CASNR Research: Agriculture carbon benefit may be indirect
Though carbon trading likely will not help farmers’ bottom lines significantly, agriculture may benefit indirectly from carbon regulation through the value added by biofuels. Large corporations such as Wal-Mart and General Electric could take advantage of cap and trade policies to improve their carbon footprints.
Many farmers may have carbon credits for sale, including some based on current production practices such as reduced tillage, though green energy may be our best option to take advantage of those potential credits, said Michael Farmer, an associate professor with Texas Tech’s Department of Agricultural and Applied Economics.
Producers can “only play in one market. If you sell biofuels, you can’t sell carbon credits yet if a product is sold as a commodity, the product is eligible for the offset market,” he said.
Producers would likely make their decisions based upon life cycle accounting and close evaluation of each set of practices to judge their effect on carbon sequestration. Some practices could hamper yield, but reduced tillage may be a good bet, he said.
A market will exist for the direct sale of carbon credits, though their value may be limited, Farmer added. Bioenergy is a more reasonable option, especially if the energy avoids indirect land-uses.
Indirect land use, for example, accounts for things such as forests in South America being cleared to replace corn for feed being diverted to ethanol production in the United States. Practices such as this make carbon accounting difficult and unstable for the producer, he said.
This being said, cotton growers or cotton gins could use gin trash as a bioenergy fuel, and there are several ways to do it. “For instance, we can burn gin trash to produce electricity and sell at peak contract prices,” Farmer said. “It’s reasonable to use half the gin trash biomass for fuel and the rest for feed etc. There would be no indirect land use effects and the carbon accounts could be quite attractive.”
Reporting by Southwest Farm Press
CONTACT: Michael Farmer, Associate Professor, Department of Agricultural and Applied Economics, Texas Tech University at (806) 742-2821 or firstname.lastname@example.org
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