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Facing carbon credits – 3

By Staff | Mar 5, 2010

Of the various sources of U.S. greenhouse gas emissions, agriculture comprises about 7.4 percent, according to 2005 data.

“We’re a small part, but a dynamic part of the puzzle,” said Jerry Hatfield, director of the National Laboratory for Agriculture and Environment, who noted that of the various greenhouse gasses, carbon dioxide, methane (from livestock) and nitrous oxide (from fertilizer management) have a direct relationship to agricultural management.

Though ag is not a major contributor to greenhouse gas emissions, the impact of potential climate-change legislation could prove costly for agriculture.

Studies of the cost that climate change legislation range from 1 percent for some crops to $30 billion in lost farm income, according to the Heritage Foundation.

A variety of industries have sounded the alarm due to the following issues:

  • Potentially higher nitrogen costs. The Fertilizer Institute argues that coal companies will move to natural gas, pushing up nitrogen prices and leading to more imports.

Since 2000, the U.S. nitrogen industry has closed 26 nitrogen fertilizer production facilities, due primarily to the high cost of natural gas.

Currently, only 29 nitrogen plants are still operating in the United States, and 55 percent of the U.S. farmer’s nitrogen fertilizer is imported, according to TFI. Of this imported fertilizer, 82.7 percent comes from countries without climate change policies in place to regulate carbon.

  • Higher fuel costs. Diesel and other fuels would rise in price as pollution caps are applied on refineries.
  • More expensive equipment. Under these scenarios, machinery becomes more expensive to build.

While the U.S. Department of Agriculture has estimated that carbon offsets could generate $30 billion a year by 2050, acres will have to be switched from crops and pasture to trees. USDA estimated 60 million more acres in trees, with approximately 35 million acres coming from crops, and 24 million acres coming from pastures.

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