mitigation activities, also called offsets. For example,
up to 1 billion tons of offsets from domestic activities
including from agriculture would be allowed under the Waxman-Markey
American Clean Energy and Security Act (H.R. 2454) passed
by the House of Representatives June 26, 2009. The exact
format that these offset credits would take, should this
bill become law, has yet to be determined. An alternative
approach, following the model of existing conservation
programs, would be for government programs to reward landowners
directly for undertaking emission-reducing or offsetting
activities.
The design of these programs will play an important role
in the level and type of participation, and thus in the cost
of reducing greenhouse emissions from agriculture and from
regulated sectors.
Multiple ERS research reports (see below) have shown the
importance of policy design in achieving environmental
benefits from USDA's conservation programs in a cost-effective
manner. Because many of the practices supported by
those programs sequester carbon as well as providing other
environmental benefits targeted by the current programs,
insights from that research provide a strong foundation
and "lessons
learned" for
considering the potential implications of alternative approaches
to greenhouse gas mitigation policy design.
The manner in which climate policies and conservation
programs interact may have important implications for both.
For example, the Conservation Reserve Program (CRP) retires
environmentally sensitive cropland from production and
pays farmers to plant conservation cover under 10- to 15-year
contracts. Current CRP enrollment by average cost and vegetation
type is shown below.
The CRP does not currently preclude
participants from also receiving payments for sequestering
carbon. Therefore, a national cap-and-trade system for
greenhouse gases that includes credits for agriculture
could make participation in both a carbon market and
the CRP more attractive. On the other hand, if "stacking" of
credits is not allowed, carbon markets and conservation
programs may compete for the same land. Thus, coordination
between conservation programs and carbon markets is an
important policy consideration.
For more information, see The
Use Of Markets To Increase Private Investment in Environmental
Stewardship (September 2008).
See also the ERS Briefing Rooms on
Other related ERS reports include:
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