"You can't see it, you can't taste it, but you can trade it," says Dr. David Miller, a key player in establishing the rules of the Chicago Climate Exchange (CCX), the first U.S.-based voluntary program for trading greenhouse gases. The program has roots in the Acid Rain Program (1990), an EPA market-based initiative created to reduce sulfur dioxide and nitrogen oxide, emissions that cause acid rain. Since the 1990s, sulfur dioxide emissions have dropped 40 percent, and nitrogen oxide levels likewise have fallen.
Experts agree that as environmental degradation occurs, markets arise. The notion of assigning a value to soil, air and atmospheric quality while earning money is already well established via various forms of conservation easements. The growing success of the latest wave to hit the market, the carbon trade, accompanies a rise in public awareness of global warming and the call for reducing greenhouse gas emissions deemed responsible for the human portion of the equation. As legislation such as the recently defeated Lieberman-Warner Climate Security Act crawls through Congress, issues regarding government mandates, bureaucracy and global warming are drawing closer scrutiny.
The challenges associated with reducing carbon dioxide emissions are greater than ever. Like sulfur dioxide and nitrogen oxide, carbon dioxide is a byproduct of coal-fired power plants. It's also attributable to factories, cars and other sources. Dr. Michael McDaniel, the professional in residence at LSU's Center for Energy Studies in Baton Rouge, spoke to the AgCenter audience about environmental concerns and policy trends. Pointing to the Pew Center for Climate Change as his source, McDaniel, who also is a former secretary of the Louisiana Department of Environmental Quality, says that worldwide carbon emissions must come down 80 to 90 percent in the next 20 to 30 years to get global warming "to where it won't increase further."
The Lieberman-Warner act called for a 71 percent reduction of greenhouse gas emissions by 2050. Some opponents of the bill say that it fell short of meeting the standards needed to halt future warming. Others argue that the bill called for a massive, unnecessary bureaucracy and that it would have robbed U.S. citizens of jobs and income. The negative impacts of increasing carbon emissions are expected to continue to roil in weather, farmland, wildlife and social conditions for the next 20 to 50 years, according to the U.S. Climate Change Science Program. Legislation seeking to reduce emissions is thus expected to continue challenging Congress and the nation's voters.
Among landowners attending the local conference, talk centered not on environmental concerns but on interest in affording to keep the land they own. Landowners who hold mineral rights or valuable tracts of timber say that paying taxes is not a problem, but, for others, holding onto acreage can be exhausting.
R.D. Lewis, a jovial Lincoln Parish landowner, says that if there's something he can sell to sustain his land, he is willing to consider it. "We used to put cow dung in our stomachs to cure the flu, pine-top tea to cure a cold," he says. "Now we can put these things in our pockets. I can even sell my altitude." Lewis is referring to the rare Louisiana hilltop, valued by cell phone companies that lease high ground for their communication towers.
With the hope of snagging a lucrative opportunity, most in the audience, like Lewis, listened attentively for six hours. One by one, leaders in the cap-and-trade market and spokespersons for the forest and agriculture industries tuned Louisiana landowners in to a way they might squeeze a little more from their land.
With the country's most productive forested land in the southern United States "'America's wood basket" Louisiana's forest and agriculture industries also have a strong interest in keeping roots in the Louisiana's soil. "We have a whole lot of opportunity here," Buck Vandersteen, executive director of the Louisiana Forestry Association, told the crowd. Vandersteen stressed the need to balance environmental and economic practices. "There are a lot of mom-and-pop landowners who depend on affordable and quality lifestyles." Vandersteen's underlying call to action is for landowners to join the timber industry.
Kurt Krueger, an aggregator in the carbon trade market who works much like a stockbroker or mediator for sellers, expands on that theme: "You don't have to be harvesting your trees. In fact, the less harvesting you do, the better off you are."
Fallen trees emit carbon rather than sequestering the gas. But, Krueger adds, timber is the decision maker for landowners who farm trees and are driven by multiple investments. "Timber is going to produce $50 to $100 per acre per year. Carbon is maybe $7 to $15 per acre per year," Krueger admits.
Clearing forests for other types of production, such as agriculture and housing needs, contributes 18 percent of greenhouse gas emissions "a larger contribution than all the cars on the road," Dr. Michael Blazier said to the audience, suggesting that the cap-and-trade program may prove to be a viable stacking resource for keeping the land green. Blazier is an assistant professor at LSU's AgCenter Hill Farm Research Station. Discussing the expected explosion in world population predicted to double in the next 50 years and an increasing appetite for affluence among world populations, Blazier suggested that there will be "critical issues to consider as opportunities unfold."
So far, the only carbon credit-trading center in the United States is at CCX in Chicago. Carbon-trading is obligatory in the European Union (EU) under the Kyoto Accords' mandatory carbon caps. The EU's Emission Trading System's three-year-old trial system has been declared a success. Some in the United States are waiting for a carbon-trading mandate to kick in here and stimulate the price paid for carbon storage.
Sens. Barack Obama and John McCain both supported the controversial Lieberman-Warner bill in particular and the programs to reduce greenhouse gases in general. Despite the bill's recent failure, such newfound political credibility is bound to improve the bill's chances next time around. The notion of inevitability has sent the U.S.-based carbon trade market skyward. CCX reports that in recent months the value of offsets has risen from $1 a ton to last month's high of $7.50 a ton. Michael McDaniel and other experts say the market is "explosive."
After a long day of taking a closer look at the future of cap-and-trade, the landowners at the recent presentation said they gained a new understanding of the phenomenon, according to an AgCenter survey. Others left shaking their heads over a system that, at first blush, appears complicated, top heavy and difficult to manage.
Heading for the door, one landowner from Houma mistakenly declared, "It won't work with the land I've got. My trees are too old."
"It's gonna take time," responded a pecan farmer from Alexandria as he ducked out into the rain.