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Local farmers may be able to bring in some egg money because of global warming concerns.
The Pennsylvania Farm Bureau and Global Emissions Exchange are introducing Franklin County farmers to carbon credit trading. A farmer can earn $2 to $7 per year for every 100 acres of no-till grain.
“It’s not megabucks from heaven,” said Gary Swan, director of governmental affairs for the Farm Bureau. But, it could prove to be important revenue to some farmers.
Farmers won’t change the way they farm, they’ll just sign up for the program on the Web.
About 50 farmers attended an introductory meeting Monday hosted by the farm bureau. They were generally curious and positive about the farm bureau’s venture, Swan said.
“It is complex,” he said “The farmers will be evaluating what potential this has for their various farms.”
The basis for carbon trading is simple enough:
- Carbon dioxide in the atmosphere is partly responsible for global warming.
- The Earth’s total carbon is relatively constant from sources in the air, sea, soil and life forms.
- For decades, electric utilities have been converting hydrocarbons (oil) and solid carbon (coal) to carbon dioxide and emitting it to the air.
- Farmers likewise have been reaping carbon dioxide from the air and putting the carbon (dead plant material) into the soil. Technically, it’s known as sequestration.
- Utilities and farmers trade; utilities pay farmers for the carbon credits.
GEX is the
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middle man in the trade and can accumulate fractions of credits from individual farms.
GEX has been trading two years in a market that is less than five years old.
While some analysts believe the market may develop into the next financial bubble, others are more confident.
New Carbon Finance, a New York-based research company, has indicated that carbon trading has the potential to become a $1 trillion market by 2020.
Three regions of North American already have established their own carbon-trading systems.
The Regional Greenhouse Gas Initiative, based in New York, conducted its first carbon-credit auction in September. The second in December brought a price of $3.38 per allowance and more than $100 million to be shared by its 10 member states in the Northeast. Pennsylvania is not a member, but is an “observing state.” A third auction is set for March.
“The results prove that distributing allowances via auctions in a carbon dioxide cap-and-trade program can be successful,” Pete Grannis, chair of the RGGI board, said after the second auction. “We look forward to developing a partnership with the Obama administration to create a strong federal climate action plan.”
A carbon-trading program is intended to discourage the emission of carbon dioxide and so confound global warming.
Some companies already are purchasing carbon credits to reduce their carbon footprint and to improve their “green” image.
The farm bureau and GEX are piloting their carbon-credit-trading program in eight counties, including Franklin. The counties are spread across the state and their farming practices lend themselves to carbon credit trading, according to Swan.
The farm bureau program should be available throughout Pennsylvania by 2010, he said. If there is a national cap-and-trade program, the value of carbon credits will increase significantly.
The farm bureau does not support a national cap-and-trade law because the program will cost farmers more for energy and other supplies, according to Swan. But if one were to be established, farmers could offset the cost by participating in the credit trading program.
Some Pennsylvania Farm Bureau members asked the bureau to explore a program, he said. Iowa farmers have earned $4 million from a similar program implemented by the Iowa Farm Bureau four years ago.
U.S. farms have the potential to mitigate as much as 40 percent of the nation’s climatic impact, according to the Ag Carbon Markets Working Group.
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