December 2004 eNews Bulletin

Speakers Look to a Carbon-Constrained World

November 12, 2004
by Patty Mantia

Curbing carbon dioxide emissions in a country where energy demand continues to climb is tricky business. But, wouldn’t it be novel if farmers ultimately lead the way for reduction of carbon dioxide, a greenhouse gas that scientists say is depleting the earth’s protective ozone layer?

That’s a possibility suggested by Colorado-based environmental researcher Joel Swisher, who spoke this week at the Oregon Environmental Council’s “Forum for Business and Environment.”

Farmers stand to benefit financially through production of carbon-restricting biomass crops and through leasing land for renewable energy resources like wind, Swisher suggested in an interview prior to his speech.

Farmers could also sell the credits they get for reducing carbon dioxide on a futures-like market ... thus receiving second income, he said. Swisher is a principal in research and consulting for the Rocky Mountain Institute, a Colorado-based nonprofit organization that promotes sustainability and helps businesses, governments and communities meet environmental and business goals.

The institute recently joined the Chicago Climate Exchange, a voluntary association of more than 60 industrial corporations, universities, power producers and municipalities that aims to reduce greenhouse gas emissions by creating a trading market, allowing members to “buy and sell” carbon credits.

Companies facing high costs to cut emissions can buy carbon credits or so-called “offsets” from those who have made extra cuts.

“Farmers could be one of the main sources of carbon offsets or carbon credits. There’s several ways that could happen. It could be possible for some farmers to actually capture more than one revenue stream in a carbon-constrained world,” Swisher said in the interview.

One way is “sequestering” or displacing the carbon by growing perennial biomass crops. Another way is through different soil management techniques that can tie up carbon, he said.

“In addition to that, there is potential for biomass fuels to be much more productive than they are today. Most of what we think of biomass today is like ethanol from corn, which is kind of a marginal proposition in terms of energy and economics and emissions. There’s some emerging technology for converting not field crops like corn but woody biomass to ethanol to use for fuel. It’s truly renewable and therefore has a carbon emissions benefit,” Swisher said.

Producing that kind of fuel could provide revenue from carbon credits as well as revenues from the fuel crop. “You would get a payment for your fuel, which would have as part of its other revenue stream the value of the carbon credits as well, because you are replacing fossil fuels,” he said.

In rural areas where there are high winds, farmers could lease their land for wind power development. “Wind power only occupies about two percent of the land ... the other 98% of the land you can still farm,” Swisher said.

“It may be that the agricultural community or the agricultural economy is really a key to starting to turn the tide on the politics of climate change. It’s not exactly an East Coast liberal sort of constituency, and if they start to see that collaborating with other countries in mitigating climate change is good business ... that would be really interesting in the political equation,” Swisher said.

At the Oregon Environmental Council forum, both Swisher and a second speaker, Bill Edmonds, director of environmental policy for PacifiCorp, agreed it’s only a matter of time before national laws are passed to restrict carbon dioxide emissions.

The state of Oregon has laws which require new power plants to meet stricter carbon emission standards. Plant developers may “offset” their reduction levels by paying “mitigation” funds to a qualified nonprofit which must use the funds for projects that will displace carbon.

PacifiCorp, an electric utility that serves six states including Oregon and Washington, has developed a 10-year Integrated Resources Plan, to address future electric generating facilities and carbon issues, too, Edmonds said.

The Integrated Resources Plan compares costs and risks of different generating facilities. The plan adds $8 in costs for each ton of carbon expected to be emitted by a facility, thus weighing the environmental costs of a facility with other costs.

“We don’t think there’ll be a carbon tax in the future but there will be some carbon regulation and this is one way of kind of getting at that,” Edmonds said. The utility now releases about 52 million tons annually of carbon dioxide, he said.

The utility like others across the country faces ever-increasing demand for electricity while costs, including the steeply climbing cost of gas for gas-powered generation, escalate. “Our peak demand is growing primarily because of Utah growth. Utah is growing fast, new houses are being built and air-conditioning is going into the houses,” Edmonds said. The utility is promoting energy-efficient air conditioning, he said.

The company’s future plan relies on a new coal plant, a few gas plants, substantial conservation and increasing renewable sources, Edmonds said.

Eventually, the utility’s coal plants will come to the end of their useful lives and shut down. After the year 2020, filling the demand for electrical power gets tricky, Edmonds said.

“How are you going to fill that in an era where gas is so expensive, coal technology may have developed or may not have, you’re getting the renewables and conservation you can but ...,” Edmonds said. “It gets nerve-wracking but it’s opportunity at the same time,” he said

PacifiCorp was the first utility with headquarters outside of California to join the California Climate Action Registry, a nonprofit organization which tracks greenhouse gas emissions. The registry emphasizes voluntary actions to increase energy efficiency and emission reduction.

Swisher and Edmonds speeches came just a day after the Arctic Climate Impact Assessment was released by an international group of 300 scientists. That study said the polar region is bearing the brunt of global temperature increases, losing 8% of sea ice in the past 30 years. NASA satellites show this year’s Antarctic ozone hole may be a record breaker.

Scientists generally agree that industry, transportation (such as cars and trucks) and utilities each contribute a third of carbon dioxide emissions in this country.

The Chicago Climate Exchange started trading carbon in December 2003. It has been trading at about 95 cents a ton. Significantly sized members include American Electric Power, Ford Motor Company, Dupont, Motorola, and the City of Chicago. The exchange members have agreed to reduce greenhouse gas emissions by 1% per year during the Chicago Climate Exchange pilot program.

Rocky Mountain Institute powers its offices with wind and solar and uses energy efficient buildings and equipment. But, still, workers contribute to greenhouse gases with business travel, heating fuel and some electricity purchases, thus leading them to join the Chicago Climate Exchange, Swisher said.