Potential Implications of a Carbon Offset Program to Farmers and Landowners [ February 26, 2010]   [open pdf - 468KB]

"Congress is currently debating climate legislation which could affect the U.S. agriculture and forestry sectors. In June 2009, the House passed H.R. 2454, the American Clean Energy and Security Act of 2009. In November 2009, the Senate Committee on Environment and Public Works completed markup of S. 1733, the Clean Energy Jobs and American Power Act, by approving a 'Manager's Amendment' as a substitute, and ordered S. 1733 reported. Both the House-passed and the Senate-reported bills would establish cap-and-trade systems to regulate greenhouse gas (GHG) emissions, as well as address energy efficiency, renewable energy, and other energy topics. Both bills would require major reductions in GHG emissions from entities comprising roughly 85% of current U.S. GHG emissions. Covered sectors would include electricity production, natural gas distribution, petroleum refining, and specific industrial sectors. These and related bills and issues are currently being debated in Congress. For more detailed information see CRS [Congressional Research Service] Report R40896, 'Climate Change: Comparison of the Cap-and-Trade Provisions in H.R. 2454 and S. 1733'. Numerous studies have attempted to estimate the economic effects of potential climate legislation currently being considered by Congress. These studies have examined both the economy-wide effects, as well as the effects to specific sectors, such as the U.S. agriculture and forestry sectors. Some of these studies have also examined the potential market and industry effects from the proposed climate legislation, including possible resource shifts such as land use conversions and related crop production changes. Some studies further examine the potential economy-wide market effects, such as possible changes to retail food prices and supplies. This first section of this report describes results from some of the studies and discusses limitations and uncertainties associated with the economic models and their results. The second and third sections examine two particular concerns raised by the modeling results, involving (1) lands converted from agriculture to forestry, and (2) potential unequal opportunities and costs of carbon markets in various sectors of the agricultural community. The final section provides some conclusions."

Report Number:
CRS Report for Congress, R41068
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