Michigan Commission of Agriculture September 16, 2009 Climate Change and the Farm

Challenges and Opportunities  Federal climate change legislation may effect energy costs  Farmers engaged in conservation may benefit financially  Forest landowners may benefit from the sale of carbon offsets  Water quality is protected  Wildlife habitat is created or restored

Illustration Courtesy of NASA Earth Science Enterprise Global Carbon Dioxide Cycle

Chicago Climate Exchange (CCX)  Voluntary, member-based, cap-and-trade market for the reduction of greenhouse gases, like CO 2, methane, NO 2 and chlorofluorocarbons  Self-regulated market with legally binding emission reduction targets  Cap is the member’s average annual emissions from  In 2006, members must reduce emissions 4% below the cap  By 2010, members must reduce emissions 6% below the cap  Over 200 members, including:  Ford, Dow, AEP, Motorola, Waste Management, City of Chicago, Michigan State University, State of New Mexico

The Role of Carbon Offsets The reduction of greenhouse gas emissions can be achieved through various activities. One option available to CCX members is the purchase of carbon offsets. 2% of required 6% reduction can be achieved through offset purchases on the CCX. Offsets can provide a cheaper alternative to capital improvements at facilities. Offsets provide an investment in sustainable activities beyond those of just CCX members.

 Farmers/landowners earn greenhouse gas emissions credits when they use conservation tillage, plant grasses and trees, or capture methane with anaerobic digesters.  Conservation practices store carbon in the soil and plants. Anaerobic digesters produce energy and prevent methane from being released to the atmosphere.  Credits are aggregated from many landowners and sold through the Chicago Climate Exchange (CCX®). Michigan Conservation and Climate Initiative (MCCI)

 Michigan Department of Agriculture organized MCCI  Delta Institute: Aggregation; contracting with landowners; maintains program database; program promotion  CCX®: Trading platform and rules  Local Conservation Districts: Local outreach and enrollment assistance; CCX®-approved verifiers MCCI Roles and Responsibilities

Grass plantings as part of the Conservation Reserve Enhancement Program are eligible to sell carbon offsets at the rate of 1 metric ton per acre.

Wildlife habitat is created as a result of addressing the climate change issue.

Wetland restorations store runoff and creates habitat while sequestering carbon in the upland border.

CREP native grass planting

Bird watching and waterfowl hunting generate recreational revenue.

Grass buffer strips create setbacks from surface water for crop production while providing the landowner compensation.

Anaerobic digesters capture and flare off methane, generate electricity for the farming operation or may be sold as electricity back to the grid.

Tree plantations accrue carbon credits based on age and species -- on average 2.5 metric tons per acres.

Conservation tillage accrues carbon in the soil at the rate of.6 metric tons per acre.

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