Order Code RL33898
Climate Change:
The Role of the U.S. Agriculture Sector
Updated May 5, 2008
Renée Johnson
Analyst in Agricultural Economics
Resources, Science, and Industry Division

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Climate Change:
The Role of the U.S. Agriculture Sector
Summary
The agriculture sector is a source of greenhouse gas (GHG) emissions, which
many scientists agree are contributing to observed climate change. Agriculture is
also a “sink” for sequestering carbon, which might offset GHG emissions by
capturing and storing carbon in agricultural soils. The two key types of GHG
emissions associated with agricultural activities are methane (CH ) and nitrous oxide
4
(N O). Agricultural sources of CH emissions mostly occur as part of the natural
2
4
digestive process of animals and manure management at livestock operations;
sources of N O emissions are associated with soil management and fertilizer use on
2
croplands. This report describes these emissions on a carbon-equivalent basis to
illustrate agriculture’s contribution to total national GHG emissions and to contrast
emissions against estimates of sequestered carbon.
Emissions from agricultural activities account for 6%-8% of all GHG emissions
in the United States. Carbon captured and stored in U.S. agricultural soils partially
offsets these emissions, sequestering about one-tenth of the emissions generated by
the agriculture sector, but less than 1% of all U.S. emissions annually. Emissions and
sinks discussed in this report are those associated with agricultural production only.
Emissions associated with on-farm energy use or with food processing or
distribution, and carbon uptake on forested lands or open areas that might be
affiliated with the farming sector, are outside the scope of this report.
Most land management and farm conservation practices can help reduce GHG
emissions and/or sequester carbon, including land retirement, conservation tillage,
soil management, and manure and animal feed management, among other practices.
Many of these practices are encouraged under most existing voluntary federal and
state agricultural programs that provide cost-sharing and technical assistance to
farmers, predominantly for other production or environmental purposes. However,
uncertainties are associated with implementing these types of practices depending on
site-specific conditions, the type of practice, how well it is implemented, the length
of time a practice is undertaken, and available funding, among other factors. Despite
these considerations, the potential to reduce emissions and sequester carbon on
agricultural lands is reportedly much greater than current rates.
The 110th Congress is considering a range of climate change policy options,
including mandatory GHG emission reduction programs. The current legislative
proposals would not require emission reductions in the agriculture and forestry
sectors. However, some of the GHG emission reduction programs would allow the
agriculture and forestry sectors to generate carbon offsets, whereby participating
farmers and landowners could generate (and sell) carbon offsets and credits
associated with carbon capture and storage, emissions reductions, and/or other
implemented environmental improvements. Also, as part of the pending omnibus
farm bill debate, there are provisions in the House and Senate versions of the bill
(H.R. 2419) that could expand the scope of existing farmland conservation programs
that contribute to emissions reductions and carbon storage in agricultural activities.

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Contents
Agricultural Emissions and Sinks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Source of National Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agricultural Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Direct GHG Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Other Types of Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Total GHG Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Uncertainty Estimating Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Other Estimated Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Sources of GHG Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Potential for Additional Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Agricultural Carbon Sinks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Carbon Loss and Uptake . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Total Carbon Sequestration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Estimated Emission Offsets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Uncertainty Estimating Carbon Sinks . . . . . . . . . . . . . . . . . . . . . . . . . 12
Potential for Additional Uptake . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Per-Unit Value Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Enhancing Carbon Sinks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Mitigation Strategies in the Agriculture Sector . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Federal Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Conservation Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Other Farm Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
State Programs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Other Programs and Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Recent Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Climate Change Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2007 Farm Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Conservation and Related Farm Bill Programs . . . . . . . . . . . . . . . . . . 29
Market Development for Farm-Based Environmental Services . . . . . 29
Considerations for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Appendix: Primer on the Role of the U.S. Agriculture Sector in the
Climate Change Debate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
List of Figures
Figure 1. Agricultural GHG Emissions, Average 2001-2005 . . . . . . . . . . . . . . . . 8
Figure 2. National Distribution of Anaerobic Digester Energy Production,
Operating and Planned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Figure 3. Carbon Sequestration in Agricultural Soils . . . . . . . . . . . . . . . . . . . . . 11
Figure 4. USDA Conservation Spending, FY2005 . . . . . . . . . . . . . . . . . . . . . . . 19

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List of Tables
Table 1. GHG Emissions and Carbon Sinks, Agricultural Activities,
1990-2005 (CO -Equivalent) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2
Table 2. Carbon Sequestration Potential in the U.S. Agriculture Sector,
Alternative Scenarios and Payment Levels . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 3. Representative Carbon Sequestration Rates . . . . . . . . . . . . . . . . . . . . . 15
Table 4. Conservation and Land Management Practices . . . . . . . . . . . . . . . . . . . 18

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Climate Change:
The Role of the U.S. Agriculture Sector
The debate in Congress over whether and how to address possible future climate
change is intensifying. Often, the role of the U.S. agriculture sector is invoked in this
debate. Agriculture is a source of greenhouse gas (GHG) emissions, which many
scientists agree are contributing to observed climate change. Agriculture is also a
“sink” for sequestering carbon, which partly offsets these emissions. Carbon
sequestration (the capture and storage of carbon) in agricultural soils can be an
important component of a climate change mitigation strategy, limiting the release of
carbon from the soil to the atmosphere.
The 110th Congress is considering a range of climate change policy options. The
current legislative proposals would not require emission reductions in the agriculture
and forestry sectors. However, many of the GHG emission reduction programs would
either mandate or authorize a cap-and-trade program to reduce GHG emissions.
Some of these cap-and-trade programs would allow the agriculture and forestry
sectors to generate offsets in support of the program, thus indirectly involving the
agriculture and forestry sectors as a source of carbon offsets. Other proposals would
allow participating farmers and landowners to receive emissions allowances (or
credits) for sequestration and/or emission reduction activities. These allowances
could be sold to facilities (e.g., power plants) covered by a cap-and-trade program.
The pending omnibus farm bill (H.R. 2419)1 might also expand the scope of
existing voluntary farm and forestry conservation programs that promote
conservation and land management practices in ways that could more broadly
encompass certain aspects of these climate change initiatives. Principally, both the
House and Senate versions of the farm bill seek to expand existing voluntary
conservation programs and incentives that promote conservation and land
management practices, predominantly for other production or environmental
purposes. However, these types of practices also contribute to reduced emissions and
increased carbon storage on agricultural and forested lands. Program incentives
include cost-sharing and technical assistance, research programs and demonstration
projects, and farmer or landowner access to low-cost loans, loan guarantees, grants,
incentive payments, and tax credits. In addition, there are provisions in both the
House and Senate versions of bill that seek to expand the scope of existing farmland
conservation programs by facilitating the development of private-sector markets for
a range of environmental goods and services from farmers and landowners, including
carbon storage. This could further facilitate participation by the agriculture and
forestry sectors in a GHG emission reduction program as a source of carbon offsets
and credits.
1 The current omnibus farm bill, the Farm Security and Rural Investment Act of 2002 (P.L.
107-171), and many of its provisions expire in 2007. Hereafter referred to as “farm bill.”

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CRS-2
This report is organized in three parts. First, it discusses the extent of GHG
emissions associated with the U.S. agriculture sector, and cites current and potential
estimates for U.S. agricultural soils to sequester carbon and partly offset national
GHG emissions. Second, the report describes the types of land management and
farm conservation practices that can reduce GHG emissions and/or sequester carbon
in agricultural soils, highlighting those practices that are currently promoted under
existing voluntary federal agricultural programs. The Appendix provides a summary
primer of the key background information presented in these first two sections.
Finally, the report describes ongoing legislative action within both the climate change
and farm bill debates, and discusses the types of questions that may be raised
regarding the role of the U.S. agriculture sector in the broader climate change debate.
This report does not address the potential effects of global climate change on
U.S. agricultural production. Such effects may arise because of increased climate
variability and incidence of global environmental hazards, such as drought and/or
flooding, pests, weeds, and diseases, or temperature and precipitation changes that
might cause locational shifts in where and how agricultural crops are produced.2
This report also does not address how ongoing or anticipated initiatives to
promote U.S. bioenergy production may effect efforts to reduce GHG emissions
and/or sequester carbon, such as by promoting more intensive feedstock production
and by encouraging fewer crop rotations and planting area setbacks, which could both
raise emissions and reduce carbon uptake.3
Agricultural Emissions and Sinks
Agriculture is a both a source and a sink of greenhouse gases, generating
emissions that enter the atmosphere and removing carbon dioxide (CO ) from the
2
atmosphere through photosynthesis and storing it in vegetation and soils (a process
known as sequestration). Sequestration in farmland soils partially offsets agricultural
emissions. Despite this offset, however, the U.S. agriculture sector remains a net
source of GHG emissions.
Source of National Estimates
Estimates of GHG emissions and sinks for the U.S. agriculture sector presented
in this report are the official U.S. estimates of national GHG emissions and carbon
uptake, as published annually by the U.S. Environmental Protection Agency (EPA)
in its Inventory of U.S. Greenhouse Gas Emissions and Sinks.4 EPA’s Inventory data
reflect annual national emissions by sector and fuel, including estimates for the
agriculture and forestry sectors. EPA’s estimates rely on data and information from
2 See CRS Report RL33849, Climate Change: Science and Policy Options, by Jane Leggett.
3 See CRS Report RL34265, Selected Issues Related to an Expansion of the Renewable Fuel
Standard (RFS), by Brent D. Yacobucci and Randy Schnepf.
4 EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2005, April 2007, at
[http://epa.gov/climatechange/emissions/usinventoryreport.html].

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CRS-3
the U.S. Department of Agriculture (USDA), the Department of Energy, the
Department of Transportation, the Department of Defense, and other federal
departments. The EPA-published data are rigorously and openly peer reviewed
through formal interagency and public reviews involving federal, state, and local
government agencies, as well as private and international organizations. For the
agriculture and forestry sectors, USDA publishes a supplement to EPA’s Inventory,
which builds on much of the same data and information, but in some cases provides
a more detailed breakout by individual states and sources.5
In this CRS report, emissions from agricultural activities are aggregated in terms
of carbon dioxide or CO -equivalents, and expressed as million metric tons
2
(MMTCO -Eq.).6 This aggregation is intended to illustrate agriculture’s contribution
2
to national GHG emissions and to contrast emissions against estimates of sequestered
carbon.
Agricultural Emissions
Direct GHG Emissions. The types of GHG emissions associated with
agricultural activities are methane (CH ) and nitrous oxide (N O), which are two of
4
2
the key gases that contribute to GHG emissions.7 These gases are significant
contributors to atmospheric warming and have a greater effect warming than the
same mass of CO 8
2.
Agricultural sources of CH emissions mostly occur as part of the natural
4
digestive process of animals and manure management in U.S. livestock operations.
Sources of N O emissions are mostly associated with soil management and
2
commercial fertilizer and manure use on U.S. croplands, as well as production of
nitrogen-fixing crops.9 Emissions of N O from agricultural sources account for about
2
two-thirds of all reported agricultural emissions; emissions of CH account for about
4
one-third of all reported emissions. Across all economic sectors, the U.S. agriculture
5 USDA, U.S. Agriculture and Forestry Greenhouse Gas Inventory: 1990-2001, TB1907,
March 2004, at [http://www.usda.gov/oce/global_change/gg_inventory.htm].
6 “Carbon-equivalents” equate an amount of a GHG to the amount of carbon that could have
a similar impact on global temperature. EPA’s data are in teragrams (million metric tons).
Alternative ways to express emissions and offsets are in carbon equivalents (MMTCE),
which assume a multiplier of 0.272 to convert from EPA-reported equivalent CO -Eq. units.
2
7 The principal gases associated with climate change from human activities are CO , CH ,
2
4
N O, and ozone-depleting substances and chlorinated and fluorinated gases, such as
2
hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. See CRS Report RL33849,
Climate Change: Science and Policy Implications, by Jane Leggett.
8 Methane’s ability to trap heat in the atmosphere is 21 times that of CO ; nitrous oxide is
2
310 times that of CO (measured over a 100-year period). Intergovernmental Panel on
2
Climate Change (IPCC), Climate Change 2007, Technical Summary of the Working Group
I Report, Table TS-2, at [http://ipcc-wg1.ucar.edu/wg1/Report/AR4WG1_Print_TS.pdf].
9 USDA, U.S. Agriculture and Forestry Greenhouse Gas Inventory: 1990-2001, TB1907,
Figure 3-6, March 2004, at [http://www.usda.gov/oce/global_change/gg_inventory.htm].
Nitrogen-fixing crops refer to beans, legumes, alfalfa, and non-alfalfa forage crops.

