By Matt Cover
The Department of Agriculture (USDA) announced that it has awarded $17.4 million for pilot projects that will begin exploring how to establish a market for greenhouse gas (GHG) credits, a key component of a cap and trade system, to help reduce carbon and other emissions that apparently contribute to global warming.
Agriculture Secretary Tom Vilsack said the projects were the “foundational work” for establishing an American carbon market.
“This is really sort of foundational work that’s being done,” Vilsack told reporters on a conference call on Wednesday.
The $17.4 million in funding is part of the Conservation Innovation Grant (CIG) program, which is supposed to foster innovation in environmental conservation technology and business. In this case, the administration has received special funding to provide CIG grants for projects that demonstrate methods for establishing a GHG-offset markets in agriculture.
Greenhouse gas offsets, often called carbon credits, are a key component of a cap and trade system – the ‘trade’ part of the system in fact. Under cap and trade, businesses with GHG offsets can sell them to other businesses that need the offsets to stay under the emissions cap – the legal limit on carbon-dioxide and other GHG emissions.
(Under cap and trade, in general, companies that exceed their “cap” on greenhouse gas emissions can “trade” (buy) credits as compensation, the money for which is applied to more environmentally friendly industries; you pollute, you pay, and the money goes to green companies.)
GHG offsets can theoretically come from anything that reduces the amount of carbon dioxide or other greenhouse gasses in the air, from a pledge to keep rural land undeveloped to planting trees to changing how farms handle animal waste or fertilizer.
“We want to help farmers and ranchers make important and innovative contributions to reducing greenhouse gas emissions,” Vilsack said. “These grants are designed to test and verify exciting new approaches to greenhouse gas reduction that other conservation-minded producers will want to put to work on their operations.”
In other words, the CIG grants fund projects that attempt to measure the quantity of GHGs that are saved – by not farming rural land, for example – and how those savings affect the value of the offsets – how many GHG credits a particular action is worth.
In a cap and trade system, farmers, ranchers, and other agriculture producers theoretically stand to make money by selling credits to other, GHG-intense businesses such as manufacturers and power companies.
Among the projects being funded is a $1 million program across eight states to show that beef and dairy farmers can be incentivized to change how they handle animal feeding and manure to produce less methane emissions.
Another $1.2 million grant given to an Indian tribe in Washington State will examine how to value and trade GHG offsets for planting trees, improved forest management, and not developing forested lands in tribal areas.
Each of the nine projects funded under the special CIG grants – totaling $7.4 million – aim to develop ways to integrate conservation and agriculture reforms into a GHG offset market, the type of market that would be critical to a functioning cap and trade system.
The USDA will also disburse an additional $10 million through its Environmental Quality Incentives Program (EQIP) grant program to aid these efforts.
Vilsack said the reason the Agriculture Department was getting involved in the establishment of carbon markets, which currently exist only in states like California and the Northeast, was to better integrate the federal government into regional cap and trade systems, so that the government has a better understanding of how GHG offset markets function.
“[W]e’re hopeful that this would create opportunities for better collaboration for ourselves at USDA and the various states that are themselves establishing markets and that this would assist us in building the capacity within USDA to understand how these markets work and how we might be able to do more of this in the future,” said Vilsack.
Link:
http://cnsnews.com/news/article/ag-dept-distributes-174-million-grants-e
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