Policy Documents

No. 102 - Greenhouse Gas Control: Implications for Agriculture

Joseph L. Bast, Dennis Avery, Alex Avery, James L. Johnston, John Skorburg, and Terry Francl –
August 25, 2003

Legislation is being considered at the federal and state levels that would control greenhouse gas emissions thought to be the cause of “global warming.” Laws mandating emission reductions are very expensive, cause slower economic growth, and would have little effect on the global climate. By increasing energy costs, such programs would reduce net income for the typical farmer by between 26 and 51 percent. An alternative to reducing emissions is to pay farmers and foresters to increase the amount of carbon stored in their soil and trees. However, farmers emit 35 times as much greenhouse gas as their soil sequesters each year, making it likely that most farmers would pay more for emission permits than they would earn by selling credits. Biological carbon sequestration programs would also cause higher energy prices and new regulations. Emissions trading is unlikely to work given the ubiquitous nature of carbon dioxide, and would be a risky endeavor for farmers and investors.