The environmental role of agriculture in an era of carbon caps.

Author:Hornstein, Donald T.
Position:Symposium: The Future of Food Regulation

The link between the production of food and the environmental regulation of farms, never a strong one, may finally begin to take shape as the world grapples with the new Carboniferous era, a manmade epoch of climate change and climate-change regulation. Such a development is long overdue. Almost half a century has passed since the initial publication of Rachel Carson's Silent Spring, (1) the book that launched modern environmentalism. Yet the environmental law that emerged from this movement has always been, from the perspective of Rachel Carson's messages in Silent Spring, deeply disappointing. In a narrow sense, the disappointment relates to the environmental law that governs farms. Not only is the regulation of agricultural pesticides--the central subject matter of Silent Spring--notoriously unsuccessful, (2) but environmental law as a general matter is so riddled with exemptions for agriculture that it has been described as the "anti-law" of farms. (3) But modern environmental law also disappoints on a deeper level. Silent Spring's broader message was a respect for natural processes that Rachel Carson hoped would realign our economics, pushing us to find ways to integrate human endeavors with nature in a way that today we would term "sustainable." In contrast, modern environmental law has generally focused merely on outputs rather than inputs, on cleaning up waste-streams rather than changing underlying economic processes. (4)

But climate change may be shaking up how we look at agriculture and the environment. To some extent, the changing climate itself is already beginning to affect the natural inputs on which farming is based: historical weather patterns and their associated ranges of rainfall, temperature, wind, snowpack, river levels, and weed/insect/pathogen populations. (5) And changes in these inputs have provoked serious discussions in the public policy literature about: the amounts and types of food that agriculture may be capable of producing in a climate-changed world; (6) about which agricultural regions may be hardest hit; (7) and about the types of governmental or market-based support services farmers may need in order to adapt. (8)

This Article, however, addresses a different aspect of agriculture and the emerging environmental law of climate change. In discussing how society might mitigate its emissions of greenhouse gases, policymakers have come full circle, returning to the deeper project that Rachel Carson proposed for us fifty years ago: to realign the processes of the economy within the constraints of the natural world. Much of this discussion has focused on energy, the principal source of greenhouse gas ("GHG") emissions. (9) But a surprising amount of attention has recently shifted to agriculture.

In part, the link between agriculture and climate-change mitigation reflects the fact that agriculture itself generates GHG emissions (in the United States under ten percent). (10) In larger part, though, it is because agriculture and forestry may offer relatively cost-effective opportunities to adopt processes that can capture and store ("sequester") excess GHGs from the atmosphere in carbon sinks such as biomass or soil. (11) In a white paper in 2007 (and in its revision in 2009), McKinsey & Company, the international consultancy firm, found that "terrestrial carbon" locked up in forestry and agriculture could match the carbon abatement potential of switching to alternative, low-carbon energy supplies. Indeed, McKenzie found that, because of its low per-unit cost, land-based carbon sequestration was one of three major business opportunities in a low-carbon economy. (12) With science and economics suggesting the prospect of a win-win situation, it did not take long for politicians to recognize the possibilities. In June 2009, the historic Waxman-Markey climate bill narrowly passed the U.S. House of Representatives. The bill passed only with the support of an agricultural bloc that successfully inserted provisions allowing for an "offset" market that would allow carbon emitters to pay farmers for undertaking greenhouse-friendly ways to grow crops. (13)

This Article seeks not to celebrate the possibility of a market for agricultural offsets. The technical and economic difficulties of this market may in fact overwhelm its superficial appeal, turning it from a win-win solution into a rent-seeking loophole that undermines, rather than enhances, society's need to control GHG atmospheric concentrations. To paraphrase Gustave Flaubert, it all depends on the details. (14)

