Source: Laura Sands, Sara Hessenflow Harper and Sara Brodnax, Agricultural Carbon Market Working Group

In last week's State of the Union address, President Obama renewed the Administration's commitment to the passage of a climate and energy bill. The current discussion in the Senate is driven by the bi-partisan group of Senators John Kerry (D-Mass.), Lindsey Graham (R-S.C.), and Joseph Lieberman (I-Conn.), who are working to draft a comprehensive climate and energy bill which includes cap and trade. Meanwhile, the EPA continues to move forward with greenhouse gas regulation under the Clean Air Act.

Recent studies released by Kansas State University and Informa Economics provide further evidence that the agriculture sector can benefit from an offset market. The KSU study summarizes six analyses of the 2009 H.R. 2454 bill that passed the House and finds that U.S. agriculture, overall, has more to gain than to lose from the passage of the bill. Informa Economics released a new study examining the impact H.R. 2454 would have on the cost of agricultural inputs as well as the revenue from the sale of agricultural offsets. When offsets are considered, all three commodities modeled — corn, wheat and soybean — were found to result in sector wide net revenue gains. (View both of these studies)

USDA has also recently updated its report, "The Effects of Climate Change on U.S. Ecosystems," to include significant likely impacts on crops, rangeland, and pastureland.