Climate Bills and a Green Economy

U.S. Government Enticing Farmers to Trade Farmland and Pastures for Carbon Credits

April 8, 2010

Southeast Farm Press - As the United States looks to become more green, a program to trade carbon credits from farmland could play a role.

When carbon is emitted into the atmosphere, by vehicles or other means, it can be absorbed and stored by trees and other plants and may eventually wind up in the soil as organic matter.

No-till fields store carbon in the form of soil organic matter, which can be sold by farmers, providing them with an additional source of income.

"Carbon credits are currently a voluntary method used by organizations that want to offset their carbon emissions," said Lenny Farlee, Purdue University Extension forestry specialist. "But it also creates an opportunity for farmers that may have no-till fields or landowners who replant forest trees."

Carbon offset credits are sold through the Chicago Climate Exchange (CCX), which operates like a stock exchange. Offsets typically come from agriculture methane capture, no-till farming, grasslands and planting trees.

The CCX will accept a minimum of 100 tons of carbon at a time. Most landowners sell credits through an aggregator, comparable to a stock broker, who will combine multiple landowners' credits together.

"An aggregator will lump several accounts together until it reaches 100 tons or more and sell the carbon to the CCX," Farlee said. "This is really the easiest solution for farmers and landowners, because some people do not own enough land to sell 100 tons of carbon, and the aggregator can handle most of the administrative work associated with selling the credits."

For another look at the carbon market click here.

Carbon from grasslands and no-till farming is sold to the CCX at a fixed rate per acre. Carbon from trees also is sold at a fixed rate based on tree species, age of the planting and region.

"Two years ago the market for carbon offsets was $7.50 a ton, but because of the economy and uncertainty about the future structure of carbon markets it is 10 cents a ton today," Farlee said.

As the voluntary program becomes more popular, the federal government is debating whether to make reduction of carbon emissions a mandatory system.

'There have been legislative proposals in place for about a year," Farlee said. "Part of the debate is over making the carbon emissions reduction system a carbon tax or a market-based offset and reduction system or whether to have a mandatory reduction system at all."

Under a carbon tax, emitters might be charged based on emission rates above some established threshold. If an offset market system is used, those entities emitting carbon could be allowed to buy and sell carbon offset credits based on their carbon emission reductions and offset credits to meet a required total emissions target.

"Europe has installed a mandatory carbon reduction and offset system, and the price per ton of carbon offset credits has been between $20 and $35 a ton," Farlee said. "It is hard to predict what the future will bring here in the United States in terms of legislation related to reduction of greenhouse gas emissions."

Farlee advised farmers and landowners to wait until the proposal is decided on before they sell their carbon, because the market is depressed at this point.

For more information about carbon offset programs, visit Chicago Climate Exchange .

To look up average carbon offset prices, click here.

Environment Boss Wants to Put Carbon Tax on Driving, Heating and Holidays

November 15, 2009

Daily Mail - Drivers, households and holidaymakers should be hit with a carbon tax to tackle global warming, the head of the Environment Agency will say today.

Lord Smith, the former culture secretary, wants to see personal carbon allowances for individuals to cut greenhouse gases by penalising people for using too much fuel.

Every time someone used their car, took a flight or turned their central heating on, their personal allowance would go down.

If it hit zero, they would have to pay to get more carbon credits.

Lord Smith — who as Chris Smith served in Tony Blair’s first cabinet — will call for the measure to be part of an ambitious ‘Green New Deal’ to be introduced within the next 20 years.

Last night a spokesman for the Environment Agency said only those on ‘extravagant’ lifestyles would be hit. He said:

‘A lot of people who do cycling will get money back. It will probably only be bankers and those on extravagant lifestyles who would lose out.’

But critics said the ‘Orwellian’ plan would be a massive blow to British business by making it harder than competitors to travel round the world.

It could also hit poorer households who exceed their carbon budget and have to pay to buy extra credits. Families who want to take foreign holidays would be particularly affected.

Speaking at the agency’s annual conference, Lord Smith will set out the measures he believes Britain must take to reduce greenhouse gas emissions.

He will argue for increased funding for scientists and engineers to develop the technology for a low carbon economy.

But his call for personal carbon allowances has come under fire.

Economist Ruth Lea, of Arbuthnot Banking Group, said:

‘This is getting beyond a joke. This is all about the control of the individual — and you begin to wonder whether this is what the green agenda has always been about. It’s Orwellian. This will be an enormous tax on business.’

Orwellian or Green? Carbon Taxes on Individuals

At a theoretical level, individual carbon trading—variously described as personal carbon allowances, domestic tradable quotas, personal carbon rations, carbon credits—is an attractively simple idea. By giving everyone a limited allowance to cause carbon dioxide emissions, total emissions from the population can be limited. Those who need or want to emit more than their allowance have to buy allowances from those who can emit less than their allowance. - A Rough Guide to Individual Carbon Trading, Centre for Sustainable Energy, November 2006

November 15, 2009

Live Science - The Dutch government wants to tax residents for every mile they drive to cut down on carbon dioxide emissions. The new green tax would replace taxes on the sales and ownership of autos, AFP reports.

"Each vehicle will be equipped with a GPS device that tracks how many kilometers are driven and when and where," the transport ministry said in a statement. "This data will be then be sent to a collection agency that will send out the bill."

Wouldn't it be easier to just tax gas, on the assumption that one needs more of it to drive farther?

Meanwhile, the head of the Environment Agency in Britain thinks everyone should get a "carbon allowance" and be penalized if the exceed their limit, The Telegraph reports.

Everyone would get a carbon account statement, like a bank statement (electronic, not paper, we presume), and when their carbon account hits zero, they'd have to buy more credits. But that would mean calculating carbon footprints for everything people buy — a complex and costly task that puts this idea into the "we'll get it going in about 20 years" category.

And some think it's going to far in terms of tracking what individuals do:

"This is all about control of the individual and you begin to wonder whether this is what the green agenda has always been about. It's Orwellian," Ruth Lea, an economist from Arbuthnot Banking Group. "This will be an enormous tax on business."

Other efforts to apply carbon taxes to cut emissions are aimed at businesses and industry. Though the ideas has long been resisted, you might be surprised at where support for that it comes from lately. An Exxon official recently said his company wants a climate policy that creates "certainty and predictability, which is why we advocate a carbon tax."