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The Trouble With Farm Offsets

Earlier this week, the Senate Environment and Public Works Committee continued its work on a climate bill by holding a hearing on the potential effects of a carbon cap on agriculture. Democrats stressed the "economic opportunities" for farmers via the carbon offsets under a cap-and-trade system for greenhouse gases. Republicans, meanwhile, complained that any money farmers might make from offsets would do little to defray the higher costs that agribusinesses would face if Congress put a price on carbon. Surprisingly, neither side dwelled on the fact that the farm offsets in the House climate bill might actually create a significant loophole for polluters.

The Environmental Working Group recently analyzed the House climate bill and noted that the legislation allows farmers to earn credits under the cap-and-trade regime for practices such as low or no-till farming even if they've been going on since 2001. In other words, the offsets wouldn't always necessarily go toward new reductions. EWG estimated that, under this system, utilities could get a free pass for anywhere between 87 and 148 million metric tons of pollution each year. That could, in theory, weaken the bill's already modest 2020 greenhouse-gas reduction targets by 8 to 13 percent.

The second, equally worrisome provision involves something called "term offset credits," and refers to agricultural practices that sequester carbon in the ground. The problem here is that, as it stands, the House bill only requires the practices to be maintained for five years, after which farmers are free to abandon the project (and, in effect, release the sequestered carbon back in the atmosphere). To make matters worse, farmers could then apply for more carbon offsets and repeat the process over again.

In theory, carbon offsets for agriculture and forestry could provide a cost-effective means for utilities and other industrial polluters to reduce emissions in the near term while they scramble for ways to do so directly. In practice, however, the offsets are becoming a dumping ground for favors to agribusiness. And with the head of the Senate Agriculture Committee, Tom Harkin, recently saying that the House bill wasn't lenient enough toward farmers, it's not clear that there's much willingness to fix the problem.