Cap-and-Trade Reforms – Climate Change Cure?

Secretary of Agriculture Tom Vilsack advocates the passage of proposed cap-and-trade legislation with Congress to combat the divisive issue of climate change.

Climate change, or global warming, refers to the variation of modern climate patterns and is said to be the result of natural geographic forces and human outputs on the environment. Such human outputs include land use, deforestation, animal agriculture and carbon discharges.

Vilsack is confident in the reality of global warming and has referenced fisheries in Alaska and forestry in Colorado as examples of its destructive effects.

The Obama administration is promoting the establishment of a revised domestic cap-and-trade system aimed to reduce energy emissions. Vilsack testified to the House Appropriations Subcommittee on Agriculture in March, outlining the administration’s goals to decrease emissions 20 percent by 2020 and 80 percent by 2050.

Legislation details can be located at

USDA believes that the agriculture and forestry sectors hold the potential to deliver substantial emissions reductions, including carbon sequestration, under a national climate change policy,” said Vilsack.

Many farmers oppose the legislation because they either don’t believe in global warming or consider the cap-and-trade system to be a financial burden, or both. Vilsack is aware of the apprehension many in the industry are experiencing, but is confident that the potential reforms “will likely outweigh the costs” and will actually bolster the national farm community.

"Over the long haul, it is potentially tens of billions of dollars of net income opportunity for farmers," Vilsack said.

Some agriculturalists are leery of prospective increased energy costs and increased input (fertilizers, pesticides, chemicals) costs. Georgia Congressman Jack Kingston has publicly declared his opposition.

“Agriculture is inherently an energy-intensive industry and this bill does nothing to mitigate that fact. From tractor fuel to fertilizer to livestock feed, farmers across America are especially vulnerable to this proposed national energy tax. Our farmers are already struggling with the high cost of fertilizer and feed and gas prices are going up. Now, in this time of economic downturn, is not the time to further drive up the cost of farming and the cost of food. American farmers can’t afford it and neither can American families.”

Vilsack has countered with this example:

“A Northern Plains wheat producer, for example, might see an increase of 80 cents per acre in costs of production by 2020 because of higher fuel prices. Based on a soil carbon sequestration rate of 0.4 tons per acre and a carbon price of $16 per ton, a producer could mitigate those expenses by adopting no-till practices and earn $6.40 per acre. So, this wheat farmer does better under the House-passed climate legislation than without it. And, it's quite possible that this wheat farmer could do even better if technologies and markets progress in such a way that allows for the sale of wheat straw to make cellulosic ethanol.”

Vilsack says the government will aid agriculturalists by assisting them in adopting new technology use and conservation practices.

“Well you know farmers, I know farmers. There's no question that they are going to be looking for alternatives. They are going to be looking for technology changes, for renewable energy sources, for biofuels, all of which could potentially benefit them in terms of lower costs," said Vilsack.

Judging from his experience with the 17 stops completed in the Rural Farm Tour, Vilsack told ag broadcasters he believes the cap-and-trade legislation should pass through Congress without resistance.

Should other industries be targeted for inclusion in cap-and-trade regulations? Are farmers being treated unfairly? Should the agriculture sector try to amend proposed legislation?

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