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CRS-4
sector was the leading source of N O emissions (80%) and a major source of CH
2
4
emissions (30%) in 2005.10
Other Types of Emissions. Agricultural activities may also emit other
indirect greenhouse gases, such as carbon monoxide, nitrogen oxides, and volatile
organic compounds from field burning of agricultural residues.11 These emissions are
not included in EPA’s annual Inventory estimates because they contribute only
indirectly to climate change by influencing tropospheric ozone, which is a
greenhouse gas. Agricultural activities may also release other types of air emissions,
some of which are regulated under the federal Clean Air Act, including ammonia,
volatile organic compounds, hydrogen sulfide, and particulate matter.12 These types
of emissions are typically not included in proposals to limit GHG emissions.
The sector also emits CO and other gases through its on-farm energy use, for
2
example, through the use of tractors and other farm machinery. These emissions are
generally aggregated along with other transportation and industrial emissions in the
“energy” sources, where they constitute a very small share of the overall total.
Therefore, these emissions are not included in reported estimates for the U.S.
agriculture sector.
Total GHG Emissions. In 2005, GHG emissions from U.S. agricultural
activities totaled nearly 540 MMTCO -Eq., expressed in terms of CO -equivalent
2
2
units, and accounted for about 7% of the total GHG emissions in the United States
(Table 1).13 Although the agriculture sector is a leading economic sector
contributing to national GHG emissions, its share of total emissions is a distant
second compared to that for the energy sector. Fossil fuel combustion is the leading
source of GHG emissions in the United States (about 80%), with the energy sector
generating 85% of annual emissions across all sectors.14
Recent trends in GHG emissions associated with the U.S. agriculture sector
suggest emissions reductions in recent years. In 2005, emissions from agricultural
activities were lower compared to estimates for 2000 and the most recent five-year
average. However, emissions in 2005 were higher compared to reported emissions
for 1990 and 1995 (Table 1).
10 EPA’s 2007 Inventory, Table ES-2. Other major CH sources were landfills, natural gas
4
systems, and coal mining. Mobile combustion was the second largest source of N O.
2
11 EPA’s 2007 Inventory, Table 6-2. NO and CO influence the levels of tropospheric
X
ozone, which is both a local pollutant and a GHG (called “indirect” greenhouse gases). Their
contributions cannot be measured by emissions.
12 See CRS Report RL32948, Air Quality Issues and Animal Agriculture: A Primer, by
Claudia Copeland. Particulate emissions may also contribute to climate change, but their
influence is predominantly local, short-term and poorly quantified.
13 EPA’s 2007 Inventory, Table 2-14 and Table 6-1.
14 Aside from the energy and agriculture/forestry sectors, by source, other leading
contributors are wood biomass/ethanol use (3%); nonenergy use of fuel; landfills; and
substitution of ozone-depleting substances (2% each). By sector, leading sources are
industrial processes (5%) and wastes (2%). EPA’s 2007 Inventory, Tables ES-2 and ES-4.

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CRS-5
Table 1. GHG Emissions and Carbon Sinks,
Agricultural Activities, 1990-2005 (CO -Equivalent)
2
Avg.
Source
1990
1995
2000
2005
2001-2005
million metric tons CO equivalent (MMTCO -Eq)
2
2
U.S. Agricultural Activities
GHG Emissions (CH and N O)
4
2
Agriculture Soil Managementa
366.9
353.4
376.8
365.1
370.9
Enteric Fermentationb
115.7
120.6
113.5
112.1
115.0
Manure management
39.5
44.1
48.3
50.8
45.6
Rice Cultivation
7.1
7.6
7.5
6.9
7.4
Agricultural Residue Burning
1.1
1.1
1.3
1.4
1.2
Subtotal
530.3
526.8
547.4
536.3
540.1
Carbon Sinks
Agricultural Soils
(33.9)
(30.1)
(29.3)
(32.4)
(31.7)
Other
na
na
na
na
na
Subtotal
(33.9)
(30.1)
(29.3)
(32.4)
(31.7)
Net Emissions, Agriculture
496.4
496.7
518.1
503.9
508.4
Attributable CO emissions:c
2
46.8
57.3
50.9
45.5
52.6
Fossil fuel/mobile combustion
%All Emissions, Agricultured
8.5%
8.0%
7.7%
7.4%
8.0%
%Total Sinks, Agriculture
4.8%
3.6%
3.9%
3.9%
4.0%
%Total Emissions, Forestry
0.2%
0.2%
0.2%
0.3%
0.3%
%Total Sinks, Forestrye
94.3%
92.0%
94.8%
94.7%
95.0%
Total GHG Emissions, All Sectors
6,242.0
6,571.0
7,147.2
7,260.4
6,787.1
Total Carbon Sinks, All Sectors
(712.8)
(828.8)
(756.7)
(828.5)
(801.0)
Net Emissions, All Sectors
5,529.2
5,742.2
6,390.5
6,431.9
5,986.1
Source: EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2005, April 2007,
[http://epa.gov/climatechange/emissions/usinventoryreport.html]. Table ES-2, Table 2-13, Table 6-1,
Table 7-1, and Table 7-3. EPA data are reported in teragrams (Tg.), which are equivalent to one
million metric tons each.
a. N O emissions from soil management and nutrient/chemical applications on croplands.
2
b. CH emissions from ruminant livestock.
4
c. Emissions from fossil fuel/mobile combustion associated with energy use in the U.S. agriculture
sector (excluded from EPA’s reported GHG emissions for agricultural activities).
d. Does not include attributable CO emissions from fossil fuel/mobile combustion.
2
e. Change in forest stocks and carbon uptake from urban trees and landfilled yard trimmings.
Uncertainty Estimating Emissions. EPA’s estimates are based on annual
USDA data on crop production, livestock inventories, and information on
conservation and land management practices in the agriculture sector. Actual
emissions will depend on site-specific factors, including location, climate, soil type,
type of crop or vegetation, planting area, fertilizer and chemical application, tillage
practices, crop rotations and cover crops, livestock type and average weight, feed mix
and amount consumed, waste management practices (e.g., lagoon, slurry, pit, and
drylot systems), and overall farm management. Emissions may vary year to year
depending on actual growing conditions. The EPA-reported data reflect the most
recent data and historical updates, and reflect underlying methodological changes, in

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CRS-6
keeping with Intergovernmental Panel on Climate Change (IPCC) guidelines.15 More
detailed information is in EPA’s 2007 Inventory.
Other Estimated Emissions. EPA’s reported emissions for the U.S.
agriculture sector are based on agricultural production only and do not include
emissions associated with on-farm energy use and forestry activities,16 or emissions
associated with food processing or distribution. Although EPA’s GHG estimates for
the U.S. agriculture sector do not include CO emissions from on-farm energy use,
2
estimates of these CO emissions constitute a small share of overall GHG emissions.
2
During the last few years, EPA’s estimates of CO emissions from on-farm fossil fuel
2
and mobile combustion averaged about 50 MMTCO -Eq. per year17 (Table 1).
2
These emissions are generally aggregated with emissions for the transportation and
industrial sectors. Even if these emissions were included with other attributed GHG
emissions for the agriculture sector, this would not substantially raise agriculture’s
overall share of total GHG emissions.
Sources of GHG Emissions. EPA’s Inventory estimates of CH and N O
4
2
emissions from agricultural activities are measured across five categories.
! Agriculture soil management: Nitrous oxide emissions from
farmland soils are associated with cropping practices that disturb
soils and increase oxidation, which can release emissions into the
atmosphere. The types of practices that contribute to emissions
releases are fertilization; irrigation; drainage; cultivation/tillage;
shifts in land use; application and/or deposition of livestock manure
and other organic materials on cropland, pastures, and rangelands;
production of nitrogen-fixing crops and forages; retention of crop
residues; and cultivation of soils with high organic content.
! Enteric fermentation: Methane emissions from livestock
operations occur as part of the normal digestive process in ruminant
animals18 and are produced by rumen fermentation in metabolism
and digestion. The extent of such emissions is often associated with
the nutritional content and efficiency of feed utilized by the animal.19
Higher feed effectiveness is associated with lower emissions.
15 The IPCC was established to assess scientific, technical and socioeconomic information
related to climate change, its potential impacts and options for adaptation and mitigation.
IPCC’s methodolgy to estimate emissions and sinks are consistent with those used by other
governments and with established guidelines under the United Nations Framework
Convention on Climate Change.
16 Land use and forestry activities account for less than 1% of total estimated GHG
emissions in the United States (EPA’s 2007 Inventory, Table ES-4). See Table 1.
17 EPA’s 2007 Inventory, Table 2-14.
18 Refers to livestock (cattle, sheep, goats, and buffalo) that have a four-chambered stomach.
In the rumen chamber, bacteria breaks down food and degrades methane as a byproduct.
19 R. A. Leng, “Quantitative Ruminant Nutrition — A Green Science,” Australian Journal
of Agricultural Research, 44: 363-380. Feed efficiency is based on both fermentive
digestion in the rumen and the efficiency of conversion of feed to output (e.,g, milk, meat)
as nutrients are absorbed.

