STATEMENT OF KEITH COLLINS, CHIEF ECONOMIST
U.S. DEPARTMENT OF AGRICULTURE

Before the Subcommittee on Production and Price Competitiveness,
The Committee on Agriculture, Nutrition, and Forestry,
U.S. Senate

May 4, 2000

Mr. Chairman and Members of the Subcommittee, thank you for the opportunity to discuss the Department of Agriculture's (USDA's) program of research on the carbon cycle, best management practices and production agriculture. I will outline why we think research on the carbon cycle and best management practices is and should continue to be a top priority at USDA. I also will briefly review our program of work and identify the areas where we think greater research efforts are needed.

The holding of this hearing makes an important statement about how Federal and State agricultural research resources can best help American farmers and ultimately American food consumers. The farm economy is now in its third consecutive year of low prices and weak markets, and we need to maintain a sound program of research and financial assistance that will help producers deal with economic downturns. However, as this hearing will emphasize, we must also conduct research that will help production agriculture avoid future problems and create new economic opportunities. Research on the carbon cycle and best management practices addresses both of those goals.

Regardless of what one believes is the probability that human-created greenhouse gas emissions will change the climate, there is no doubt that such emissions present both potential risks and opportunities for production agriculture that, over time, could have significant consequences for farm production, prices and incomes. If we fail to undertake adequate research, we will not fully understand how crops, livestock, trees, pests, and other facets of ecosystems will respond to higher levels of greenhouse gasses in the atmosphere. We will fail to understand cost-effective ways to make agriculture and forests more adaptable to any changes in climate and weather, should they occur. We will fail to understand the details of the carbon cycle and the possibilities for farmers and foresters to sequester carbon. And, we will fail to have the measurement, verification and monitoring mechanisms in place that would facilitate greenhouse gas emitters purchasing carbon-sequestering activities from farmers and foresters. In order to help avoid potential future problems and to realize emerging opportunities for agriculture, USDA conducts a core program of research on global change, and the President's FY 2001 budget requests that Congress significantly expand the program.

Agriculture in the Carbon Cycle

Carbon in the environment is at the center of numerous issues that affect agriculture, ranging from its role in agricultural productivity of crops and soils to possible impacts on the global climate due to rising concentrations in the atmosphere. Accounting for all the world's carbon-the carbon stock-and the quantities that flow through the various pools-the carbon flux-is a complex task, but here is a rough picture. The global stock of carbon, estimated at just a little under 50,000 billion metric tons, is stored in four pools: oceans; fossil fuel reserves, such as coal and oil; terrestrial systems, such as trees and soils; and the atmosphere. By far the largest pool of carbon is contained in oceans, which hold more than 80 percent of the global stock of carbon. Fossil fuel reserves and the terrestrial ecosystem store about 10 and 4 percent of the total, respectively. Less than 2 percent of the total stock of carbon is stored in the atmosphere. However, this 2 percent of the total carbon stock that is stored in the atmosphere is the reason we are here today. Since pre-industrial times, the atmospheric concentration of carbon dioxide has increased by 30 percent, with most of this increase caused by human activities.

For example, during the 1990's, human induced carbon emissions averaged 8.3 billion metric tons per year, with fossil fuel combustion accounting for 6.3 billion metric tons and land use changes, such as deforestation, accounting for the remaining 2.0 billion metric tons. Over the same time period, oceans and terrestrial systems sequestered about 2.3 and 2.7 billion metric tons of the carbon emissions per year, respectively. As a result, human induced carbon emissions increased atmospheric carbon by about 3.3 billion tons of carbon per year.

This comparison of sources of emissions and sequestration into sinks highlights three essential ways to reduce the amount of carbon stored in the atmosphere. First, emissions from fossil fuel combustion can be reduced by improving energy efficiency and/or reducing fossil fuel use. Second, the amount of carbon stored in oceans can be increased, an active area of research in other parts of the government. Or, third, the emissions from land use changes can be reduced and/or the amount of carbon that can be stored in terrestrial systems can be increased through improved agricultural and forestry practices.

Agriculture is both a carbon source and sink. Clearing of native vegetation in forests, prairies, and wetlands released carbon dioxide because the plants removed were decomposed by microorganisms. Turning the soil by plowing changed the soil structure and aeration, and soil microbes were stimulated to decompose organic matter in the soil, releasing carbon dioxide. Under such practices, the estimated carbon content of soil in the central U.S. corn belt dropped by 47 percent during the first half of the 20th century.

