As much as we might like to think that everyone would voluntarily reduce their greenhouse gas emissions, regulations are the only way to ensure that GHG emissions are reduced at the rate needed to mitigate catastrophic climate change. Regardless of the notice given, any such legislation will come as a shock to those companies most affected. This is indeed the case currently for many in the agricultural industry, as the Environmental Protection Agency (EPA) has recently announced a proposal to regulate GHGs under the Clean Air Act. This week, ClimatePULSE will take a look at this potential piece of GHG legislation and the importance of turning these regulatory risks into opportunities.
Should the EPA’s “advanced notice of proposed rulemaking” be adopted, sources which emit, or have the potential to emit, over 100 tons per year of GHGs will be required to obtain permits. 2006 data from the EPA indicates that approximately 6.4% of all GHG emissions in the United States come from the agricultural sector, and a significant portion of that is produced as methane from livestock. While measures may be taken to reduce the GHG emissions that occur as part of natural digestion in livestock, emission from this source can not entirely be eliminated. The New York Farm Bureau has issued a statement which indicates that taxes for required permits may be as high as $175/dairy cow, $87.50/beef cattle, and $20/hog and that farms with more than 25 dairy cows, 50 beef cattle, or 200 hogs would exceed the threshold of 100 tons per year, thus requiring permits.
While such regulations may impose additional costs on the farmers, they can also stimulate growth of new clean tech opportunities that enable producers to turn liabilities into assets. As necessity drives innovation, regulations requiring GHG management for new sectors provide the clean tech industry with a new marketplace. Manure management is a prime example of this, as the methane which is emitted from cattle and swine waste can be used to provide heat and electricity. This alternate energy source in turn decreases operating costs at the farm by producing heat and/or electricity on-site, or as a source of income by selling electricity or natural gas to a local provider. While this concept has been under development for some time and is well-established, it is all but certain that strict regulations in the farming industry would provide the necessary drive for new GHG reduction technologies for the agricultural sector.
GHG reduction technologies not only reduce additional costs on farmers by lowering their annual GHG emissions, but are also capable of reducing operating costs and generating income. Energy efficiency improvements and onsite energy generation are capable of significantly reducing operating costs while income may be brought to the farm through the sale of either generated energy or GHG offset credits – an income source that may not be present had regulations not required GHG reduction activities to be undertaken. This concept of turning risks into rewards and costs into income are certainly not applicable to the agricultural sector alone. Many organizations in all sectors have voluntarily undertaken GHG projects to benefit both environmentally and economically – GHG regulations act to ensure that all organizations within given sectors can achieve such benefits. Whether or not the EPA’s proposal is adopted and agriculture-based GHG emissions are regulated, farming operations should closely examine their options to reduce GHG emissions while simultaneously creating a new source of income.
ClimateCHECK is a greenhouse gas (GHG) management services and solutions company. The firm’s solutions support all facets of the carbon commodities market, including the verification, validation and consultation of GHG inventories and program portfolios, as well as quantification protocols for emissions reduction projects and clean technologies. ClimateCHECK is a sponsor and co-founded, with World Resources Institute and Carbon Disclosure Project, the Greenhouse Gas Management Institute (www.ghginstitute.org). Founded in March 2007, the company has locations throughout North America. For more information visit www.climate-check.com