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CRS-7
! Manure management: Methane and nitrous oxide emissions
associated with manure management occur when livestock or
poultry manure is stored or treated in systems that promote anaerobic
decomposition, such as lagoons, ponds, tanks, or pits.
! Rice cultivation: Methane emissions from rice fields occur when
fields are flooded and aerobic decomposition of organic material
gradually depletes the oxygen in the soil and floodwater, causing
anaerobic conditions to develop in the soil, which releases methane.
! Agricultural residue burning: Methane and nitrous oxide
emissions are released by burning residues or biomass.20
The share of GHG emissions for each of these categories is as follows:
agriculture soil management (68% of emissions), enteric fermentation (21%), manure
management (10%), rice cultivation (1%), and field burning of agricultural residues
(less than 1%). Approximately 70% of agricultural emissions are associated with the
crop sector and about 30% with the livestock sector (Figure 1).21
Potential for Additional Reductions.
There is potential to lower carbon,
methane, and nitrous oxide emissions from U.S. agricultural facilities at both crop
and livestock operations through further adoption of certain conservation and land
management practices. In most cases, such practices may both reduce emissions and
sequester carbon in agricultural soils.
Improved Soil Management. Options to reduce nitrous oxide emissions
associated with crop production include improved soil management, more efficient
fertilization, and implementing soil erosion controls and conservation practices. In
the past 100 years, intensive agriculture has caused a soil carbon loss of 30%-50%,
mostly through traditional tillage practices.22 In contrast, conservation tillage
practices preserve soil carbon by maintaining a ground cover after planting and by
reducing soil disturbance compared with traditional cultivation, thereby reducing soil
loss and energy use while maintaining crop yields and quality. Practices include no-
till and minimum, mulch, and ridge tillage. Such tillage practices reduce soil
disturbance, which reduces oxidation and the release of carbon into the atmosphere.
Therefore, conservation tillage practices reduce emissions from cultivation and also
enhance carbon sequestration in soils (discussed later in this report). Nearly 40% of
U.S. planted areas are under some type of conservation tillage practices.23
20 Although carbon is released as well, it is predominantly absorbed again within a year as
part of the cropping cycle, and so is assumed to be net zero emissions unless some goes into
long-term soil carbon content.
21 Previously estimates for the agriculture soil management category were lower. Current
EPA estimates reflect methodological and input data changes.
22 D. C. Reicosky, “Environmental Benefits of Soil Carbon Sequestration,” USDA, at
[http://www.dep.state.pa.us/dep/DEPUTATE/Watermgt/wsm/WSM_TAO/InnovTechFor
um/InnovTechForum-IIE-Reicosky.pdf].
23 USDA, “Conservation Tillage Firmly Planted in U.S. Agriculture,” Agricultural Outlook,
(continued...)

---

CRS-8
Figure 1. Agricultural GHG Emissions, Average 2001-2005
Manure Mgmt
Manure Mgmt
Rice
(CH ) 8%
4
(N O) 2%
2
Cultivation
Ag Residue
(CH ) 1%
4
Burning
(CH , N O)
4
2
<1%
Enteric
Ag Soil Mgmt
Fermentation
(N O) 68%
2
(CH ) 21%
4
Source: EPA, 2007 Inventory report, April 2007, at [http://epa.gov/climatechange/
emissions/usinventoryreport.html].
Improved Manure and Feed Management. Methane emissions associated
with livestock production can be reduced through improved manure and feed
management. Improved manure management is mostly associated with installing
certain manure management systems and technologies that trap emissions, such as
an anaerobic digester24 or lagoon covers. Installing such systems generates other
principal environmental benefits. Installing an anaerobic digester to capture
emissions from livestock operations, for example, would also trap other types of air
emissions, including air pollutants such as ammonia, volatile organic compounds,
hydrogen sulfide, nitrogen oxides, and particulate matter that are regulated under the
federal Clean Air Act. Other benefits include improved water quality through reduced
nutrient runoff from farmlands, which may be regulated under the federal Clean
Water Act.25 Many manure management systems also control flies, produce energy,
increase the fertilizer value of any remaining biosolids, and destroy pathogens and
weed seeds.26
Manure management systems, however, can be costly and difficult to maintain,
given the typically high start-up costs and high annual operating costs. For example,
23 (...continued)
March 2001; USDA, “To Plow or Not to Plow? Balancing Slug Populations With
Environmental Concerns and Soil Health,” Agricultural Research, October 2004;
Conservation Technology Information Center (CTIC), “Conservation Tillage Facts,” at
[http://www.conservationinformation.org/?action=learningcenter_core4_convotill].
24 An enclosed tank that promotes decomposition using anaerobic conditions and naturally
occurring bacteria, while producing biogas as a byproduct that can be used as energy.
25 See CRS Report RL32948, Air Quality Issues and Animal Agriculture: A Primer; and
CRS Report RL31851, Animal Waste and Water Quality: EPA Regulation of Concentrated
Animal Feeding Operations (CAFOs), by Claudia Copeland.
26 R. Pillars, “Farm-based Anaerobic Digesters,” Michigan State University Extension, at
[http://web2.msue.msu.edu/manure/FinalAnearobicDigestionFactsheet.pdf].

---

CRS-9
the initial capital cost of an anaerobic digester with energy recovery is between $0.5
million and $1 million at a large-sized dairy operation, and annual operating costs are
about $36,000. Initial capital costs for a digester at a larger hog operation is about
$250,000, with similar operating costs.27 Upfront capital costs tend to be high
because of site-specific conditions at an individual facility, requiring technical and
engineering expertise. Costs will vary depending on site-specific conditions but may
also vary by production region. Costs may be higher in areas with colder
temperatures, where some types of digesters may not be appropriate or may require
an additional heat source, insulation, or energy requirements to maintain constant,
elevated temperatures.28 Energy requirements to keep a digester heated are likely be
lower in warmer climates.
Incentives are available to assist crop and livestock producers in implementing
practices and installing systems that may reduce GHG emissions. Such incentives
include cost-sharing and also low-interest financing, loan guarantees, and grants, as
well as technical assistance with implementation. Funding for anaerobic digesters at
U.S. livestock operations occurs under various programs under the 2002 farm bill.29
Despite the availability of federal and/or state-level cost-sharing and technical
assistance, adoption of such systems remains low throughout the United States. There
are currently about 100 digester systems in operation or planned at commercial dairy
and hog farms, accounting for about 1% of all operations nationwide (Figure 2).30
Improved feed strategies may also lower methane emissions at livestock
operations. Such strategies may involve adding supplements and nutrients to animal
diets, substituting forage crops for purchased feed grains, or instituting multi-phase
feeding to improve digestive efficiency. Other options involve engineering genetic
improvements in animals.31 Purchasing feed supplements and more intensely
managing animal nutrition and feeding practices may add additional costs and
management requirements at the farm level.
27 EPA, Development Document for the Final Revisions to the NPDES Regulation and the
Effluent Guidelines for Concentrated Animal Feeding Operations, January 2003.
28 C. Henry and R. Koelsch, “What Is an Anaerobic Digester?” University of Nebraska,
Lincoln, at [http://manure.unl.edu/adobe/v7n10_01.pdf]; and Pennsylvania State University,
“Biogas and Anaerobic Digestion,” at [http://www.biogas.psu.edu/]. For optimum operation,
anaerobic digesters must be kept at a constant, elevated temperature, and any rapid changes
in temperature could disrupt bacterial activity.
29 Mostly Section 9006 and Section 6013 of the farm bill (P.L. 107-171), but also under
other farm bill cost-share programs. CRS communication with USDA staff.
30 As of 2005. EPA, AgStar Digest, Winter 2006, at [http://www.epa.gov/agstar/].
31 R. A. Leng, “Quantitative Ruminant Nutrition — A Green Science,” Australian Journal
of Agricultural Research, 44: 363-380; H. Steinfeld, C. de Haan, and H. Blackburn,
Livestock-Environment Interactions, Issues and Options, chapter 3 (study commissioned by
the Commission of the European Communities, United Nations, and World Bank), at
[http://www.virtualcentre.org/es/dec/toolbox/FAO/Summary/index.htm].

---

CRS-10
Figure 2. National Distribution of Anaerobic Digester
Energy Production, Operating and Planned
Source: Adapted by CRS, Map Resources (7/2007) from data reported by USEPA,
AgStar Digest, Winter 2006.
Agricultural Carbon Sinks
Carbon Loss and Uptake. Agriculture can sequester carbon, which may
offset GHG emissions by capturing and storing carbon in agricultural soils. On
agricultural lands, carbon can enter the soil through roots, litter, harvest residues, and
animal manure, and may be stored primarily as soil organic matter (SOM; see Figure
3).32 Soils can hold carbon both underground in the root structure and near the soil
surface and in plant biomass. Loss of soil carbon may occur with shifts in land use,
with conventional cultivation (which may increase oxidation), and through soil
erosion. Carbon sequestration in agricultural soils can be an important component
of a climate change mitigation strategy, since the capture and storage of carbon may
limit the release of carbon from the soil to the atmosphere.
Voluntary land retirement programs and programs that convert or restore
grasslands and wetlands promote carbon capture and storage in agricultural soils.
Related practices include afforestation (including the conversion of pastureland and
cropland), reforestation, and agro-forestry practices. Conservation practices that raise
biomass retention in soils and/or reduce soil disturbance, such as conservation tillage
and/or installing windbreaks and buffers, also promote sequestration. More detailed
32 U.S. Geological Survey (USGS), “Carbon Sequestration in Soils,” at [http://edcintl.cr.
usgs.gov/carbonoverview.html].

---

CRS-11
information is provided in the following section, “Mitigation Strategies in the
Agriculture Sector.”
Figure 3. Carbon Sequestration in
Agricultural Soils
Source: USGS, “Carbon Sequestration in Soils,” at
[http://edcintl.cr.usgs.gov/carbonoverview.html].
SOM = Soil organic matter
Total Carbon Sequestration. In 2005, carbon sequestration by agricultural
soils was estimated at about 30 MMTCO -Eq.33 Compared to estimates for the most
2
recent five-year average, as well as estimates for 1995 and 2000, recent data show
possible gains in carbon uptake and storage in recent years (Table 1).
The agriculture and forestry sectors are a small part of the overall carbon
sequestration debate. Carbon sequestration by these sectors is usually referred to as
indirect or biological sequestration.34 Biological sequestration is considered to have
less potential for carbon sequestration than direct sequestration, also referred to as
carbon capture and storage, and is typically associated with oil and gas production.
Estimated Emission Offsets. Carbon sequestration in the U.S. agriculture
sector currently offsets only about 5% of the carbon-equivalent of reported GHG
emissions generated by the agriculture sector each year. Thus the sector remains a
net source of GHG emissions. Compared to total national GHG emissions, the
33 EPA’s 2007 Inventory, Table 2-14 and Table 7-1. Based on estimates for the following
categories: land converted to grassland; grassland remaining grassland; land converted to
cropland; cropland remaining cropland.
34 Congressional Budget Office (CBO), The Potential for Carbon Sequestration in the
United States, Sept. 2007, at [http://www.cbo.gov/ftpdocs/86xx/doc8624/09-12-Carbon
Sequestration.pdf]. Biological sequestration refers to the use of land to enhance its ability
to uptake carbon from atmosphere through plants and soils. Direct sequestration refers to
capturing carbon at its source and storing it before its release to the atmosphere. Examples
include capture and storage in geologic formations, such as oil fields, natural gas fields, coal
seams, and deep saline formations. See CRS Report RL33801, Direct Carbon Sequestration:
Capturing and Storing CO , by Peter Folger.
2

---

CRS-12
agriculture sector offsets well under 1% of emissions annually. It should be noted
that these estimates do not include estimates for the forestry sector, or sequestration
activities on forested lands or open areas that may be affiliated with the agriculture
sector. Forests and trees account for a majority (about 95%) of all estimated carbon
uptake in the United States, mostly through forest restoration and tree-planting.35
Carbon uptake in soils on U.S. agricultural lands accounts for the bulk of the
remainder.
Uncertainty Estimating Carbon Sinks. EPA’s Inventory estimates of
carbon uptake in agricultural soils are based on annual data and information on
cropland conversion to permanent pastures and grasslands, reduced summer fallow
areas in semi-dry areas, increased conservation tillage, and increased organic
fertilizer use (e.g, manure) on farmlands, as well as information on adoption rates and
use of certain conservation and land management practices.
However, actual carbon uptake in agricultural soils depends on several site-
specific factors, including location, climate, land history, soil type, type of crop or
vegetation, planting area, tillage practices, crop rotations and cover crops, and farm
management in implementing certain conservation and land management practices.
Estimates of the amount of carbon sequestered may vary depending on the amount
of site-specific information included in the estimate, as well as on the accounting
procedures and methodology used to make such calculations.
In general, the effectiveness of adopting conservation and land management
practices will depend on the type of practice, how well the practice is implemented,
and also on the length of time a practice is undertaken. For example, time is needed
for a certain conservation practice to take hold and for benefits to accrue, such as
buildup of carbon in soils from implementing conservation tillage or other soil
management techniques, and growing time for cover crops or vegetative buffers. The
overall length of time the practice remains in place is critical, especially regarding the
sequestration benefits that accrue over the time period in which land is retired. In
addition, not all conservation and land management practices are equally effective
or appropriate in all types of physical settings. For example, the use and
effectiveness of conservation tillage practices will vary depending on soil type and
moisture regime, which may discourage some farmers from adopting or continuing
this practice in some areas.
The potential impermanence of conservation and land management practices
raises concerns about the effectiveness and limited storage value of the types of
conservation practices that sequester carbon, given that the amount of carbon stored
depends on the willingness of landowners to adopt or continue to implement a
particular voluntary conservation practice. There are also concerns that the addition
of other conservation practices may not significantly enhance the sequestration
35 EPA’s 2007 Inventory, Table 2-14 and Table 7-1. Based on estimates for the following
categories: forestland remaining forestland; and growth in urban trees. Other uptake not
included in the estimates is from landfilled yard trimmings.