Beginning in the 1960s, with the adaptation of reduced tillage, reversion of marginally productive agricultural lands to native vegetation, and other land management practices, the picture began to change. By 1990, carbon in the corn belt soils had increased to 61 percent of turn-of-the-century levels. Coupled with these new management strategies was an improved understanding of the importance of soil carbon. Soil organic carbon helps the soil resist erosion by "gluing" soil mineral particles into stable aggregates, which contribute to a beneficial soil condition known as tilth. This tilth also contributes to water infiltration, air and water holding capacity, and good seed germination and plant root growth. Soil organic carbon helps keep nutrients and pesticides from washing into water bodies; it helps soil resist the effect of drought; and it reduces flooding. Simply put, practices that enhance soil carbon content have broad benefits to soil, water and air quality, on and off the farm.

USDA Research on the Carbon Cycle

Across the Federal government, about $1.7 billion is being spent this year in scientific research and on surface and space-based observations under the U.S. Global Change Research Program (USGCRP) to better understand global environmental change. A key component of this program is the study of the global carbon cycle undertaken cooperatively by the following agencies: USDA, Department of Energy, U.S. Geological Survey, National Aeronautics and Space Administration, National Oceanic and Atmospheric Administration and the National Science Foundation. The goal is to answer the questions: what has happened to the carbon emitted by human activities, and what will be the future atmospheric concentration of carbon dioxide resulting from past and future emissions? The Carbon and Climate Working Group of the USGCRP recently produced a long-term research plan entitled: A U.S. Carbon Cycle Science Plan, which details how all the cooperating agencies contribute to a coherent, effective research program.

USDA's program of work on the carbon cycle is an important part of this overall Federal effort. USDA's Global Change Program is funded at $52.5 million for FY 2000. Reflecting the enormous number of important issues needing greater research, USDA has requested funding of $108.6 million for FY 2001, an increase of $56.1 million. I would like to discuss a few of our current activities and then what we see as the research needs that are behind our budget request.

USDA's Current Activities

USDA scientists have demonstrated that rising concentrations of greenhouse gases in the atmosphere affect crop production in complex ways. Research has demonstrated increased carbon dioxide can stimulate plant growth and crop yield, and the Agricultural Research Service (ARS) National Water Conservation Laboratory at Phoenix, Arizona, has been a leader in this research. However, extensive work there and at other USDA locations has shown that many other effects of carbon dioxide on cropping systems, along with temperature and water availability, must be considered before the risks, benefits, and appropriate management strategies can be identified for crops and soils.

Work done at Beltsville, Maryland has determined that carbon dioxide affects the branching pattern of some soybean varieties, which affects flowering, which in turn affects yield. This helps explain why some varieties are stimulated more than others by carbon dioxide. This same research unit is also showing how weeds are affected. Some weed species may be stimulated more than crops, and some may be more resistant to commonly used herbicides. More work on invasive species and possible links to increased carbon dioxide and climate change is being conducted by USDA scientists at Tucson, Arizona, and Temple, Texas.

Research at Auburn, Alabama, is focused on how crop management and tillage practices affect root development. Plant roots stay in the soil after the crop is harvested, so this is a major way atmospheric carbon is moved into the soil. New work at Auburn will determine the extent of sequestration of greenhouse gases in cropland soils associated with conventional and conservation tillage systems, with and without cover crops. This work, along with research on the microbes involved with carbon transformations in soil, will help identify important connections between management practices and carbon storage.

Plants are not exposed to just one atmospheric gas at a time, which complicates projections of how much plant growth and carbon sequestration may be stimulated by increased carbon dioxide. Scientists at Raleigh, North Carolina, are working on how ground-level ozone, weakens the boost crops may get from increased carbon dioxide. Increases in temperature may also lessen the expected crop stimulation by carbon dioxide, according to recent work at Gainesville, Florida. Thus, our research indicates that the fertilization effect, viewed as a benefit by some, may be counteracted by increased temperatures, pollutants or other factors not anticipated, such as increased pests or changes in nutrient content. This is an important area of needed research, one to be conducted in collaboration with universities.

