Panel IV has been discussing the role of ecosystem services in our approach to land and farm policy. Panelist Baron Thompson discussed the wide-randing opportunities and challenges from reframing environmental issues in terms of ecosystem services, and JB Ruhl, while not present at the panel discussion (due to a canceled flight) is presenting a symposium paper on agricultural ecosystem services.

Discussion of ecosystems services brings to the fore the important issue of what role we can expect from the agricultural industry in domestic climate change policy. In the US, agriculture is responsible for approximately 7% of GHG emissions, mostly in the form of methane and nitrous oxide emissions. However, agriculture also has the potential to biologically sequester carbon (and thus reduce atmospheric carbon dioxide) through the adoption of certain farming practices such as reduced tilling. Biological greenhouse gas sequestration is a perfect example of an ecosystem service, and, as professor Thompson pointed out, it is currently one of the only ecosystem services that actually has any money behind it.

Despite agriculture’s non-trivial contribution to GHG emissions, it is highly unlikely to expect U.S. legislation to directly limit agricultural emissions. So far, only New Zealand has planned to include agriculture “within” its cap-and-trade system (which probably has something to do with New Zealand being the only OECD country without a vast system of agricultural subsidies). We will likely see, however, assisted voluntary participation in U.S. climate change policy through the sale of “offset credits” to entities directly capped in their emissions (for example, the current version of the Lieberman-Warner bill — the only bill to have already been passed by the Senate Environment & Public Works Committee — will allow for up to 15% of capped entity emissions reductions to be achieved through the purchase of agricultural offsets). Typically, such an offset system within a larger cap-and-trade program allows for the capped industries to purchase a certain amount of offset credits from individual farms that have adopted practices or technologies that will decrease direct GHG emissions or increase the amount of GHG sequestered.

In such a system, while the agricultural industry will not be forced to reduce their GHG emissions or increase their carbon sequestration, they will be incentivized to do so. If the price that the buyers are willing to pay for the offset credits are more than the cost to farmers for adopting the new practices or technologies required to reduce emissions or increase sequestration, then farmers will adopt these new practices and technologies voluntarily in order to reap the financial benefits from selling offset units. It remains to be seen if such a program will be a useful contributor to domestic greenhouse gas emissions reductions.

This entry was posted on Friday, March 28th, 2008 at 5:31 pm and is filed under Agriculture, Climate Change, Land Use. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.