---

CRS-13
potential of practices that might already be in place.36 This raises questions about the
cost-effectiveness of sequestering carbon on farmlands relative to other climate
change mitigation strategies in other industry sectors. Finally, implementing
conservation practices and installing new technologies may be contingent on
continued cost-sharing and other financial incentives contained in the current farm
bill; programs funded through this legislation help offset the cost to farmers for these
practices and technologies, which some farmers may not be willing to do otherwise.
Potential for Additional Uptake. USDA reports that the potential for carbon
uptake in agricultural soils is much greater than current rates. USDA forecasts that
the amount of carbon sequestered on U.S. agricultural lands will more than double
from current levels by 2012, adding roughly an additional 40 MMTCO -Eq. of
2
sequestered carbon attributable to the sector.37 This additional uptake is expected
through improved soil management (roughly 60%), improved manure and nutrient
management (about 30%), and additional land-retirement sign-ups (about 10%).
Other longer-term estimates from USDA report that the potential for net
increases in carbon sequestration in the agriculture sector could range from 40 to 590
MMTCO -Eq. per year, or roughly 2-20 times current levels.38 Afforestation, or the
2
creation of forested areas mostly through conversion of pastureland and cropland,
reflects the majority of the estimated uptake potential, with agricultural soil carbon
sequestration accounting for a smaller share at the high end of this estimated range.
Comparable estimates reported by EPA forecast a higher sequestration potential for
the U.S. agriculture sector, ranging from 160 to 990 MMTCO -Eq. per year.39 EPA
2
also reports additional sequestration potential from livestock manure management,
biofuels substitution, and forest land management. Estimates from various studies
may differ depending on the extent that estimates may include sequestration activities
in the forestry sector. Combined, the potential carbon uptake from both the
agriculture and forestry sectors is estimated from 800 to 1,200 MMTCO -Eq. per
2
year.40
An additional carbon uptake potential of 590 to 990 MMTCO -Eq. per year
2
would more than offset the agriculture sector’s annual GHG emissions, or offset 8%
to 14% of total current national emissions from all sources. Currently, carbon uptake
36 See, for example, T. A. Butt and B. A. McCarl, “Implications of Carbon Sequestration for
Landowners,” 2005 Journal of the American Society of Farm Managers and Rural
Appraisers; Government Accountability Office (GAO), Conservation Reserve Program:
Cost-Effectiveness Is Uncertain, March 1993; H. Feng, J. Zhao, and C. Kling, “Carbon: The
Next Big Cash Crop,” Choices, 2nd quarter 2001; and H. Feng, C. Kling, and P. Glassman,
“Carbon Sequestration, Co-Benefits, and Conservation Programs,” Choices, Fall 2004.
37 W. Hohenstein, “USDA Activities to Address Greenhouse Gases and Carbon
Sequestration,” presentation to Senate Energy Committee staff, February 15, 2007.
38 USDA, Economics of Sequestering Carbon in the U.S. Agricultural Sector, April 2004.
39 EPA, Greenhouse Gas Mitigation Potential in U.S. Forestry and Agriculture, Tables 4-10
and 4-5, Nov. 2005, at [http://www.epa.gov/sequestration/greenhouse_gas.html].
40 As summarized by CBO, The Potential for Carbon Sequestration in the United States,
Sept. 2007, at [http://www.cbo.gov/ftpdocs/86xx/doc8624/09-12-CarbonSequestration.pdf].

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CRS-14
in agricultural soils sequesters under 1% of total national GHG emissions annually
(Table 1). An estimated 11% of all GHG emissions are currently sequestered
annually, with the bulk sequestered through growth in forest stocks.
Per-Unit Value Estimates. Compared to other mitigation options in other
sectors, USDA reports that U.S. agriculture can provide low-cost opportunities to
sequester additional carbon in soils and biomass. The estimated per-unit value (or
cost) of carbon removed or sequestered, expressed on a dollar per metric ton (mt) of
carbon basis, will vary depending on the type of practice. Actual per-unit values and
the cost-effectiveness of different practices may vary considerably from site to site.
USDA’s estimate of an additional carbon uptake potential of 40 to 590
MMTCO -Eq. per year is associated with a range of costs from about $3/mt to
2
$35/mt of permanently sequestered carbon dioxide (Table 2).41 The low end of this
range reflects the sequestration potential associated with cropland management
practices; higher-end values are associated with land retirement and conversion, and
a longer sequestration tenure. USDA’s report also notes that if producers discontinue
the land and cropland management practices at the end of a typical contract period,
the carbon sequestered may only be worth a small share of its overall program costs,
because most of the carbon will be released when these practices are terminated,
which may lower the cost-effectiveness of such programs. EPA’s forecast of an
additional sequestration potential for the agriculture sector of 160 to 990 MMTCO -
2
Eq. per year are estimated across a range of $5/mt-$30/mt of sequestered carbon
dioxide.42 The low end of this range is associated with sequestration in agricultural
soils and with soil management practices; high-end values are associated with
afforestation, or converting open land into a forest by planting trees or their seeds.
Table 2. Carbon Sequestration Potential in the U.S. Agriculture
Sector, Alternative Scenarios and Payment Levels
(dollars per million metric ton of sequestered CO )
2
Source
$3-5 range
$14-15 range
$30-34 range
(million mt of sequestered CO )
2
USDA Estimate
Afforestation
0 - 31
105 - 264
224 - 489
Agricultural soil carbon sequestration
0.4 - 4
3 - 30
13 - 95
Total
0.4 - 35
108 - 295
237 - 587
EPA Estimate
Afforestation
12
228
806
Agricultural soil carbon sequestration
149
204
187
Total
161
432
994
Sources: EPA, Greenhouse Gas Mitigation Potential in U.S. Forestry and Agriculture, Nov. 2005,
Table 4-10, at [http://www.epa.gov/sequestration/greenhouse_gas.html]. Compares USDA estimates
(Economics of Sequestering Carbon in the U.S. Agricultural Sector, Apr. 2004) with EPA estimates.
41 USDA, Economics of Sequestering Carbon in the U.S. Agricultural Sector, April 2004
(measured by the amount of carbon sequestered over a 15-year time period across a range
of costs). USDA estimates that the associated total cost to sequester carbon across this
range is $0.95 billion to $2 billion per year.
42 EPA, Greenhouse Gas Mitigation Potential in U.S. Forestry and Agriculture, Table 4-10.

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CRS-15
Enhancing Carbon Sinks. There is potential to increase the amount of
carbon captured and stored in U.S. agricultural lands by adopting certain
conservation and land management practices. In most cases, such practices may both
sequester carbon in farmland soils and reduce emissions from the source. Table 3
shows estimated representative carbon sequestration rates for agricultural practices.
Table 3. Representative Carbon Sequestration Rates
Type of land Management System
Sequestration Rate
(mt CO /acre/year)
2
Afforestation
2.2 - 9.5
Reforestation
1.1 - 7.7
Reduced tillage (e.g., no-till, reduced-till)
0.6 - 1.1
Change in grassland management
0.07 - 1.9
Cropland conversion to grassland
0.9 - 1.9
Riparian buffers (nonforest)
0.4 - 1.0
Biofuel substitution for fossil fules
4.8 - 5.5
Source: Compiled by EPA, Greenhouse Gas Mitigation Potential in U.S. Forestry and Agriculture,
Table 2-1, Nov. 2005, at [http://www.epa.gov/sequestration/greenhouse_gas.html]. Saturation rates
and duration periods apply. EPA’s report provides a list of the original source citations.
Improved Soil and Land Management. The main carbon sinks in the
agriculture sector are cropland conversion and soil management, including improved
manure application.43 More than half of all carbon sequestered on U.S. agricultural
lands is through voluntary land retirement programs and programs that convert or
restore land (e.g., conversion to open land or grasslands, conversion to cropland,
restoration of grasslands or wetlands, etc.). Undisturbed open lands, grasslands and
wetlands can hold carbon in the soil both underground in the root structure and above
ground in plant biomass. The amount of carbon sequestered will vary by the type of
land management system. Afforestation and cropland conversion have the greatest
potential to store the most carbon per acre annually, compared with other types of
systems, such as tree plantings and wetlands conversion, or storage in croplands.44
Conservation tillage is another major source of sequestration on farmlands,
accounting for about 40% of the carbon sequestered by the U.S. agriculture sector.45
Improved tillage practices improve biomass retention in soils and reduce soil
disturbance, thereby decreasing oxidation. The amount of carbon sequestered will
vary by the type of tillage system: reduced tillage stores between 0.6-1.1 mt of carbon
dioxide per acre annually (Table 3). Among conservation tillage practices, no-till
43 USDA, U.S. Agriculture and Forestry Greenhouse Gas Inventory: 1990-2001, TB1907,
Figure 3-8, March 2004, at [http://www.usda.gov/oce/global_change/gg_inventory.htm].
44 Bongen, A.,”Using Agricultural Land for Carbon Sequestration,” Purdue University, at
[http://www.agry.purdue.edu/soils/Csequest.PDF]. 1999 data for carbon storage in Indiana.
45 USDA, U.S. Agriculture and Forestry Greenhouse Gas Inventory: 1990-2001, TB1907,
March 2004, at [http://www.usda.gov/oce/global_change/gg_inventory.htm]; USDA,
“Depositing Carbon in the Bank: The Soil Bank, That Is,” Agricultural Research, Feb. 2001.

