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Use of Agricultural Offsets to Reduce Greenhouse Gases: Testimony Before the Subcommittee on Conservation, Credit, Energy, and Research,Committee on Agriculture, U.S. House of Representatives
Joseph Kile (au)
Statement of Joseph Kile, Assistant Dir. for Microeconomic Studies, Congressional Budget Office (CBO), on the use of agricultural offsets as part of a cap-and-trade program for reducing greenhouse gases. H.R. 2454, the American Clean Energy and Security Act of 2009, would set an annual limit, or cap, on greenhouse-gas emissions for each year between 2012 and 2050 and would distribute “allowances,” or rights to produce those emissions. After the allowances were distributed, regulated entities — those that generate electricity or refine petroleum products, for ex. — would be free to trade them, so entities that could reduce their emissions at lower costs would sell allowances to others facing higher costs. The provisions of H.R. 2454 reflect the fact that a variety of other actions — including changing agricultural practices and reducing deforestation — can also reduce the concentration of greenhouse gases in the atmosphere. Those actions have the potential to “offset” the extent to which more costly actions, such as reducing the use of fossil fuels, would have to be undertaken to meet a chosen target for total greenhouse-gas emissions. Under the bill, regulated entities would be allowed to use offsets — meaning reductions in greenhouse gases from activities not subject to limits on emissions — in lieu of reducing their emissions or purchasing allowances. Yet the difficulty of verifying offsets raises concerns about whether the specified overall limit would actually be met. Such concerns may be especially acute when, as under H.R. 2454, allowable offsets include actions taken outside the U.S. Figures.
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