Agriculture has a potential role to play in the removal of
carbon dioxide from the atmosphere. Land managers can change
production practices or land uses to increase the carbon stored in
soil or vegetation. Land managers can use other changes in
production practices and land uses to reduce emissions of methane
and nitrous oxide. In addition, agriculture can produce biofuels,
which can substitute for fossil fuels and thereby potentially
reduce greenhouse gas emissions. All of these actions are
considered forms of mitigation.
Research underway at ERS will assess the costs of these options.
This information can then show the potential role for these options
in any U.S. efforts to offset or reduce greenhouse gas emissions.
Agricultural landowners may have the option to participate in
greenhouse gas markets, which may be established by Federal or
State policies or by private groups. Economic research can assess
the likely extent of participation in those markets and the amount
of greenhouse gas reductions that might be expected at different
market prices and can show how the economic opportunities from
participation might be distributed across commodities and
regions.
The above figure illustrates the potential increase in carbon
sequestration under a hypothetical example in which farm-level use
of mitigating practices increases by 50 percent. Research underway
at ERS will estimate the actual adoption rates that might occur at
any given carbon price, beyond this across-the-board scenario.
Economic research can further show how farmer participation, costs
and benefits would be affected by different policy approaches.
Several of the activities that count as mitigation have
additional environmental benefits, such as providing wildlife
habitat or reducing nonpoint water pollution. ERS conducts research
on the economic value of these benefits. This value may complement
the value of carbon markets. An ERS report (see The Use of Markets To
Increase Private Investment in Environmental Stewardship,
ERR-64, September 2008) examined the environmental services farmers
could provide, identified impediments to market formation, and
explored potential roles for government action. Case studies
examined in the report include carbon markets, as well as water
quality trading, wetland restoration, and recreation on
Conservation Reserve Program lands.
Carbon Sequestration
Agriculture and forestry play significant roles in reducing
atmospheric greenhouse gas concentrations through carbon storage in
soils and vegetation. Several recent studies indicate that farm,
ranch, and forest lands could increase sequestration by adjusting
land uses and production systems. A large proportion of this
additional sequestration is believed to be achievable at lower cost
than emissions reductions from other sectors.
On the other hand, some land use and management changes can
cause stored carbon to be released. Furthermore, land-use changes
are linked across time and space through market effects. This
linkage means that a wide range of changes in stored carbon must be
accounted for in determining the effects of carbon policies. ERS is
using its knowledge about land markets, commodity markets and
market interactions, including possible international market
effects, to provide critical information on these issues.
For more information, see The
Use of Markets To Increase Private Investment in Environmental
Stewardship (April 2008),
Economics of Sequestering Carbon in the U.S. Agricultural
Sector (April 2004), and the
Amber Waves summary article.
Bioenergy
Bioenergy refers both to biofuels, which are transportation or
heating fuels such as ethanol and biodiesel that are derived from
plant matter, and to raw plant biomass used to generate
electricity. Bioenergy may play a role in addressing climate change
because it can, in some circumstances, substitute for other energy
sources such as gasoline or coal that are sources of carbon dioxide
emissions.
Federal and State laws and volatile energy prices have created a
domestic market for the crops from which bioenergy is derived. The
Energy Independence and Security Act of 2007
requires that the U.S. use 11.1
billion gallons of renewable fuels in 2009. This mandate increases
to 36 billion gallons by 2022. Roughly half of the States have laws
requiring a portion of the State's electricity to be generated from
renewable sources, some of which will be plant-based sources.
Mandates for renewable electricity are also being discussed at the
Federal level.
The demand for bioenergy has implications for U.S. and world
agricultural markets. ERS provides analysis of these market
effects. The production of biomass may affect soil carbon storage,
either positively or negatively, according to the same pathways
described for carbon sequestration. ERS provides analysis of where
and how bioenergy and related crops are grown, which helps
researchers determine their effects on the carbon balance.
ERS is approaching bioenergy issues in several ways (see the ERS
Bioenergy topic
page):
- Monitoring the state of the agricultural system and rural
communities
- Providing market analyses
- Developing projections of commodity supply, demand, and retail
food prices
- Conducting indepth research on policy-relevant topics
For more information, see
Increasing Feedstock Production for Biofuels: Economic Drivers,
Environmental Implications, and the Role of Research
, released by the interagency Biomass Research and Development
Board. The report presents an economic assessment of feedstock
production from agriculture and forestry sources and analyzes the
likely greenhouse gas implications of various policy and economic
scenarios. It concludes that farm-sector greenhouse gas emissions
of increasing corn ethanol production from 12 to 15 billion gallons
a year are likely to be modest. It also shows that a 50 percent
increase in corn productivity can reduce greenhouse gas emissions
associated with increasing biofuel production by 7.7 million metric
tons (CO2 equivalent). This latter finding shows how
increased commodity productivity acts as a kind of greenhouse gas
mitigation strategy. Many uncertainties remain in this analysis,
especially the possible indirect land use changes resulting from
biofuel policy.