Work at Fort Collins, Colorado is focusing on estimating carbon sequestration in soil and the effects of various management practices. This group is a major source of information for Federal agencies on the size of carbon pools and potential sequestration in agricultural soils. One important project building on this work is a field planning tool known as CQUESTER being developed collaboratively by ARS, NRCS and universities. This tool could be used by producers, technicians and consultants to estimate soil carbon based on soil type, climate, land use and land management practices. Tools like this are essential to development of a carbon market.

Rangelands and pastures represent nearly a third of the land area of the contiguous 48 States, so understanding their carbon dioxide effects is essential to projecting total carbon storage in soils. Scientists at Ft. Collins and in Cheyenne, Wyoming are studying the response of native shortgrass species in the Colorado steppe to rising carbon dioxide. Increased carbon dioxide increases plant growth and increases soil water, but changes in the nutritional value of the plants may affect how grazing lands must be managed. New work is getting underway at Mandan, North Dakota, for estimating carbon storage in grazing lands under different forage management and livestock systems. The special questions surrounding carbon sequestration in cold, wet soils are being addressed in new work at Morris, Minnesota.

Methane is another important gas in the global carbon picture, and researchers in Watkinsville, Georgia, have been studying ways to improve the day-to-day estimates of methane and ammonia emissions from Southeast swine facilities. Anaerobic lagoons are considered to be sources of methane and nitrogen gases and aerosols. These studies improve our estimates of greenhouse gas emissions and assist producers, regulatory agencies, and designers in minimizing the impact of high-density animal production.

USDA economists in the Economic Research Service (ERS) this past year continued to assess the economic implications of how the agricultural economy is affected by climate change and examine the costs and benefits associated with efforts to reduce greenhouse gas emissions and sequester carbon. Key research objectives include assessing the farm sector impacts of using a national system of carbon permits to reduce greenhouse gas emissions and evaluating alternative policies for promoting carbon sequestration activities on agricultural lands such as converting pasture and cropland to forests and expanding the use of conservation tillage systems.

Forest Service (FS) researchers have been assessing global change effects on forest health and productivity. Factors such as drought, ozone, fire, site fertility, insects and diseases affect the health and productivity of California conifer forests. FS research documented significant changes in the growth and development of ponderosa and Jeffrey pine in response to ozone exposure and nitrogen deposition. Root biomass decreases with exposure to air pollution raising important questions about predisposing trees to drought induced mortality and related insect attacks. Air pollution can alter pine phenology such that, at the most extreme, an evergreen tree becomes functionally deciduous. The interaction of ozone and nitrogen pollution has serious implications for the storage of carbon in both soils and above ground in ecosystems subject to air pollution.

FS researchers have also been assessing predicting forest fires through improved ecosystem models. Dynamic simulations indicate that fire frequency could increase over much of the West and under the hotter scenarios, over many of the Eastern U.S. forests.

FS researchers have also looked at the potential for reducing greenhouse gas emissions from wood and wood processing. An analytical system was developed to evaluate the types and amounts of emissions generated during the processing and use of wood composites, allowing lumber and composites processing conditions to be optimized to reduce and control emissions currently being discharged.

Similarly, FS research has been assessing the role of recycling to reduce greenhouse gases. With 350 million tons of wood consumed in the United States annually, recycling of paper and wood has been shown through life cycle assessment to contribute greatly to reducing the amount of greenhouse gasses in the atmosphere. One major barriers to recycling paper is removing pressure sensitive adhesives from labels and envelopes, a problem affecting a significant portion of recycled paper. FS research is developing easily removable adhesives in recycling screening operations to solve this problem.

Lastly, FS researchers have also been exploring how to create biofuels from wood. Biofuels producing liquid fuels such as ethanol from wood could replace the fossil fuels that contribute to greenhouse gasses. Research is developing the fundamental knowledge required to economically and efficiently convert wood to ethanol. New recombinant strains of yeast were developed that can more rapidly ferment the two major sugar types in wood hydrolzates to ethanol at greater yield. This is extremely important because fermentation of these 2 types of sugars is essential to attaining maximum conversion rates and yields.

USDA's Research Objectives for FY 2001

USDA's planned program of work is divided into two areas: (1) the Global Change Research Program, which includes research on the carbon cycle, ecosystems, atmospheric chemistry, and the global water cycle; and (2) the proposed Climate Change Technology Initiative (CCTI).

Carbon Cycle Research. USDA currently spends $15.4 million on carbon cycle research and has proposed a $22 million increase in FY 2001. The goal is to improve the scientific understanding of how carbon is sequestered in agricultural soils, how soil carbon is measured and tracked over time, and how farm production decisions and government policy might help facilitate carbon sequestration in agricultural soils.

