Wednesday, February 6, 2008

A Cautionary Tale from Kansas

Right now the Kansas State Legislature is moving a bill that would, among many other things, result in a price cap on soil carbon sequestration offsets of $3/ton. This is part of a compromise that has emerged to allow a new coal-fired utility to be built in the state while trying to address the GHG emissions that led to the plants permit originally being denied by the Governor.

The good news is that ag carbon offsets would be allowed as a means for the utility to reduce its carbon burden.

But the bad news FAR outweighs the good -- the KS state bill sets the price of carbon offsets at a mere $3/ton of carbon. This is NOT a market price since there is no outright cap-and-trade plan in the bill -- it is essentially a carbon tax. By capping the price of sequestration offsets so low, there is no way they will be measured in a way that justifies the actual offset of emissions. So, this will become just another example used against offsets as not being "real" or "measured" by those enviro groups who oppose ag offsets in national climate legislation.

On top of that, any KS farmer that sells their carbon to the state now IS MISSING OUT on a likely three-fold expansion of the carbon commodity price coming within the next few years when national climate legislation is enacted.

In my mind - this is a case of some good intentions gone bad. The desire to include agriculture in the solution to reduce emissions is terrific, but agriculture needs to be paid FAIR MARKET VALUE for the carbon commodity it will provide -- not accept some randomly picked number as the value of carbon.

Again - this is an example of why it is so crucial to be involved with the process of writing the offset language and how it connects with the underlying bill.


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