US farmers may reap $24.5 bln/yr from CO2 bill-study

(Reuters)

WASHINGTON, May 31 (Reuters) - U.S. farmers could reap a $24.5 billion paycheck every year from low-carbon practices like collecting methane from livestock and using low-till crop methods if the U.S. Congress passes a bill to cut U.S. emissions of heat-trapping gases, according to a report to be released on Monday.

The U.S. Senate next week is set to debate a bill that could cut total U.S. global warming emissions by 66 percent by 2050. A study by the Bipartisan Policy Center shows a hefty pay-off for Farm State lawmakers who could be a key to the bill's success.

"As a practical political matter, support from farm state senators will be critical to passing mandatory legislation," said Paul Bledsoe, spokesman for the nonprofit, nonpartisan legislative think-tank.

Under the measure set for Senate debate, known as the Lieberman-Warner Climate Security Act, U.S. greenhouse gas emissions would drop by about 2 percent per year between 2012 and 2050, based on 2005 emission levels.

Cap-and-trade provisions in the bill would set up a lucrative market for buying and selling carbon emissions credits -- essentially the right to emit heat-trapping gases.

Between 2012 and 2030, those credits could be worth $440 billion to U.S. farmers, averaging $24.5 billion over the 18 years, according to the report which was made available to Reuters.

"Done well, a national greenhouse gas emissions control policy can provide a new multibillion dollar per year market opportunity for farmers," said the study, which was spearheaded by former senators Tom Daschle and Bob Dole -- both former Senate majority leaders who hail from South Dakota and Kansas, respectively.

The U.S. Environmental Protection Agency has estimated that 168 million tons of carbon dioxide could be sequestered in U.S. agricultural soil each year.

If carbon emissions allowances are valued at $10 per ton, sequestration efforts could yield $1.7 billion a year to farmers, the report said.

Livestock producers could also collect methane -- a greenhouse gas 21 times more potent than carbon dioxide -- and turn it into a gas that can power an electric generator to create electricity for farm operations, the group said.

 (Reporting by Chris Baltimore; editing by Jim Marshall)
 ((chris.baltimore@thomsonreuters.com; + 202 898 8316; Reuters Messaging: chris.baltimore.reuters.com@reuters.net)) Keywords: USA WARMING/AGRICULTURE