Carbon cycle science. The types of research that additional funding would support include the ARS collaborating with other Federal agencies to expand data and research on the role of agriculture in the carbon balance and define ways which farmers and ranchers can store carbon in agricultural soils. Special emphasis would be given to measuring the effects of management and conservation practices on carbon storage in cropland and grazing lands, particularly the long-term impacts of tillage and residue management systems on accumulation of organic carbon. Some of the major interests are: improving mathematical models for estimating current carbon stocks in agricultural soils, and the potential to store more, at scales ranging from the continental down to the single field; determining the impact of various soil, plant, and animal management strategies on carbon storage in soils; developing improved, economical techniques for measuring soil carbon; quantifying storage of atmospheric carbon in clay soils, and in carbonates and other inorganic forms; determining the carbon flows into and out of a range of soil types in a network of 20 observation sites to be established across the country; identifying which soil microbes are most important in cycling carbon in soil, and how to manage them for best practices; developing and applying new technologies for monitoring methane emissions from agricultural activities; and determining relationships among the cycling of carbon and nitrogen in agricultural systems.

Measurement and evaluation in agricultural soils and forest lands. Measuring soil carbon data across soil types, climate regimes, and management systems is essential to establish a scientific basis for a terrestrial carbon inventory, to conduct environmental and economic policy analysis, and for a market in carbon to develop. The Natural Resources Conservation Service (NRCS) cooperative soil survey data bases are building blocks needed to better understand and measure terrestrial carbon sinks. An enormous amount of work in inventorying the nation's soils has already been done over a long period of time. Proposed enhancements to these data bases, along with associated models and inventory and assessment products, are needed to analyze policies directed at carbon sequestration and provide scientifically grounded tools for potential carbon crediting or trading. NRCS would accelerate digitizing the county level soil surveys and update state level soil maps, which are the primary geospatial data layers linked to the national soils database. NRCS would complete the system by achieving on-line access and adding soil carbon data for major agricultural regions on major crops in common production systems. Carbon on rangelands and woodland would also be quantified. NRCS also would conduct evaluations, such as field validation and calibration, of modeling, remote sensing, and statistical inventory approaches to field level, regional and national scale carbon stock assessments that are sensitive to the land management practices and agronomic systems that affect soil carbon levels.

The FS would identify and quantify carbon sources, sinks and fluxes for all U.S. forest land, including marginal agricultural land and other potential conversion land use types. FS would expand the carbon accounting model and develop forestry carbon budget accounts based on expected land-use and product changes. FS would build on existing research and collaboration with industry, landowners, universities and other agencies to develop verifiable measure of carbon stock and fluxes.

Economics of carbon sequestration. ERS would assess the economic feasibility of U.S. climate change mitigation strategies focusing on the economic potential for U.S. carbon sequestration and emissions reductions in agriculture; the use of economic incentives to encourage sequestration on agricultural lands; and the potential to target existing USDA conservation programs towards greenhouse gas mitigation activities in the farm sector.

Climate Change Technology Initiative. USDA is requesting funding of $24 million to support efforts in three important areas: biomass, carbon sequestration, and agricultural practices aimed at reducing agriculture's vulnerability to climate change.

Biomass. An increase of $14 million would support USDA research on converting biomass to energy. FS would conduct research on small diameter and short-rotation trees, ways to improve feedstocks and feedstock production systems for biobased products and bioenergy, and conduct research to improve wood utilization and promote forest health. ARS would focus on biomass conversion technologies, develop more productive varieties and improved practices for perennial grasses and legumes in sustainable bioenergy/bioproduct crop production systems, and evaluate the associated environmental benefits.

Carbon Sequestration. The budget also proposes $6.0 million more for carbon sequestration activities by FS and the NRCS. NRCS would develop and conduct demonstration and pilot projects that focus on both carbon sequestering management production systems and on greenhouse gas abatement systems. Incentives, planning tools, and technical assistance for conservation systems that enhance soil carbon sequestration and reduce greenhouse gas emission, while also achieving water quality, wildlife, and other environmental benefits would be field tested and evaluated. FS would develop and demonstrate management options for improving direct sequestration of carbon in forest soils. FS would also identify and test methods of using forest soils for the direct storage of carbon, including burial, incorporation of organics, and other innovation concepts, in addition to the capture of carbon dioxide in biotic processes.