---

CRS-16
stores about 30% more than the amount of carbon stored by reduced tillage but more
than five times that stored on intensive tilled croplands. (Conservation tillage
practices are explained above, in the section on “Potential for Additional
Reductions”).
Improved Manure and Feed Management. Mitigation strategies at U.S.
livestock operations are not commonly associated with carbon uptake and are not
included in EPA’s carbon sink estimates. However, installing manure management
systems, such as an anaerobic digester, captures and/or destroys methane emissions
from livestock operations and may be regarded as avoided emissions or as a form of
direct sequestration capturing emissions at the source. As a result, some carbon offset
programs are beginning to promote manure management systems as a means to
capture and store methane at dairy operations, which may also be sold as carbon
offset credits and as a renewable energy source.46 Given that there are currently few
anaerobic digesters in operation, estimates of the actual or potential uptake may be
difficult to estimate. (Manure management systems are further explained above, in
the section on “Potential for Additional Reductions.”)
Mitigation Strategies in the Agriculture Sector
Existing conservation and farmland management programs administered at both
the federal and state levels often encourage the types of agricultural practices that can
reduce GHG emissions and/or sequester carbon. These include conservation,
forestry, energy, and rural development programs within existing farm legislation.
These programs were initiated predominantly for other production or environmental
purposes. Currently, few federal programs specifically address climate change
concerns in the agriculture sector. However, some USDA and state-level
conservation programs have started to place additional attention on the potential for
emissions reduction and carbon sequestration.
Agricultural conservation and other farmland practices broadly include land
management, vegetation, and structures that can reduce GHG emissions and/or
sequester carbon in the agriculture sector, such as:
! land retirement, conversion, and restoration programs (e.g.,
conversion to grasslands, restoration of grasslands or wetlands, etc.);
! soil conservation practices, including conservation tillage (e.g.,
reduced/medium- till, no/strip-till, ridge-till);
! soil management and soil erosion controls;
! precision agriculture practices and recognized agricultural best
management practices;
! efficient fertilizer/nutrient (including manure) and chemical
application;
! crop rotations;
! cover cropping;
46 See Iowa Farm Bureau’s carbon credit project at [http://www.iowafarmbureau.com].

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CRS-17
! manure management (e.g., improve manure storage and technologies
using anaerobic digestion and methane recovery);
! feed management (e.g., improve feed efficiency, dietary
supplements);
! rotational grazing and improved forage/grazing management;
! vegetative and riparian buffers, and setbacks;
! windbreaks for crops and livestock;
! bioenergy and biofuels substitution and renewable energy use (e.g.,
replacing use of fossil fuels); and
! energy efficiency and energy conservation on-farm.
Conservation programs administered by USDA and state agencies encourage
farmers to implement certain farming practices and often provide financial incentives
and technical assistance to support adoption. Participation in these programs is
voluntary, and farmers may choose to discontinue participating in these programs.
Also, as previously noted, the effectiveness of these practices depends on the type of
practice, how well the practice is implemented, and also on the length of time a
practice is undertaken.
The fact that the types of conservation and land management practices being
promoted under existing agricultural conservation programs may also lower GHG
emissions and increase carbon uptake in agricultural soils should be regarded as an
incidental benefit of these programs. With few exceptions, these types of
conservation and land management programs were not initiated for the purpose of
reducing GHG emission or sequestering carbon, and the eligibility requirements
under these programs do not explicitly require emissions reductions or carbon
sequestration as objectives or selection criteria for participation. These programs are
generally designed to address site-specific improvements based on a conservation
plan developed with the assistance of USDA or state extension technical and field
staff that considers the goals and land resource base for an individual farmer or
landowner. Such a conservation plan is typically a necessary precursor to
participating in USDA’s conservation programs.
Federal Programs
Conservation Programs. Conservation programs administered by USDA
are designed to take land out of production and to improve land management
practices on land in production, commonly referred to as “working lands” (Table 4).
! Land retirement/easement programs. Programs focused on land
management, including programs that retire farmland from crop
production and convert it back into forests, grasslands, or wetlands,
including rental payments and cost-sharing to establish longer term
conservation coverage. Major programs include the Conservation
Reserve Program (CRP), the Wetlands Reserve Program (WRP), the
Grasslands Reserve Program (GRP), the Farmland Protection
Program (FPP), among other programs.

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CRS-18
Table 4. Conservation and Land Management Practices
USDA
Conservation Practice and
Benefits for Climate
Program
Land Management
General Benefits
Change
Conservation tillage and reduced field
Improves soil/water/air quality.
Sequestration,
pass intensity
Reduces soil erosion/fuel use.
emission reduction
EQIP,
Crop diversity through crop rotations
Reduces erosion/water needs.
Sequestration
CSP,
and cover cropping
Improves soil/water quality.
AMA
Efficient nutrient (nitrogen)
Improves water quality. Saves
Sequestration,
management, fertilizer application
expenses, time, and labor.
emission reduction
Improved soil management and soil
Improves soil/water/air quality.
Sequestration,
erosion controls
emission reduction
EQIP
Manure management (e.g.,
Improves soil/water/air quality.
Emission reduction
CSP
storage/containment, anaerobic
On-farm fuel cost-savings.
AMA
digestion and methane recovery)
Alternative income source.
Othera
Nutrients for crops.
Feed management (e.g., raise feed
Improves water/air quality. More
Emission reduction
EQIP
efficiency, dietary supplements)
efficient use of feed.
CSP
AMA
Rangeland management (e.g.,
Reduces water requirements.
Sequestration,
rotational grazing, improved forage)
Helps withstand drought. Raises
emission reduction
grassland productivity.
EQIP
Windbreaks for crops and livestock,
Improves crop/livestock protection
Sequestration,
CSP
vegetative/riparian buffers, grassed
and wildlife habitat. Alternative
emission reduction
AMA
waterways, setbacks, etc.
income source (e.g., hunting fees).
WHIP
FLEP
Agroforestry / silvopasture with
Provides income from grazing and
Sequestration,
EQIP
rotational grazing and improved
wood products.
emission reduction
CSP
forage
AMA
CRP
Land management, including
Improves soil/water/air quality.
Sequestration
WRP
retirement, conversion, restoration
GRP
(cropland, grasslands, wetlands, open
FPP
space)
EQIP
Energy efficiency/conservation
Improves soil/water/air quality.
Emission reduction
CSP
Cost-savings.
AMA
Othera
Biofuel substitution and renewable
Improves soil/water/air quality.
Emission reduction
energy use
On-farm fuel cost-savings.
Alternative income source.
Source: Compiled by CRS staff from USDA and EPA information. Listed programs: Conservation Reserve Program
(CRP), Wetlands Reserve Program (WRP), Grasslands Reserve Program (GRP), Farmland Protection Program (FPP),
Environmental Quality Incentives Program (EQIP), Conservation Security Program (CSP), Agricultural Management
Assistance (AMA), Wildlife Habitat Incentives Program (WHIP), and Forest Land Enhancement Program (FLEP).
a. Renewable energy projects receive additional program funding in farm bill under Title IX (Energy) and Title VI
(Rural Development), as well as other federal and state program.

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CRS-19
! Working lands programs. Programs focused on improved land
management and farm production practices, such as changing
cropping systems or tillage management practices, are supported by
cost-sharing and incentive payments, as well as technical assistance.
Major programs include the Environmental Quality Incentives
Program (EQIP), the Conservation Security Program (CSP), the
Agricultural Management Assistance (AMA) program, and the
Wildlife Habitat Incentives Program (WHIP).
These programs are provided for in Title II (Conservation) of the 2002 farm bill.
Recent legislative action to reauthorize the farm bill in the 110th Congress seeks to
expand authority and funding for these conservation programs.47
Total funding for USDA’s conservation and land management programs totaled
$5.6 billion in FY2005. Voluntary land retirement programs and programs that
convert or restore land account for roughly 37% annually of all USDA conservation
spending (Figure 4). Programs that provide cost-sharing and technical assistance to
farmers to implement certain practices, such as EQIP, CSP, and AMA, provide
another 21% annually.48 USDA’s conservation technical assistance and extension
services account for about one-fourth of all funding. Other federal funding through
other programs also generally promotes natural resource protection on U.S. farms.
Generally, the decision on how and where this funding is ultimately used is made at
the individual state level.
Figure 4. USDA Conservation Spending, FY2005
Technical
Data & Research
Assistance,
11%
Extension,
Administration
26%
Rent &
Easements
37%
Cost Share
Public Works &
21%
Emergency
Payments 5%
Source: USDA, Office of Budget and Planning.
Note: FY2005 total spending = $5.6 billion.
47 For a list of the USDA programs, see USDA, “Farm Bill, Title II: Conservation,” at
[http://www.ers.usda.gov/Features/Farmbill/titles/titleIIconservation.htm]. Also see CRS
Report RL34060, Conservation and the 2007 Farm Bill, by Jeffrey A. Zinn.
48 EQIP and CSP were originally set to expire in FY2007 with most farm bill programs, but
were extended in the most recent budget reconciliation (P.L. 109-171). EQIP, the largest
program, is authorized through FY2010 and will reach $1.3 billion annually.

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CRS-20
Currently, few USDA conservation programs are specifically intended to
address climate change concerns in the agriculture sector. One exception is USDA’s
Conservation Innovation Grants program, a subprogram under EQIP that provides
for competitive awards, and is intended to accelerate technology transfer and
adoption of innovative conservation technologies, mostly through pilot projects and
field trials. However, recently USDA has started to explore the possibility of
expanding some of its farmland conservation programs to focus more broadly on the
potential for GHG emission reductions and carbon sequestration.49 Past grants have
supported development of approaches to reduce ammonia emissions from poultry
litter, promote conservation tillage and solar energy technologies, and develop private
carbon sequestration trading credits.50
USDA has identified three of its existing conservation programs that encourage
greenhouse gas reductions and carbon sequestration. These include CRP, EQIP, and
CSP.51 Under EQIP and CSP, many of the practices encouraged under the program
reduce net GHG emissions. For EQIP, USDA is providing additional national
guidance to technical staff to make GHG a priority resource concern as part of its
ranking system and scoring criteria for participation. Examples include giving
greater weight to projects that promote anaerobic digestion, nutrient management
plans, and other types of cropland practices, such as installing shelter belts and
windbreaks, and encouraging conservation tillage. Resources also are available for
biomass energy projects.
Under CRP, USDA has issued a new rule that explicitly allows the private sale
of carbon credits for land enrolled in the program. USDA also has modified its
“Environmental Benefits Index” to score and rank offers to enroll land in CRP in a
way that places greater weight on installing vegetative covers that sequester more
carbon. USDA also has announced a program under CRP’s continuous enrollment
provision to plant up to 500,000 acres of bottomland hardwoods, which are among
the most productive U.S. lands for sequestering carbon.
USDA continues to evaluate how to better incorporate climate concerns into its
conservation programs. One potential option includes modifying its evaluation
criteria for ranking applications for its conservation programs by giving additional
consideration to projects that propose to reduce GHG emissions or sequester carbon,
as USDA has done with EQIP. Other possible options include supporting market-
based approaches, such as the development of environmental services markets and
trading, that might supplement existing conservation and forestry programs.52
49 USDA, “USDA Targeted Incentives for Greenhouse Gas Sequestration,” Release No.
0194.03, June 6, 2003.
50 USDA, “Reducing Agricultural Greenhouse Gas Emissions Through Voluntary Action,”
Statement by Bruce Knight of USDA’s Natural Resources Conservation Service at the
United Nations Framework Convention on Climate Change, December 2004, at
[http://www.nrcs.usda.gov/news/speeches04/climatechange.html]
51 W. Hohenstein, “USDA Conservation Programs are Targeting Greenhouse Gases and
Carbon Sequestration.” Provided to Senate Energy Committee staff, February 15, 2007.
52 USDA, USDA’s 2007 Farm Bill Proposals, Conservation Title, January 31, 2007, at
[http://www.usda.gov/documents/07title2.pdf]; statement by Mark Rey, USDA Under
(continued...)

