Climate Change Legislation

NCBA Staff Contact: 

Tamara Thies, Chief Environmental Counsel
202-347-0228

tthies@beef.org

Scientific studies show that greenhouse gases (GHGs) such as carbon dioxide, methane and nitrous oxide are increasing in the Earth’s atmosphere every year.  Many scientists from around the world believe this buildup is caused largely by man, is leading to global warming, and that countries must take action now to reverse the buildup.  Other scientists believe that global warming is caused by natural phenomena and cannot be reversed by regulatory action.  Regardless of which scientists are correct, however, Congress is giving every indication that it will move forward to adopt legislation to reduce greenhouse gas emissions.  Legislative action to create an economy-wide emissions trading (cap-and-trade) system to cut greenhouse gas emissions is supported by a broad array of U.S. businesses including Alcoa, BP America, Caterpillar, Duke Energy, DuPont, General Electric, General Motors, Ford Motor Company, Chrysler, ConocoPhillips, Johnson’s, PepsiCo, Dow, Xerox, and John Deere.  If legislation passes, it is likely that all sectors of the U.S economy will be affected, including agriculture.

On December 5, 2007, the Senate Environment and Public Works Committee passed the Lieberman-Warner Climate Security Act of 2007, a bill that would establish a nationwide cap on most greenhouse gas emissions with the objective of reducing them to 15% below 2005 levels by the year 2020, and to 70% below 2005 levels by the year 2050.  To achieve these goals, the bill would create an economy-wide emissions trading system similar to the one adopted by the European Union.  The bill is headed to the Senate floor for consideration during the early part of 2008.  Passage of the bill in its current form is unlikely since environmental and industry groups will work for changes.  Moreover, it is unclear that President Bush would sign any measure that mandates emission reductions.

Under the Lieberman-Warner bill, the economy-wide cap would commence in 2012 and would limit emissions from “covered facilities” (i.e. electric utility, transportation, and manufacturing industries that emit GHGs from sources such as coal, petroleum fuel, and natural gas) in that year to 2005 levels.  Each year thereafter, the cap would be lowered by about 1.8% to reach the 70% reduction target by 2050.  Covered facilities would be allocated emission allowances by the EPA.  An emission allowance represents an authorization to emit one CO2 equivalent of a GHG during the year.  Covered facilities may buy additional allowances or sell surplus allowances generated from reducing their emissions.  In the early years, a majority (72% in 2012) of allowances would be distributed free to covered facilities; the rest would be auctioned off.  Over the life of the program, the percent to be auctioned would gradually increase to a peak of 70.5% from 2031-2050.  Different percentages of the allowances would go directly to the industrial sectors covered by the program. 

Other sectors would also be given allowances, including agriculture.  Specifically, the EPA would allocate to the Secretary of Agriculture 5% of the Emission Allowance Account every year for use in achieving reductions in GHG emissions, and for achieving increases in GHG sequestration.  Significantly, 0.5% of the allowance must be distributed to agriculture entities for achieving real reductions in nitrous oxide emissions and methane emissions.

The bill also establishes a formal carbon sequestration program which could provide significant financial benefits to agriculture operations in any carbon credit trading program.  Carbon sequestration is the process of taking carbon out of the atmosphere and storing it in natural “sinks” on the Earth.  While research is being conducted to finds new ways to increase carbon storage in soils, it is currently known that carbon sequestration can be accomplished by a number of means including:  no-till or reduced till systems, increased crop rotation intensity by eliminating summer fallow, buffer strips, conservation measures to reduce soil erosion, using higher residue crops such as corn sorghum and wheat, using cover crops, improving forage quality on grazing lands, regular use of prescribed burning to increase forage productivity, and reduced overgrazing.  It is estimated that producers who implement one or more of these practices would be able to sell carbon credits to utilities and other industrial concerns for an estimated $2 per acre per year on the open market.  This type of trading system is currently in its infancy, so there is no way to know how much money producers would receive in the future from this program.

Some media attention on the issue of global warming has pointed the finger at livestock operations for contributing to GHG emissions.  Last November, the United Nation’s Food and Agriculture Organization released a report titled “Livestock’s Long Shadow” – Environmental Issues and Options” which claimed that on a worldwide level, cattle-rearing generated more GHGs than did the transportation sector.  However, data from the U.S. EPA and other sources indicate U.S. livestock grazing, feeding, and manure management systems are superior to those elsewhere in the world.

In EPA’s April 15, 2007 report, “Inventory of Greenhouse Gas Emissions and Sinks:  1990-2005,” the EPA does not even list livestock as a concern in the United States with regard to CO2 emissions.  The report shows that by far the largest emitter of methane gas is solid waste landfills which account for 24% of all methane emissions.  Methane emissions from enteric fermentation in livestock, on the other hand, do not exceed .05 percent of total GHG emissions, and have DECLINED by 3 percent from 1990-2005 due to the decreasing population of beef cattle and improvements in feed quality.  A study by the Pew Commission states that “feed quality and digestibility are already at a relatively high level [for beef cattle] and further improvements from conventional changes in feed rations are likely to be modest.”  Nitrous oxide is emitted from fertilizers, including manure.  The EPA’s report cited above, however, partially attributes a beneficial increase in mineral soil carbon sequestration to an increase in the amounts of organic fertilizers (manure and sewage sludge) applied to agricultural lands.  Therefore, the use of organic fertilizers on cropland helps to increase offsets of GHG emissions.