House Ag Committee Holds Hearing on Cap and Trade

House Ag Committee Holds Hearing on Cap and Trade

ISU economist says cap and trade could substantially increase price of corn and beans.

The debate over cap-and-trade policy was the focus of testimony to a subcommittee of the U.S. House Committee on Agriculture by Iowa State University professor of economics and finance, Dr. Dermot Hayes. Hays told the subcommittee cap-and-trade could potentially increase corn and soybean prices more than 20%, a boon to some farmers and all landowners, but it may not be good for livestock growers or crop growers who rent land.

 

Cap-and-trade legislation is designed to reduce carbon in the atmosphere that may be affecting climate. Opponents say limiting carbon means reducing economic activity. Projections indicate that up to 100 million acres of U.S. farmland would be required to provide enough forests to absorb the carbon. Elsewhere around the world another 300 million acres would be required.

 

Hays believes one other method of capturing carbon may become more popular and that is heating biomaterial in a process called pyrolysis, turning part of it into a carbon-rich substance called biochar and incorporating that biochar directly into the soil. This process actually increases yields on soils and achieves many of the carbon benefits of growing trees without the costs associated with reducing world crop acres.

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