Friday, April 10, 2009

Carbon Offsets from a Bureaucrat's Viewpoint

Okay, I was a bureaucrat so when there's talk of paying farmers for carbon offsets, I immediately think of how it might be handled by USDA/FSA. And, because I'm stuck in a rut, I'm likely to think of structures FSA has used in the past.

Back in the 1970's there was something which strikes me as a parallel. Under the program then, ASCS (FSA's predecessor) established a "conserving base" for each farm. This was the acreage in "conserving uses" (think of it as hay fields, pastures, grassland). Under the program,as a condition of receiving benefits farmers might be required to increase the acreage in conserving uses for the year (and not break out any new cropland). That seems to me to be a valid model for any future payments for carbon offsets. FSA/NRCS looks at the farming operation, documents what's being done already which impacts carbon sequestration. Call it a "carbon offset base". Then you could pay taxpayer dollars for changes to the operation which increases sequestration. But you'd also have to assess charges if and when a farmer changes her operation and reduces the carbon offset base. Or, assess the operation yearly and make yearly payments.

No doubt I'll have more to say as the subject continues to heat up.


Walter Jeffries said...

Despite the fact that I am a farmer and own a lot of timber land and would thus benefit from this sort of program I have very mixed feelings on it. I fear that cap and trading isn't going to really reduce pollution, which is what we need, whether global warming is real or not, whether global warming is desirable or not. The problem with the carbon trading is they're just doing business as usual, shifting the 'pollution' around and paying a little extra for what they do pollute. I don't see them actually dramatically cutting the pollution unless the costs get dramatically higher for polluting vs the cheap energy, etc.

Another issue is that the carbon credits the government is selling aren't really theirs to sell. Those absorptions of carbon are being done by private forests and fields to a very large degree. That brings up giving the land owners credits for carbon sequestering and every proposal I read on that is horridly complicated with many middlemen taking bites of the pie.

Rather than all this complicated carbon credit system for land owners it would be better to change the real estate tax system so that what is being taxed is the real user of services (homes & businesses primarily) instead of taxing on open land and forests. But that is really a somewhat separate topic from the carbon credits system because in rural areas our primary system of taxation is based on land ownership which is a holdover from another millennium. (Gee, we get to say that now!)

Given that the existing system is so deeply entrenched I doubt we'll see a change. Rather we're more likely to simply see new and different fees and taxes added instead of replacing the old taxes. In high times we were told we had to pay higher taxes because we had the money since everyone was doing so well. Now in tight times we're being told that taxes and fees must rise to cover the government income shortfalls. No sunsetting of those taxes and fees though. Generally that is the way of government, although not always.

Bill Harshaw said...

I generally agree. (Remember when we got rid of the phone tax that dated back to the Spanish-American war--change is tough.)

From what I've read, I think the carbon tax would be preferable in principle, economists across the political spectrum seem to agree. It's more straightforward. And it would help the locavores. But part of Clinton's problems in 1993 was trying for it so few politicians have the gumption to push it. And, to acknowledge reality, if in the West you have to drive hours to a grocery/much less a supermarket, you're going to tell your Senators a carbon tax is unacceptable.