However, Farm Bureau says law would have $5 billion negative impact
Colorado’s farmers and ranchers could see “greener” pastures as a result of the climate change legislation that passed the House of Representatives last week.
Some environmental groups are claiming that farmers can cash in on the green movement by changing practices and leasing unused land.
The bill proposes to reduce carbon emissions to 17 percent below 2005 levels by 2020 and 83 percent below 2005 levels by 2050 though cap and trade policy.
“Colorado agriculture can generate ‘offsets’ — verified and durable emission reductions in greenhouse gasses — that can be sold to emitters,” said a report from the Environmental Defense Fund, urging farmers in Colorado to support the legislation. “A well-designed offset program can … generate economic growth in rural agricultural areas.”
Agriculture can benefit from climate change policy in more ways than by simply “selling” unused carbon credits. The report claims that farmers and ranchers can lease the 30 million agriculture acres in the state for solar panel or wind farm use.
“Landmark state policies for renewable energy have brought vibrant new economic opportunity to rural Colorado,” according to the report. “Colorado has cleared the way for rural agricultural communities to gain economic benefits while working to protect our scarce water resources from a changing climate.”
Not so fast, say the nation’s farmers.
The American Farm Bureau opposes the bill and is urging its members to notify legislators of that opposition.
The bill “will unquestionably impose enormous costs on the American economy, including agriculture,” said bureau president Bob Stallman in a letter sent to the House of Representatives.
Bureau analysis of the bill shows that farmers will face a $5 billion yearly impact for the next 10 years, and that’s under the “most optimistic set of assumptions.”
“Those estimates do not begin to tell the story of what will happen when the program mandated by the legislation fully takes hold,” Stallman wrote.
The bureau is concerned because the bill “results in a net economic cost to farmers with little or no environmental benefit,” the letter said. “In addition, it creates an ‘energy deficit’ for the United States by curtailing the use of fossil fuels without supplying any realistic alternative to make up the lost energy.”
Colorado’s agriculture contributes about 10 percent to greenhouse emissions in the state. While not regulated in the new bill, reductions in agricultural sources can be a potential opportunity for offset credits.
The Western Business Roundtable has taken no official stance on the legislation, said Jim Sims, executive director.
“Ranchers in Colorado have an inherent mistrust of the government implementing the program,” he said. “They believe the cost of regulation is going to be too high. Farmers trust the American Farm Bureau’s analysis of the bill — not the environmental groups.”
The belief that renewables — like wind farms and solar panels — can earn money leaves out an important fact, he said.
“Most people support putting the wind farms on cattle ranches,” he said. “But then you have to put transmission lines in place, those lines go through neighboring properties. People don’t want the transmission lines on their property, and that’s where wind farms face trouble.”
Cap and trade systems are going to be prohibitively expensive, he said.
“Those who say that imposing cap and trade systems with no net cost increases are just whistling ‘Dixie,’” he said. “We have a carbon-based economy. And that means that if you place an artificial tax on carbon, you are going to raise the cost of almost everything in society.”
Creating a carbon tax will raise the cost of energy, and raising energy costs will increase the costs for everything else.
“I think there’s a point to be made that raising the cost of living during a recession is very risky policy,” Sims said. “That’s the worst combination possible.”
Sims also argues that business is doing what it needs to curtail carbon emissions on its own. He points to Colorado’s three largest utilities — Xcel, Black Hills and Tri-State. There are no federal carbon regulations in place — and all three have moved forward to reduce carbon emissions.
“It already makes good business sense to reduce emissions and we’re already on that path,” he said. “I would argue that businesses received the signal to reduce carbon intensity — and they’ve already responded.”