But this Article does seek to sketch the possible new threshold on which agriculture currently finds itself--as the subject of perhaps the world's first legal regime self-consciously seeking not merely to correct an environmental externality, but to align economic processes more holistically within ecological constraints. To be sure, by sketching this threshold, I certainly do not mean to claim that, in even a successful market for agricultural carbon offsets, Rachel Carson's dream would be fulfilled. Other reform efforts within agriculture, such as the growth of organic farming (15) and the movement for locally-grown agriculture, (16) can also stake claims as ideological descendents of Rachel Carson's vision. My points are more modest. First, by looking at the example of climate-related policymaking in agriculture, we are given a valuable case history of what the contours (and difficulties) may be of a new generation of environmental-agricultural laws that really do attempt the heavy lifting that Rachel Carson urged us to try. Second, by considering the science, policy design, and economics of an agricultural offset market, we can see the contours of a new playing field on which farmers worldwide may soon be operating.


    In a country where agricultural regions are given disproportionately greater political representation in the legislature (South Dakota has the same number of United States Senators as either New York or California), the attraction and political economy of agricultural subsidies coming from Washington, D.C. probably need little elaboration. Less appreciated, however, are the effects of globalization and free trade on what otherwise would be a purely domestic (and politically cozy) set of agricultural policies. Recently, pressure from free-trade has begun to crack the system of federal agricultural subsidies that, for over half a century, have shaped the mindset and crop production decisions of conventional farmers. Among other things, this means that the future may hold fewer financial incentives to support vast monocultures that, due to artificial price supports, regularly produce more crops, such as corn, than a freer market would dictate.

    Such a development could have enormous implications both for the practice of agriculture and for the nation's food supply. Agriculturally, upon the removal of price incentives that only incentivize farmers to produce more, growers may finally be able to direct their knowledge and experience toward less environmentally destructive, agricultural systems. This outcome may be even more likely if the government paid farmers who produce positive environmental externalities in their production systems. And, as a side note, the implications of this development for the food supply, nutrition, and public health could be significant; a market stripped of artificially cheap corn--and high-fructose corn syrup--for example, might significantly impact the American diet. (17) This development in international trade--the ending of agricultural subsidies that reward overproduction--deserves to be briefly amplified.

    Between the New Deal and the 1990s, Congress authorized a system of agricultural subsidies, such as "deficiency" payments (18) and nonrecourse loans, (19) which were designed to support farmers' incomes without regard to the vagaries of crop yield. This system rewarded farmers simply for producing a crop without regard to market demand. (20) In the mid-1990s, however, Congress approved the results of the Uruguay Round of trade negotiations, creating the World Trade Organization ("WTO"), and "for the first time subjected U.S. agricultural subsidies to significant restrictions under global trade rules." (21) The rationale for this shift was the idea that growth in American agricultural exports, under the WTO's liberalized trading regime, would provide farmers with an expanded source of income that would more than counterbalance a reduced stream of agricultural subsidies. Accordingly, in its 1996 Farm Bill, Congress limited domestic agricultural subsidies to $19.1 billion by eliminating deficiency payments and replacing them with a series of fixed payments that would diminish over a seven-year period. (22)

    Soon, however, this shift in thinking was tested. In the late 1990s, agricultural commodity prices collapsed, and Congress responded with new farm legislation that sought to reverse the diminishing payments it had approved in 1996. (23) In 2002, Congress again increased farm subsidies in the Farm Security and Rural Investment Act of 2002 (24) (the 2002 "Farm Bill"). (25) To square these actions with its earlier approval of the Uruguay Round of international trade rules (under which agricultural subsidies were to be reduced), Congress attempted to gain international support for reinvigorating domestic subsidy programs through the so-called "Doha Round" of international trade talks that began in Doha, Qatar, in 2001. (26) The Doha Round, however, seemed to collapse in July 2006 when negotiations were suspended "primarily because of broad disagreements over agriculture." (27) Thus, as to agricultural subsidies, international trade law reverted to the framework that announced in the Uruguay Round and Congress approved in the mid-1990s.

    That said, it had always...

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