Numbers vary on land use change as a result of climate legislation

Sep 4, 2009

Numbers vary on land use change as a result of climate legislation

Some agricultural opponents of climate change legislation argue the U.S. could lose significant crop acres to forestry, but others worry about cleaner energy demanding more cropland to grow biofuels and renewable electricity.

One of the key battles on climate legislation right now is just how much land shifting would occur. Groups with opposing policy agendas are making different claims about how climate policies will affect crop acres in the U.S. The Nature Conservancy released a report last week stating that climate policies will lead to more land being used for biofuels, wind energy, solar panels and other renewable resources. The Nature Conservancy expressed reservations about the impact of those developments on wildlife habitat, calling it “energy sprawl.”

“Within the United States, much energy crop production will occur on grassland or forest sites already in use for agricultural production, although increased aggregate demand for agricultural commodities may still spur agricultural expansion domestically or internationally,” the Nature Conservancy wrote.

The Nature Conservancy also noted that the U.S. Department of Energy projects 20 percent of electric power from wind energy by 2030, further expanding the amount of land needed for wind development.

Demand for renewable energy will increase to help with energy independence and to reduce greenhouse gas emissions. A climate bill that passed the House in June would reduce greenhouse gas emissions 83 percent by 2050 using a capand-trade program that would give offsets for carbon and other greenhouse gases’ value. While biofuels will be in demand, others see land owners benefitting more by converting farmland to forests, taking advantage of more carbon credits, especially if the price for those carbon offsets soar. The American Farm Bureau Federation suggested a possible 40-million-acre loss in cropland converted to forestry, but has not completed its analysis of the climate legislation despite testifying in July that such an acreage shift would occur. Secretary of Agriculture Tom Vilsack suggested most land that will convert to forestry will be marginal ground, possibly Conservation Reserve Program (CRP) acres.

Since 1980, the only government policy to cause a dramatic crop acreage shift was the introduction of the CRP in the 1985 farm bill, Ruben Lubowski, a senior economist with the Environmental Defense Fund, said last week at a conference in St. Louis. Crop acres in 1984 hit 358.2 million acres, but the CRP idled 32 million acres and annual planted acreage has not been higher than 328.6 million acres in any year since 2000. “The only government program to reduce crop acres was CRP, which created a direct payment for idling land,” Lubowski said. Since 1940, most dramatic acreage shifts in the U.S. have come from government policies to set aside acres because of commodity price collapses, Lubowski said. Professor Bruce McCarl, a climate-change expert at Texas A&M University, showed data earlier last week that modeled potential acreage shifts in the U.S. under climate legislation.

McCarl forecasts 27.1 million acres would convert from cropland to forestry, but another 7.5 million acres would swing the other direction, converting from forestry to crops. McCarl’s model also shows 15.8 million acres switching from pasture to crops. Overall, it shows a net acreage loss of cropland of about 3.8 million acres in the U.S.

Some have complained that not every farmer would benefit under cap-and-trade legislation because not every producer would gain from offset sales. McCarl said crop producers in places such as Texas benefit from higher prices due to ethanol production even though Texas has not developed an ethanol industry.

Corn diverted to ethanol has increased corn prices everywhere as well as increased prices for other crops competing for corn acres.

“What I see in this thing is two sets of benefits, a set of benefits from higher prices and a set of benefits from offset sales,” McCarl said.

“And the higher prices in a lot of areas of the country are substantially more in benefits than the offsets.”

With a higher Renewable Fuels Standard and the climate bill being implemented, McCarl forecasts corn prices will remain substantially higher than if no climate legislation is enacted.

McCarl said producers have the potential to see some strong price benefits with possible land-use changes. “We factor in all of that, factor in the benefits that ag might get selling hog manure and lagoon offsets, things like that. We factor in the payments from afforestation, etc., and we see substantial benefits due to the prices and offsets selling con tinuities compared to the current situation,” McCarl said. In a report released two weeks ago, the Agricultural Marketing Resource Center (AgMRC) at Iowa State University analyzed USDA’s study on the impacts of climate legislation. Don Hofstrand, co-director of Ag- MRC, stated that USDA’s forecast of a possible 7 percent drop in net farm income by 2050 because of climate controls doesn’t factor in long-term gains in productivity and energy efficiency.

Hofstrand noted that since 1973, “farm output has grown by 63 percent while energy consumption has declined 26 percent.” — Chris Clayton, DTN

“What I see in this thing is two sets of benefits, a set of benefits from higher prices and a set of benefits from offset sales.”