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Oregon agriculture wary of ‘cap-and-invest’ energy plan

Farmers may pursue new revenue streams under Oregon’s “cap-and-invest” carbon regulation proposal but they’d also likely pay more for key inputs.
Mateusz Perkowski

Capital Press

Published on December 1, 2017 9:29AM

EO Media Group File
A methane digester collects gas from decomposing cow manure at a dairy and uses it as fuel to generate electricity. Such generators could also produce carbon credits for Oregon farmers under “cap-and-invest” proposals considered by Gov. Kate Brown and the state legislature.

EO Media Group File A methane digester collects gas from decomposing cow manure at a dairy and uses it as fuel to generate electricity. Such generators could also produce carbon credits for Oregon farmers under “cap-and-invest” proposals considered by Gov. Kate Brown and the state legislature.

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Kristen Sheeran

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PORTLAND — Representatives of Oregon agriculture say they are wary of a proposal to reduce the state’s carbon emissions. While farmers could attract new revenue under the system, they could also face higher costs for fuel, electricity and other inputs, they say.

Oregon lawmakers in the House and Senate are currently devising carbon emission “cap-and-invest” bills to be introduced during the 2018 legislative session. The goal is to mitigate climate change by reducing the amount of “greenhouse gases” such as carbon dioxide that gets into the atmosphere.

The basic idea of the legislation is to cap the amount of carbon emissions by certain companies, with the greatest impact falling on those consuming or importing significant amounts of fossil fuels.

Facilities that fall below the cap would earn credits that can be sold to offset the emissions of companies that exceed that level.

“It harnesses market incentives by putting a price on carbon,” said Kristen Sheeran, carbon policy adviser for Oregon Gov. Kate Brown.

The State of Oregon would also sell emission allowances to regulated firms, generating money that will be used for highway improvements and to relieve the effects of higher electricity or natural gas prices, said Sheeran.

“Governor Brown wants to decarbonize the Oregon economy,” she said during the Nov. 30 meeting of the Oregon Board of Agriculture in Portland.

Some of the funds generated by the system would also fund projects that decrease or offset carbon emissions, which would benefit agriculture, she said.

“If people don’t want to do it, they don’t have to participate,” Sheeran said of the role that would be played by farmers and ranchers, who wouldn’t be regulated as emitters under the current proposals.

However, related industries, such as large food processors and pulp mills, would fall under the regulatory scheme.

For farmers, the proposal is concerning because it would raise the cost of doing business for manufacturers of fertilizer, fuel and energy — major inputs in agricultural production.

About 80 percent of Oregon’s farm goods are shipped out of state, so growers here can’t afford to have higher production costs than farmers elsewhere, said Mary Anne Cooper, public policy counsel for the Oregon Farm Bureau.

“It will make Oregon agriculture less competitive,” said Cooper.

Growers could potentially sell carbon credits they earned by turning dairy emissions into energy with anaerobic digesters, for example, or by growing crops that sequester carbon.

In California, though, farmers have often found the paperwork and verification process for generating carbon credits too cumbersome to be worthwhile, she said.

Also, growers who have already invested in reducing carbon emissions with energy efficient equipment and no-till cropping systems would likely not be compensated for past investments.

In effect, the policy would penalize early adopters of technology, Cooper said.

“We’re looking at it as a net loss for agriculture,” she said.

California and British Columbia have already implemented such carbon regulation systems, but there still isn’t enough information available to learn from those experiments, said Jeff Stone, executive director of the Oregon Association of Nurseries.

“We just don’t know its impacts,” he said.

There are opportunities for agriculture, such as investing money in planting trees along roads to absorb carbon, Stone said.

However, these possibilities must be studied more thoroughly, he said.

For example, it’s too early to know exactly how much carbon is “sequestered” through the production, sale and planting of Japanese maples or rhododendrons, Stone said.

“It needs to be part of the conversation,” he said.

Another issue is ensuring the cap-and-invest system would not drive emitting industries from Oregon to other states, which would hurt the economy without reducing emissions.

To this end, the government would probably offer free or discounted emission allowances to companies that are prone to flee, said Sheeran.

“We will provide some sort of differential treatment under the cap,” she said.



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