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CRS-21
USDA participates in several ongoing federal interagency initiatives intended
to address climate change concerns. For example, USDA participates in a multi-
agency research and development program for climate change technology, as part of
the U.S. National Climate Change Technology Initiative.53 It also has developed new
GHG reporting guidelines for forestry and agriculture for use in the 1605(b)
Voluntary Greenhouse Gas Registry.54 USDA also participates in the multi-agency
Climate Change Science Program, integrating federal research on climate and global
change across 13 federal agencies, including USDA.55
Other Farm Programs. In addition to farm conservation programs, other
programs may also encourage the types of agricultural practices that can reduce GHG
emissions and/or sequester carbon. These include forestry, energy, and rural
development programs provided for under existing farm legislation.
Forestry programs are administered by USDA’s Forest Service; many of these
programs are provided for in Title VIII (Forestry) of the farm bill. Typically,
however, there is often little overlap between the various agriculture and forestry
programs administered by USDA, and few forestry programs provide support to
agricultural enterprises. One exception is the Forest Service’s Forest Land
Enhancement Program (FLEP), which has an agroforestry component that provides
funding for agriculture and silvopasture practices with rotational grazing and
improved forage. Funding for agroforestry activities under this program constitutes
a small share of total FLEP funding.56 (Recent legislative action to reauthorize the
farm bill in the 110th Congress would implement changes to existing forestry
programs and allow FLEP to expire.57) Another program is USDA’s agriculture
conservation programs also include its Healthy Forests Reserve Program, which has
an agroforestry component, but program funding is usually limited to a few states.
52 (...continued)
Secretary for Natural Resources and Environment, at USDA’s 2007 Outlook Forum, March
2, Arlington, VA; statement by USDA staff at the 4th USDA Greenhouse Gas Conference,
February 6, Baltimore MD.
53 Established in 2001, the program conducts multi-agency review of the federal R&D
portfolio. The program is under the direction of the U.S. Department of Energy, in
coordination with the U.S. Department of Commerce [http://www.climatetechnology.gov/].
See CRS Report RL33817, Climate Change: Federal Expenditures, by Jane Leggett.
54 A voluntary reporting program for companies to record their GHG emissions reductions.
The program is administered by the Department of Energy and was created by section 1605b
of the Energy Policy Act of 1992.
55 Established in February 2002, the program is a collaborative interagency program,
designed to improve the government-wide management of climate science and climate-
related technology development; see [http://www.climatescience.gov/]. See CRS Report
RL33817, Climate Change: Federal Expenditures, by Jane Leggett.
56 Primary efforts under FLEP are afforestation and reforestation, improved forest stand,
constructing windbreaks, and riparian forest buffers.
57 For information on USDA forestry programs, see CRS Report RL33917, Forestry in the
2007 Farm Bill, by Ross W. Gorte.

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Renewable energy projects receive additional program funding across three farm
bill titles: Title II (Conservation), Title IX (Energy), and Title VI (Rural
Development). Other funding is also available through other federal programs.58 In
addition to cost-sharing provided under USDA’s conservation programs, two
important programs in the farm bill are under Title IX (Section 9006, Renewable
Energy Systems and Energy Efficiency Improvements) and Title VI (Section 6013,
Loans and Loan Guarantees for Renewable Energy Systems).
! Section 9006. Authorizes loans, loan guarantees, and grants to
farmers, ranchers, and rural small businesses to purchase renewable
energy systems and make energy efficiency improvements.
! Section 6013. Authorizes the rural development business and
industry program to make loans and loan guarantees for renewable
energy systems, including wind energy systems and anaerobic
digesters.
Funding through these two programs, along with that of other cost-share
programs, account for the majority of federal program spending to support
construction of anaerobic digesters in the livestock sector.59 Limited information
indicates that USDA funded eight projects totaling more than $60 million under
Section 601360 and provided another $20 million in funding assistance under Section
600961 for anaerobic digesters (FY2002-FY2005).
State Programs
State-level agriculture conservation and land management programs are
available to farmers in most states, and operate in much the same manner as federal
conservation programs. These programs may also provide financial and technical
assistance to farmers to implement certain practices, using additional state resources
and in consultation with state agriculture agencies and extension staff. No single
current compendium exists outlining the different types of agriculture conservation
programs across all states; instead information is available through individual state
government websites.62
Many states have cost-share programs that provide financial assistance to
landowners to implement practices that benefit a state’s forests, fish, and wildlife.
58 See CRS Report RL34130, Renewable Energy Policy in the 2007 Farm Bill, and CRS
Report RL32712, Agriculture-Based Renewable Energy Production, both by Randy
Schnepf; and CRS Report RL33572, Biofuels Incentives: A Summary of Federal Programs,
by Brent Yacobucci.
59 CRS communication with USDA staff, February 8, 2007.
60 USDA, “Farm Bill Forum: Rural Development Title,” March 2006, at [http://www.usda.
gov/documents/RURAL_DEVELOPMENT_TITLE.pdf].
61 USDA, “USDA Funding Assistance for Rural Renewable Energy and Energy Efficiency:
Section 9006 of the 2002 Farm Bill,” at [http://power.wisconsin.gov/pdf/USDA
Presentation.pdf].
62 State and Local Government directory at [http://www.statelocalgov.net/index.cfm].

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CRS-23
Many of these programs provide technical assistance and up to 75% of the eligible
costs of approved conservation projects to qualified landowners. Several states also
provide low-interest financing to farmers and landowners to encourage conservation
practices or to implement best management practices for the agriculture sector. Many
states also have buffer strip programs, which may provide rental payments to
landowners who agree to create or maintain vegetative buffer strips on croplands near
rivers, streams, ponds, and wetlands. Typically states that have taxing authority for
conservation purposes, such as Nebraska, Missouri, and Oregon, tend to have more
stable funding and staffing to support conservation improvements.
The Pew Center on Global Climate Change has identified several ongoing state
programs and demonstration projects specifically intended to promote carbon storage
and emissions reduction in the U.S. agriculture sector.63 For example, several states,
including Oregon, Wisconsin, Vermont, and North Carolina, are promoting methane
recovery and biofuels generation from livestock waste. A program in Iowa is
providing support and funding to promote switchgrass as a biomass energy crop. In
Maryland, income tax credits are provided for the production and sale of electricity
from certain biomass combustion. Georgia has a program that leases no-till
equipment to farmers. In addition, several states, including Nebraska, Oklahoma,
Wyoming, North Dakota, and Illinois, have formed advisory committees to
investigate the potential for state carbon sequestration. In California, an accounting
program is being developed to track possible future costs to mitigate GHG emissions
in the U.S. agriculture sector.
An even greater number of state programs and initiatives are geared toward
climate change mitigation strategies in sectors other than agriculture.64 For example,
many of California’s programs support the state’s recently enacted emission
reductions legislation.65 California’s climate change statute requires state agencies
to identify GHG emissions reduction strategies that can be pursued before most of
the law takes effect in 2012. The state has identified several agriculture sector
strategies that it plans to consider as early actions, including (1) adopting a manure
digester protocol for calculating GHG mitigation; (2) establishing collaborative
research on how to reduce GHG emissions from nitrogen land application; (3)
replacing stationary diesel agricultural engines with electric motors; and (4)
evaluating potential measures for enclosed dairy barns, modified feed management,
and manure removal strategies to reduce methane emissions at dairies.66 These early
action strategies would be in addition to funding for the state’s manure digester cost-
63 Pew Center, Learning from State Action on Climate Change, Nov. 2005, [http://www.
climatechange.ca.gov/climate_action_team/reports/2005-12-08_PEW_CENTER_REPO
RT.PDF].
64 See CRS Report RL33812, Climate Change: Actions by States to Address Greenhouse
Gas Emissions, by Jonathan L. Ramseur.
65 California’s Global Warming Solutions Act of 2006 (AB 32), which was enacted in
September 2006, codified the state’s goal of requiring California’s GHG emissions be
reduced to 1990 levels by 2020.
66 California Environmental Protection Agency, Expanded List of Early Action Measures
to Reduce Greenhouse Gas Emissions in California Recommended for Board Consideration,
Oct. 2007, at [http://www.arb.ca.gov/cc/ccea/meetings/ea_final_report.pdf].

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CRS-24
share program and other agriculture projects, including carbon sequestration projects
involving rice straw utilization, energy and water conservation, biofuels support, soil
management, and other types of renewable energy and manure management programs
for dairies.67
Other Programs and Incentives
The voluntary carbon offset market allows businesses, interest groups, and
individuals the opportunity to purchase carbon credits generated from projects that
either prevent or reduce an amount of carbon entering the atmosphere, or that capture
carbon from the atmosphere. Companies and individuals purchase carbon credits for
varied reasons. For example, some may purchase credits to reduce their “carbon
footprint,” using credits to offset all or part of a GHG-emitting activity (e.g., air
travel, corporate events, or personal automobile use); others may purchase credits to
bank the reductions in anticipation of a mandatory GHG reduction program.68 In the
United States, the current offset framework operates on a voluntary basis since there
is no federal requirement that GHG emissions be curtailed. Some states and/or
regional GHG reduction initiatives may limit the use of carbon offsets.
Several states have programs that support the voluntary carbon offset exchange,
often involving U.S. farmers and private landowners. One program operated by the
Iowa Farm Bureau involves more than 1,400 producers in 12 states (mostly Iowa,
Kansas, and Nebraska, but also Illinois, Ohio, Michigan, Wisconsin, Minnesota,
South Dakota, Missouri, Indiana, and Kentucky),69 whose carbon credits may be sold
on the Chicago Climate Exchange.70 Similar types of programs also have been
initiated in North Dakota (operated by the North Dakota Farmers Union), Illinois
(Illinois Conservation and Climate Initiative), Indiana (Environmental Credit
Corporation), and the Northwest (Upper Columbia Resource Conservation and
Development Council). Another, Terrapass, has among its projects two large-scale
dairy farms that use anaerobic digesters and methane capture for energy production.71
67 California Climate Change Portal, “State of California Agencies’ Roles in Climate Change
Activities,” at [http://climatechange.ca.gov/policies/state_roles.html#dfg].
68 For additional general information on voluntary carbon markets, see CRS Report
RL34241, Voluntary Carbon Offsets: Overview and Assessment, by Jonathan L. Ramseur.
For trading purposes, one carbon credit is considered equivalent to one metric ton of carbon
dioxide emission reduced.
69 Iowa Farm Bureau, Carbon Credit Aggregation Pilot Project, at [http://www.
iowafarmbureau.com/special/carbon/]; CRS staff communication with Iowa Farm Bureau
staff, January 2007.
70 The Exchange is a voluntary, self-regulated, rules-based exchange. Its emission offset
program constitutes a small part of its overall program, which includes methane destruction,
carbon sequestration, and renewable energy. See [http://www.chicagoclimatex.com/].
71 For more information, see North Dakota Farmers Union [http://www.ndfu.org], Illinois
Conservation and Climate Initiative [http://www.illinoisclimate.org], Environmental Credit
Corporation [http://www.envcc.com]; and Terrapass [http://www.terrapass.com/projects].