Energy Conservation and Efficiency
Agricultural producers, like other producers in the economy, use
fossil fuels as part of the production process. Farmers can
undertake energy conservation and efficiency improvements to reduce
their use of these fuels. They can improve their operations' energy
efficiency by installing new technology, purchasing new machinery,
or using different production methods that can decrease fuel
use.
Farms can reduce emissions from machinery by switching to
alternative fuels like ethanol, biodiesel, or natural gas that emit
fewer greenhouse gases.
The Rural Energy for America Program provides funds
to agricultural producers and rural small businesses to purchase
and install renewable energy systems and make energy efficiency
improvements.
Non-Carbon Dioxide Emissions: Soil Management, Manure
Management, and Enteric Fermentation
Livestock production and the application of fertilizer to fields
contribute to non-carbon greenhouse gas emissions. Belching,
primarily from cattle and sheep, formally known as enteric
fermentation, emits methane, a powerful greenhouse gas. Animal
waste, from all species, also releases methane unless steps are
taken to "capture" this gas. The application of synthetic
fertilizers and other agricultural soil management practices emits
nitrous oxide, another greenhouse gas.
Agricultural producers can reduce methane and nitrous oxide
emissions through changes in production practices. Changes in
livestock feed have been found to reduce the amount of methane
produced in the animals' digestive systems. Changes in the timing
and method of fertilizer application can reduce nitrous oxide
emissions. The use of anaerobic methane digesters on dairy and hog
farms captures methane produced during manure storage so that it is
not released to the atmosphere. Producers can use the captured
methane to generate electricity for use on the farm or for sale to
electric utilities, where feasible, which reduces reliance on
fossil fuels and provides an additional source of income.
Federal policy can provide incentives to farm operations to
adopt practices that reduce these non-carbon greenhouse gas
emissions. However, in some cases, producers may face tradeoffs
between reduced greenhouse gas emissions and improved water quality
when making decisions about manure and nutrient management. For
example, open lagoons and other liquid containment facilities store
manure that might otherwise contaminate water bodies, but in doing
so create conditions for manure decomposition that releases
methane. Further actions can be taken by producers to capture the
methane gas emissions generated by manure decomposition.
For more information, see
Managing Manure To Improve Air and Water Quality (September
2005) and "No-Till"
Farming Is a Growing Practice (November 2010).
See also the ERS topic on Chemical Inputs.
Policy Design
Federal policy can play an important role in determining
greenhouse gas emissions from agriculture and in providing
incentives for landowners to reduce emissions through various
mitigation activities. Numerous Congressional, Administration and
stakeholder proposals call for a nationwide greenhouse gas
cap-and-trade system that would allow farmers to obtain and sell
credits for carbon storage and other greenhouse-gas mitigation
activities, also called offsets. For example, up to 1 billion tons
of offsets from domestic activities including from agriculture
would be allowed under the Waxman-Markey American Clean Energy and
Security Act (H.R. 2454) passed by the House of Representatives
June 26, 2009. The exact format that these offset credits would
take, should this bill become law, has yet to be determined. An
alternative approach, following the model of existing conservation
programs, would be for government programs to reward landowners
directly for undertaking emission-reducing or offsetting
activities.
The design of these programs will play an important role in the
level and type of participation, and thus in the cost of reducing
greenhouse emissions from agriculture and from regulated
sectors.
Multiple ERS research reports (see below) have shown the
importance of policy design in achieving environmental benefits
from USDA's conservation programs in a cost-effective manner.
Because many of the practices supported by those programs sequester
carbon as well as providing other environmental benefits targeted
by the current programs, insights from that research provide a
strong foundation and "lessons learned" for considering the
potential implications of alternative approaches to greenhouse gas
mitigation policy design.
The manner in which climate policies and conservation programs
interact may have important implications for both. For example, the
Conservation Reserve Program (CRP) retires environmentally
sensitive cropland from production and pays farmers to plant
conservation cover under 10- to 15-year contracts. Current CRP
enrollment by average cost and vegetation type is shown below.
The CRP does not currently preclude participants from also
receiving payments for sequestering carbon. Therefore, a national
cap-and-trade system for greenhouse gases that includes credits for
agriculture could make participation in both a carbon market and
the CRP more attractive. On the other hand, if "stacking" of
credits is not allowed, carbon markets and conservation programs
may compete for the same land. Thus, coordination between
conservation programs and carbon markets is an important policy
consideration.
For more information, see The
Use Of Markets To Increase Private Investment in Environmental
Stewardship (September 2008).
Other related ERS reports include: