A few months ago, as Waxman-Markey was being dragged across the US House of Representatives’ floor, the agricultural lobby demonstrated how powerful they were, flexing their muscle and extracting concessions from the lawmakers. Now that the debate is raging in the US Senate, they’re at it again.
Ricardo Bayon is probably one of the people that’s written the most about ecosystem services markets (including carbon), and he certainly knows his away around. Although this post is about a month old, he got a lot of things right, such as the fact that trouble would come not from Republicans, but from within the Democrat party – he was dead right there. So here’s his prediction about what is the make-or-break in passing Boxer-Kerry:
As it was in the House, so it is likely to be again in the Senate. Expect agriculture to once again have a big say in the ultimate fate of this or any other climate legislation.
How about offsets, can’t that help?
One argument to counter this fear is, of course, that by selling offsets, farmers will be able to minimize their pain. The problem is that virtually every farmer in the US has seen what damage increased input costs can cause… and they have the scars to prove it.
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By contrast, virtually NO farmers in the US have seen remarkable benefits from the sale of carbon offsets. Sure, there have been some (courtesy largely of the Chicago Climate Exchange), but they are few and far between (not to mention that prices of a ton of carbon on the CCX have fallen to below the $1 mark).
Carbon offsets are essentially worthless in the Chicago Carbon Exchange, then. It’d be suicidal to bank on them at this stage. The wrangling will go on. And no Boxer-Kerry lowers the prospects for Copenhagen by a considerable amount…
Punchline: get carbon markets to work properly. We need to put a price on the thing.
[...] As mentioned before, farmers are the make-or-break group in approving the Boxer-Kerry cap-and-trade bill in the US: In the Senate, however, every state gets exactly two votes. Sparsely-populated states are thus hugely over-represented: senators representing a mere 11% of America’s population can block any bill, since 60 votes out of 100 are needed to guarantee passage. [...]