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CRS-25
Current estimates indicate that farmer participation in voluntary carbon credit
trading programs involves a reported 2,000 farmers across 15 states covering more
than 1 million acres. Farm-based offset programs generally cover some or all aspects
of the following types of carbon capture and storage activities: sustainable agriculture
practices (such as conservation tillage, grass seedlings); planting of unharvested
grasslands; tree plantings; methane capture/biogas production with manure digesters;
wind, solar, or other renewable energy use; controlled grasslands or pasture
management; and forest restoration. Farmer participation in such programs may help
offset farm costs to install emissions controls and/or practices that sequester carbon
by providing a means for them to earn and sell carbon credits.
Recent Congressional Action
The 110th Congress is considering a range of climate change policy options,
including mandatory GHG emission reduction programs. The current legislative
proposals would not require emission reductions in the agriculture and forestry
sectors. However, some of the GHG proposals would allow for regulated entities
(e.g., power plants) to purchase carbon offsets, including those generated in the
agriculture and forestry sectors. Also, as part of the pending omnibus farm bill, there
are provisions in both the House and Senate versions of the bill that could expand the
scope of existing farmland conservation programs by facilitating the development of
private-sector markets for a range of environmental goods and services from farmers
and landowners, including carbon storage. Other provisions in the farm bill expand
existing farm conservation programs that may indirectly encourage emissions
reductions and carbon capture and storage. These and related bills and issues are
currently being debated in Congress.
Climate Change Legislation
In the 110th Congress, several proposals have been introduced that would either
mandate or authorize a cap-and-trade program to reduce GHG emissions. A cap-and-
trade program provides a market-based policy tool for reducing emissions by setting
a cap or maximum emissions limit for certain industries. Sources covered by the cap
can choose to reduce their own emissions, or can choose to buy emission credits that
are generated from reduction made by other sources. Applying this type of
market-based approach to GHG reductions and trading would be similar to the acid
rain reduction program established by the 1990 Clean Air Act Amendments. For
more information about these GHG legislative proposals and the carbon offset
provisions in these bills, see CRS Report RL33846, Greenhouse Gas Reduction:
Cap-and-Trade Bills in the 110th Congress, by Larry Parker and Brent D. Yacobucci;
and CRS Report RL34067, Climate Change Legislation in the 110th Congress, by
Jonathan L. Ramseur and Brent D. Yacobucci.
In general, the current legislative proposals do not include the agriculture sector
as a covered industry.72 In part, this may reflect the general consensus, as reflected
72 Historically, climate-related legislative initiatives have not specifically focused on
(continued...)

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CRS-26
by the House Energy and Commerce Committee, that GHG “emissions from the
agriculture sector generally do not lend themselves to regulation under a
cap-and-trade program,” given the “large number of sources with small individual
emissions that would be impractical to measure.”73 However, some bills provide
authority to EPA to determine covered entities by applying cost-effective criteria to
reduction options.
Several of the cap-and-trade proposals do incorporate the agriculture and
forestry sectors either as a source of carbon offsets74 or as a recipient of set-aside
allowances.75 In the context of these legislative proposals, a carbon offset is a
measurable avoidance, reduction, or sequestration of carbon dioxide (CO ) or other
2
GHG emissions, expressed in carbon-equivalent terms.76 A set-aside allowance
refers to a set percentage of available allowances under the overall emissions cap that
is allocated to non-regulated entities, in this case domestic agriculture and forestry
entities. Some bills also specify that the proceeds from auctioned allowances be used
to promote certain objectives, which could further encourage farmland conservation
and bio-energy technologies and practices, among other activities.77
Many of the GHG bills — S. 280 (McCain/Lieberman), S. 317 (Feinstein), S.
1168 (Alexander/Lieberman), S. 1177 (Carper), S. 1766 (Bingaman/Specter), S. 2191
(Lieberman/Warner), and H.R. 620 (Olver) — would allow for the use of carbon
offsets, including agricultural activities and other land-based practices, under a
cap-and-trade framework. This builds on the concept, also expressed by the House
Energy and Commerce Committee, that emissions reductions and carbon
sequestration by the agriculture sector may provide an appropriate source of credits
or offsets within a cap-and-trade program.78 Some bills — S. 390 (Sanders/Boxer),
S. 485 (Kerry), S. 1201 (Sanders), S. 1554 (Collins/Lieberman), and H.R. 1590
(Waxman) — would not allow for offsets, but would set aside a percentage of
72 (...continued)
emissions reductions in the agriculture sector.
73 Committee on Energy and Commerce, “Climate Change Legislation Design White paper:
Scope of a Cap-and-Trade Program,” prepared by committee staff, Oct. 2007, available at
[http://energycommerce.house.gov/Climate_Change/White_Paper.100307.pdf].
74 GHG bills that provide for agriculture or forestry offsets are S. 2191 (Lieberman/Warner),
S. 280 (McCain/Lieberman), S. 317 (Feinstein), S. 1168 (Alexander/Lieberman), S. 1177
(Carper), S. 1766 (Bingaman/Specter), and H.R. 620 (Olver).
75 Primarily S. 2191 and also S. 1766 (Bingaman/Specter).
76 In the context of credit trading, an offset is a certificate representing the reduction of one
metric ton of carbon dioxide emissions, the principal greenhouse gas. Offsets generally fall
within the categories of biological sequestration, renewable energy, energy efficiency, and
reduction of non-CO emissions. For more information concerning offsets, see CRS Report
2
RL34436, The Role of Offsets in a Greenhouse Gas Emissions Cap-and-Trade Program:
Potential Benefits and Concerns, by Jonathan L. Ramseur.
77 For more information on allowances and auction proceeds in current GHG bills, see
Allocations for Carbon Allowances and Auctions under S. 2191, by Brent D. Yacobucci,
CRS general distribution memorandum, February 22, 2008.
78 Ibid.

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CRS-27
allowances for various purposes, including biological sequestration. Participating
farmers and landowners who receive these allowances for sequestration and/or
emission reduction activities could sell them to facilities (e.g., power plants) that
could become covered by a cap-and-trade program.
One Senate bill that was ordered reported by the Senate Committee on
Environment in December 2007 is the Lieberman-Warner Climate Security Act of
2008 (S. 2191), which contains several agriculture-based provisions.79 The
cap-and-trade framework outlined in S. 2191 establishes a tradeable allowance
system that includes a combination of auctions and free allocation of tradeable
allowances. As part of this overall framework, S. 2191 includes three design
mechanisms that may provide financial incentives to encourage land-based
agricultural and forestry activities: carbon offsets, set-aside allowances, and auction
proceeds. S. 2191 provides for a range of agriculture and forestry offset projects,
including agricultural and rangeland sequestration and management practices, land
use change and forestry activities, manure management and disposal, and other
terrestrial offset practices identified by USDA. S. 2191 also would directly allocate
5% of the overall emissions allowances to domestic agriculture and forestry entities,
and allocate a set percentage of available auction proceeds to carry out a cellulosic
biomass ethanol technology deployment program. For more information on the
agriculture and forestry provisions in S. 2191, see CRS Report RS22834, Agriculture
and Forestry Provisions in Climate Change Legislation (S. 2191), by Renée Johnson.
The inclusion of these types of provisions could provide opportunities to some
farmers and landowners by allowing them to directly participate in and, in some
cases, gain a significant part of this emerging market. The offset and allowance
provisions would allow farmers and landowners to participate in the emerging market
by granting them the use of allowances and credits for sequestration and/or emission
reduction activities. These allowances and credits could be sold to regulated
facilities (e.g., power plants) covered by a cap-and-trade program to meet their
emission reduction obligations. The agriculture and forestry sectors also would
receive proceeds from the sale of these allowances, credits, and auctions to further
promote and support activities in these sectors that reduce, avoid, or sequester
emissions.
However, the inclusion of carbon offsets from the agriculture and forestry
sectors within a cap-and-trade program has remained controversial since the Kyoto
Protocol negotiations.80 During those negotiations, there was marked disagreement
among countries and interest groups, arguing either for or against the inclusion of
79 This analysis is based on legislative text in S. 2191, as ordered reported by EPW,
available at Sen. Lieberman’s website, [http://lieberman.senate.gov/documents/lwcsa.pdf].
80 See, for example, E. Boyd, E. Corbera, B. Kjellén, M. Guitiérrez, and M. Estrada, “The
Politics of ‘Sinks’ and the CDM: A Process Tracing of the UNFCCC Negotiations
(pre-Kyoto to COP-9),” Feb. 2007, draft submitted for International Environmental
Agreements; also see two articles in Nature, no. 6812, Nov. 2000, “Deadlock in the Hague,
but Hope Remains for Spring Climate Deal,” and “Critical Politics of Carbon Sinks.”

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offsets from the agriculture and forestry sectors.81 The EU’s GHG emission program,
the Emission Trading System (ETS), which was established in 2005, does not
provide for agricultural or forestry projects and activities. Among the reasons are (1)
pragmatic concerns regarding measurement and verification, given the sheer number
of farmers and landowners, and (2) ideological concerns about granting too much
flexibility in how emission reductions are met, which could undermine overall
program goals. Among the areas of concern regarding biological sequestration
offsets are those highlighted in two previous sections of this report, “Uncertainty
Estimating Emissions” and “Uncertainty Estimating Carbon Sinks.” In summary,
primary areas of concern include:
! Permanence/Duration, given that land uses can change over time
(e.g., forest lands to urban development, other natural events such as
fires or pests);
! Measurement/Accounting, given that biological sequestration
measurement is difficult and estimates can vary, actual emission
reduction or sequestration depends on site-specific factors (e.g.,
location, climate, soil type, crop/vegetation, tillage practices, farm
management, etc.);
! Effectiveness, the success of the mitigation practice will depend on
the type of practice, how well implemented and managed by the
farmer or landowner, and the length of time the practice is
undertaken;
! Additionality, given that some of the activities generating offsets
would have occurred anyway under a pre-existing program or
practice, and thus may not go beyond business as usual (BAU);
! Leakage, given that reductions in one place could result in
additional emissions elsewhere; and
! Double counting, given that some reductions may be counted by
another program (e.g., attributable to other environmental goals
under various farm conservation programs) or towards more than
one GHG reduction target.
A more detailed discussion of some of these issues is available in CRS Report
RL34436, The Role of Offsets in a Greenhouse Gas Emissions Cap-and-Trade
Program: Potential Benefits and Concerns, by Jonathan L. Ramseur.
2007 Farm Bill
As part of the ongoing climate change debate, there are legislative initiatives
within both the House and Senate versions of the 2007 farm bill that could expand
the scope of existing agriculture conservation programs to more broadly encompass
aspects of the ongoing initiatives. Such provisions would expand funding for
conservation and land management practices that contribute to emissions reductions
and carbon storage in agricultural activities, and also would facilitate the
81 Commonly referred to as “land use, land use change, forestry,” or abbreviated as
LULUCF.