Agricultural Practices. Lastly, the budget proposes $4 million more to undertake research aimed at reducing agriculture's vulnerability to climate change. For example, ARS would develop simulation models and data bases suitable for predicting the effects of global change on agricultural ecosystems and develop new technologies to improve crop tolerance to extreme environmental conditions.

Best Management Practices

Carbon sequestration, and to some extent emissions reductions, are ancillary benefits of traditional conservation practices that are supported by USDA conservation programs, such as the Conservation Technical Assistance program that address the nation's working lands.

Erosion control practices that increase vegetative soil cover, such as residue management, cover crops, crop rotations, etc., increase soil carbon. Conservation tillage, especially continuous no-till, reduces soil carbon oxidation and emission of CO2 from the soil. Well-managed application of manure and other organic amendments also contributes to soil organic carbon while providing direct water quality benefits. The establishment, on cultivated cropland, of perennially vegetated buffers such as grassed waterways, grassed terraces, riparian buffers, field borders, contour buffers, cross wind trap strips, and filter strips also contribute to enhanced soil organic carbon while performing their designed erosion control, water quality, or wildlife habitat function. Restoring wetlands, grasslands, and forestlands to their natural state contributes to carbon sequestration, as each of these land cover types generally sequester more soil organic carbon than cultivated cropland. Protecting wetlands and grasslands from conversion to cropland also ensures that they continue to sequester carbon at higher rates than when cultivated. Improving grazing land management contributes to a larger soil carbon pool. Improving livestock production efficiency decreases methane emission. Protecting farmland from conversion to urban development potentially contributes to soil carbon sequestration as any built-on soil is permanently removed from the potential soil carbon pool.

The greenhouse gas mitigation benefits of best management practices can be significant. One of today's witnesses, USDA scientist John Kimble and others, have estimated that the overall potential to sequester carbon is 69 to 175 million metric tons per year, 4 to 11 percent of total annual U.S. emissions of greenhouse gasses. Grazing lands also have the potential to sequester significant amounts. The activities that can move toward these potentials are in many cases the best management practices just described, which USDA conservationists have advocated for many years because they improve soil, water and air quality. While the theoretical potential is great, the barriers to large increases in carbon sequestration and the development of a carbon market that would provide meaningful financial returns to producers include the uncertainties related to carbon measurement and verification and the current low market value of carbon.

Terrestrial Carbon Measurement (TCM) Project

I have mentioned the work USDA is doing to measure soil carbon at specific sites using soil testing and the larger scale estimation using models, such as CQUESTER. To develop more accurate and more recent national estimates of current carbon sequestration, USDA and university cooperators this year are estimating carbon sources and sinks in forests and agricultural soils under our TCM project.

The Forest Carbon Management (FCM) aspect of the project will expand on the existing FS carbon measurement infrastructure, which includes multiple data sets, such as the 1997 Forest Inventory and Analysis Program, and physical and economic models. The FS carbon stock estimate is a comprehensive estimate taking into consideration all carbon pools on all forested lands. Identifying individual management practices or projects and measuring their associated carbon is much more difficult in that most land managers implement a suite of practices simultaneously. One analytical task is to identify the area of land in the United States affected by various activities (e.g., fire, pests, harvesting, etc.) and partition the comprehensive U.S. carbon budget into these categories. A second task includes an evaluation of ongoing and proposed policies and programs as they relate to carbon sequestration.

The Agricultural Carbon Management (ACM) aspect of the project will provide scientifically credible estimates of agriculture soil carbon associated with human induced activities in agricultural land use change categories (i.e., cropland, conservation set-aside, pasture/range, wetlands, degraded) and land management intensities (i.e., tillage type, crop residue management, use of cover crops, crop rotations, fertilizer management). Carbon measurement will depend on detailed data from the 1997 National Resources Inventory. In addition, the ACM project will provide scientifically credible estimates of how a carbon market (through domestic and international policies) would affect land use and land management decisions and their associated impacts on agricultural soil carbon.

Mr Chairman, the Department very much appreciates your leadership on carbon sequestration and the increase in research intensity that you advocate. We generally support the objectives of your bill, S. 1066, which coincide with many of our current activities and plans. While we have some specific concerns, we would be pleased to work with you on strengthening your proposed legislation. That completes my comments and I would be happy to respond to questions.