By Lorraine Woellert and Alan Bjerga. 26/03/09 . Bloomberg
Chicago farmers practising no-till can get carbon credits that they can sell on the Chicago Climate Exchange. One farmer, Woollen gets about $3,000 a year from the climate exchange’s carbon-trading pilot program. While it isn’t much, to Woollen it hints at bigger potential profit as Congress considers mandatory, nationwide greenhouse-gas limits.
President Barack Obama and Democratic leaders in Congress back a “cap-and-trade” system to ease global warming by making companies obtain government-issued pollution permits. As allowable emissions drop over time, companies would have to reduce pollution or buy extra allowances. Businesses adopting clean-energy methods like wind or solar power could sell permits for a profit.
Some farm-state lawmakers and agriculture groups want to let farmers like Woollen create a separate source of carbon allowances. Farmers who use eco-friendly farming techniques or plant trees would earn so-called offsets to sell alongside government permits on carbon markets.
In ideal circumstances, farms have the potential to capture one-third of the carbon pollution now produced by the U.S., said Rattan Lal, director of Ohio State University’s Carbon Management and Sequestration Center. Obama has said that by 2050 he wants to cut emissions by 80 percent from 1990 levels.
Agriculture Secretary Tom Vilsack has called carbon “a new income source” that could “change the old ways of supporting farms.”
At this point, Climate Exchange Plc’s Chicago Climate Exchange runs a pilot program that lets farmers supply credits for sale to companies, such as Ford Motor Co. and American Electric Power Co., which have agreed to voluntary emissions limits. Its sibling Chicago Climate Futures Exchange last November began trading futures that can be used if a mandatory cap-and-trade law is enacted.
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