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development of private-sector markets for a range of environmental goods and
services from farmers and landowners, including carbon storage.
Conservation and Related Farm Bill Programs. In general, both the
House-passed and Senate-reported versions of the 2007 farm bill (H.R. 2419) expand
the scope of and funding for many of the existing farm conservation, forestry,
bioenergy, and rural development programs that contribute to GHG emissions
reductions and carbon storage in the farm sector. Despite their differences, both bills
generally expand funding and activities under existing cost-sharing and technical
assistance programs, such as EQIP, CSP, and CRP, as well as existing land
retirement, conversion and restoration programs, such as CRP, WRP, and GRP. Both
bills also generally expand access to low-cost loans, loan guarantees, grants,
incentive payments, and income tax credits to farmers, ranchers, and rural small
businesses.
Neither bill, however, seeks to modify existing cost-sharing and land retirement
programs to specifically mandate that USDA gives additional consideration to
projects that propose to reduce GHG emissions or sequester carbon. Instead, GHG
emissions reductions and carbon uptake would remain an incidental benefit of
existing voluntary agriculture conservation programs that provide financial and
technical assistance to implement certain farm management practices, predominately
for other production or environmental purposes.
For more detailed farm bill information, see CRS Report RL34060, Conservation
and the 2007 Farm Bill, by Jeffrey A. Zinn; and CRS Report RL34130, Renewable
Energy Policy in the 2007 Farm Bill, by Randy Schnepf, among other CRS farm bill
reports.
Market Development for Farm-Based Environmental Services. New
conservation provisions in both the House and Senate bills also seek to facilitate the
development of environmental services markets involving the farm and forestry
sectors, which would include environmental goods and services associated with
carbon storage and GHG emissions reduction.
Both the House and Senate farm bills include provisions that would facilitate the
development of private-sector market-based approaches for a range of environmental
goods and services (e.g., water and air quality, carbon storage, habitat protection,
etc.) involving farmers and landowners. The House version would, among other
things, establish a USDA-chaired board that would provide grants and a framework
to develop consistent standards and processes for quantifying offsets from the farm
and forestry sectors.82 The Senate version differs in approach but also directs USDA
to establish a framework to develop consistent standards and processes for
quantifying environmental services from the agriculture and forestry sectors.83
82 See “promotion of market-based approaches to conservation” (Sec. 2407) of the
House-passed bill (H.R. 2419, H.Rept. 110-256).
83 See “conservation programs in environmental services markets” (Section 2406) of the
Senate-reported bill (S. 2302, S.Rept. 110-220). During Senate floor action, an amended
(continued...)

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The House version follows similar provisions recommended by USDA as part of
its 2007 farm bill proposal to Congress,84 and would cover a range of farm and
forestry services, including improved water and air quality, increased carbon storage,
and habitat protection, among other types of environmental services. The Senate
farm bill also address a range of environmental goods and services in the farm and
forestry sectors, but directs USDA to “give priority” to providing assistance to
farmers and landowners participating in carbon markets.
For more detailed information about these provisions, see CRS Report RL34042,
Environmental Services Markets: Farm Bill Proposals, by Renée Johnson.
Considerations for Congress
Following is a list of the types of questions that might be raised in the 110th
Congress in legislation and debate about global climate change in general, as well as
during the anticipated 2007 farm bill debate over existing federal conservation and
land management programs for the U.S. agriculture and forestry sectors.
! Farm Bill Programs. Where are the opportunities to expand
existing federal conservation and land management programs to
achieve greater emissions reduction and carbon sequestration in the
agriculture sector in the 2007 farm bill? How might emissions
reduction and carbon sequestration be integrated with the many other
goals of conservation programs? Should existing programs and
policies intended to promote agriculture conservation practices be
modified or augmented to better address climate change concerns?
How explicitly should climate change goals be addressed in the 2007
farm bill? How might emissions reductions and carbon sequestration
be promoted among the other broader environmental benefits of
conservation activities in the agriculture sector, such as improved
soil quality and productivity, improved water and air quality, and
wildlife habitat? Which programs or practices are the most
beneficial and cost-effective? Are there ways to rank applications
from farmers under existing programs to grant a higher weight to
proposals to address climate change goals? Are there existing state
programs that effectively address climate change and could be
adopted at the federal level?
! Emissions reductions. Should carbon sequestration efforts be
balanced by incentives to obtain additional emissions reductions in
the agriculture sector through improved conservation and farm
management practices, which could have a more immediate, direct,
and lasting effect on overall GHG emissions? How might the
existing regulatory framework for controlling air pollutants affect the
83 (...continued)
Senate farm bill was offered as an amendment and substitute (S.Amdt. 3500) to H.R. 2419.
84 USDA, USDA’s 2007 Farm Bill Proposals, Jan. 31, 2007, at [http://www.usda.gov/
documents/07finalfbp.pdf].

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CRS-31
climate change debate? What are the potential options for reducing
GHG emissions at U.S. farming operations? How might cost
concerns be addressed that limit broader adoption of manure
management systems and also feed management strategies at U.S.
livestock operations?
! Carbon sequestration. What are the upper limits of carbon capture
and storage initiatives in the agriculture sector? For example, are
such carbon sinks temporary or long-lasting, and what limits exist on
their storage value? Do they rely appropriately on the willingness of
landowners to adopt or continue to implement a particular
conservation practice? Do they rely too heavily on the willingness
of landowners to convert existing farmland to open space or prevent
the conversion of existing farmland to non-farm uses? Are they cost-
effective when compared to sinks in other sectors? How might
concerns regarding uncertainty be addressed when measuring and
estimating the amount of carbon sequestered in agricultural soils?
! Carbon offset or credit trading programs. Is there a federal role
in possibly expanding existing federal conservation programs in
conjunction with efforts to create new market opportunities for
farmers by developing a carbon credit trading system? What are the
potential policy implications of establishing a carbon credit trading
system? What are the potential measurement, monitoring,
enforcement, and administrative issues of implementing such a
program? For example, how could stored carbon be measured and
verified; how much compensation is available and for how long;
what are required management practices; which accounting
methodologies should be used? Would such a system operate under
a voluntary or a mandatory framework?
! Bioenergy promotion. How might ongoing or anticipated initiatives
to promote U.S. bioenergy production, such as corn-based or
cellulosic ethanol, affect the options for land management or
conservation strategies that could increase carbon uptake on
agricultural lands and in agricultural soils? Might broader climate
change goals be affected by increased agricultural production in
response to corn-based ethanol? For example, might previously
retired land be brought back into corn production or might this result
in more intensive corn production, including fewer crop rotations
and planting area setbacks, which could raise emissions and reduce
the amount of carbon sequestered? Are there other competing
commercial crops that might be used as a feedstock for ethanol that
could also affect emissions and carbon uptake potential?
! Energy efficiency. What are the opportunities for improved on-farm
energy efficiency and conservation? How might these be integrated
into the broader framework on climate change mitigation in the
agriculture sector?

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CRS-32
! Safeguarding U.S. agricultural production. Among the possible
effects of global climate change on agricultural production are
increased climate variability and increased incidence of global
environmental hazards, such as drought and/or flooding, pests,
weeds, and diseases, or location shifts in where agriculture is
produced. Climate change in some locations increases the yields of
some crops. Some U.S. production regions are likely to fare better
than others. Are additional initiatives needed in the U.S. agriculture
sector to prepare for the potentially effects of global climate change
that might impact U.S. agricultural production and food security?
Which regions and crops might be “winners” or “losers” and how
can transitions be eased?

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CRS-33
Appendix: Primer on the Role of the U.S. Agriculture Sector
in the Climate Change Debate
Question
Discussion
What are the
Official estimates of greenhouse gas (GHG) emissions for the U.S. agriculture sector are
types of GHG
based on emissions of methane (CH ) and nitrous oxide (N O) associated with agricultural
4
2
emissions
production only. These estimates do not include carbon dioxide (CO ) emissions from on-
2
associated with
farm energy use and other emissions associated with forestry activities, food processing
U.S. agriculture?
or distribution, or biofuel production.
See Agricultural GHG Emissions in this report for more information.
What are the
Agricultural sources of CH emissions are mostly associated with the natural digestive
4
sources of GHG
process of animals and with manure management on U.S. livestock operations. Sources
emissions from
of N O emissions are mostly associated with soil management and fertilizer use on U.S.
2
agriculture?
croplands.
Figure 1 shows agricultural emissions by type and production category.
Why are CO
CO emissions from on-farm energy use are aggregated with emissions for all
2
2
energy emissions
transportation and industrial sectors, and comprise a small share of this total. Even if
excluded?
included in the estimates for the agriculture sector, this would not substantially raise
agriculture’s overall share of total GHG emissions.
What is
In 2005, GHG emissions from U.S. agricultural activities totaled nearly 540 MMTCO -Eq
2
agriculture’s
(million metric tons CO -equivalent units, accounting for about 7% of annual national
2
share of annual
GHG emissions (Table 1). Fossil fuel combustion is the leading source of national GHG
national GHG
emissions (about 80%), with the energy sector generating about 85% of annual emissions
emissions?
across all U.S. sectors.
How much
In 2005, agricultural soils sequestered about 30 MMTCO -Eq., or roughly 5% of annual
2
carbon is
emissions generated from agricultural activities. Compared to total national GHG
sequestered in
emissions, the agriculture sector offsets well under 1% of emissions annually. These
U.S. agricultural
estimates do not include uptake from forested lands or open areas that account for a
soils?
majority (about 95%) of total U.S. sequestration. Figure 2 shows carbon sequestration in
agricultural soils. Also see Agricultural Carbon Sinks for more information.
Is there any
Reasons for uncertainty associated with uptake estimates in U.S. soils include actual
uncertainty
uptake depends on site specific conditions (e.g., location, climate, soil type, crop type,
associated with
tillage practices, crop rotations, farm management, etc.); accounting methodology; type
estimates of
of practice, how well it is implemented, and the length of time undertaken; availability of
carbon uptake for
federal/state cost-sharing or technical assistance; and other competing factors (including
the agriculture
supply response for commercial crops and bioenergy crops). Actual GHG emissions may
sector?
also vary according to many site-specific conditions.
See Uncertainty Estimating Carbon Sinks for more information.
What is the
The potential for carbon uptake in U.S. agriculture sector is much greater than current
potential to
rates. USDA estimates net increases in carbon sequestration ranging from 40 to 590
reduce emissions
MMTCO -Eq. per year (Table 2), or 2 to 20 times above current rates. This could offset
2
and/or increase
total current national GHG emissions by as much as 8%. Other studies show an even
carbon uptake in
greater carbon uptake potential in the agriculture sector. Practices that may reduce
the agriculture
emissions and/or sequester carbon on U.S. farmlands include land retirement, pastureland
sector?
and crop conversion, restoration; improved soil management and conservation tillage; and
improved manure management and feeding strategies at livestock operations.
See sections Potential for Additional Uptake and Potential for Additional Reductions.

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CRS-34
Question
Discussion
How costly are
The estimated value (or cost) of sequestered carbon will vary by practice. USDA’s forecast
the types of
of an additional sequestration potential of 40 to 590 MMTCO -Eq. per year is associated
2
farming practices
with an estimated per-unit value ranging from $3-$34/mt of permanently sequestered
that help address
carbon dioxide. The low-end of this range reflects the sequestration potential associated
climate change
with cropland management practices; higher-end values are associated with afforestation
issues?
and land retirement. See Table 2 for more information
See Potential Mitigation Costs for more information.
How can
Most land management and agriculture conservation practices might both reduce GHG
emissions from
emissions and/or sequester carbon, including land retirement, conversion, and restoration;
production be
conservation tillage; soil management and soil erosion controls; efficient fertilizer/nutrient
reduced? How
and chemical application; crop rotations; cover cropping; manure management; feed
can carbon
management; rotational grazing and improved forage; vegetative and riparian buffers;
uptake in
windbreaks for crops and livestock; bioenergy substitution and renewable energy use; and
agricultural soils
energy efficiency and energy conservation on-farm.
be increased?
See Table 3 and Mitigation Strategies in the Agriculture Sector for more information.
Are there
Existing federal and state farm conservation programs promote the types of land
existing
management and conservation practices that can reduce GHG emissions and/or sequester
programs and/or
carbon. Also, many existing voluntary programs in the current farm bill, as well as under
legislation that
existing state-level programs provide cost-sharing and technical assistance to encourage
promote farming
farmers to implement such practices. These are voluntary programs and are generally
practices that
designed to address site-specific improvements at an individual farming operation.
may help address
See Federal Programs and other listed program information.
climate change?
Source: Table prepared by the Congressional Research Service.
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