“Uncertainty” was the word used most often in talks at the Breimyer Seminar on “Greenhouse Gas Regulations” at the University of Missouri Reynolds Alumni Center.
Ray Massey, University of Missouri Extension economist, said capture and sequestering of carbon could provide farmers with added revenue. Or it could complicate and change farming practices. Both potentials now exist, he told an audience interested in agricultural policy and legislation affecting farming.
Seth Meyer, analyst with the University of Missouri Food and Agricultural Policy Research Institute, used the newly updated FAPRI biofuels addition to its model for projecting the annual agricultural baseline.
Uncertainty about the renewal of tax credits for blenders of biodiesel adds volatility to biofuel markets, Meyer said. Blenders, who mix biofuels with petroleum products going to the fuel pumps, now receive a 45 cents per gallon credit on ethanol. A $1 per gallon tax credit for mixing biodiesel to petroleum diesel expired last Dec. 31. The credit for ethanol is set to expire in December of this year.
Pat Westhoff, co-director of University of Missouri FAPRI, reported on progress in passing a climate change bill, popularly known as cap-and-trade. Before going to the podium, he checked his cell phone for the latest news, as plans for Senate debate were changing as he spoke.
A version of the climate bill passed the House earlier. The Senate is considering a variation filed by Sens. John Kerry and Joe Lieberman.
Both bills would increase energy costs to farmers. But both would also allow farmers to earn money if they change farming practices to reduce greenhouse gas emissions or sequester carbon in the soil, Westhoff said.
For example, costs of natural gas could go up as much as 40 percent, which would raise the cost of fertilizer. “This introduces uncertainties for corn farmers,” Westhoff said.
Likewise, uncertainty exists on potential incentives for planting trees that could draw crop acres into forestry. One estimate is for 59 million added acres of planted trees by 2050.
Source: University of Missouri