Carbon trading could help fund the development of rural energy

WILLMAR -- West central Minnesota has much to gain if the United States were to place a cap on carbon dioxide emissions and join the market-driven, carbon trading system created by the Kyoto Protocol.

WILLMAR -- West central Minnesota has much to gain if the United States were to place a cap on carbon dioxide emissions and join the market-driven, carbon trading system created by the Kyoto Protocol.

It could attract billions of dollars to rural America and help build the infrastructure needed for renewable energy development, according to John Baumgartner, owner and founder of Baumgartner Environics of Olivia.

"It would put more money into renewable energy; attract more funding than any (other) legislation could,'' he told an audience at Bethel Lutheran Church in Willmar on Nov. 16. Baumgartner was among a panel of speakers at the West Central Regional Sustainable Development Partnership's annual meeting.

The citizen-based, University of Minnesota-supported initiative is looking for ways to promote an economically vibrant and healthy landscape for people in the region.

America's refusal to sign the Kyoto Protocol -- an international agreement to reduce emissions of greenhouse gases to stem global climate change -- comes at the expense of rural areas like ours, according to Baumgartner. He said his company's work in Europe has shown him that the benefits of carbon trading go mainly to rural areas. Companies are investing in agriculture to acquire carbon credits.


In carbon trading, a limit is set on the amount of carbon dioxide that can be emitted by a source. Companies that exceed their limit can buy carbon credits on an open market from those who stay below their limit. This penalizes those who pollute and rewards those who find ways to reduce carbon emissions.

Agriculture has many opportunities to acquire carbon credits through practices that close the carbon loop and keep carbon dioxide from the atmosphere, such as the planting of perennial crops.

In another example, Baumgartner said his firm worked with a European livestock producer to capture the emissions from a waste lagoon and obtain carbon credits for it..

Increasingly, carbon credits are also helping provide the capital for wind, solar and biomass energy development.

Baumgartner believes this area is rich in biomass and wind energy resources, and stands only to gain by helping develop the infrastructure needed for renewable energy.

His firm offers environmental engineering services to clients in agriculture. Baumgartner served as Minnesota's assistant commissioner of agriculture under Gov. Al Quie. He served as Midwest director of the Agricultural Stabilization and Conservation Service under President George H.W. Bush.

Economics favor the renewable energy industry's development, according to Baumgartner. He pointed out that in the 1940s and 1950s, oil and corn were valued at $1.50 per barrel and $1.50 per bushel respectively. In terms of the energy content of each, the price corresponds to 0.45 cents per "pound'' of energy from oil and 3 cents from corn.

At today's price of $60 a barrel oil and $2.50 a bushel corn, that same pound of energy costs 18 cents from oil and only 5 cents from corn.


The price difference is big enough to make renewable fuels a very competitive energy source, but the infrastructure still is lacking. Baumgartner said that carbon trading could help attract capital from all over the world to develop the needed infrastructure in rural communities.

Along with the economic benefits, he believes the U.S. has a moral responsibility to place a cap on carbon emissions and participate in carbon trading. "We represent 25 percent of the problem, but we're not going to pay the bill,'' he said of the U.S. refusal to sign the Kyoto Protocol.

He also expressed his concerns about climate change. He noted that current predictions show the climate in Minnesota changing to be more like that of present-day Oklahoma. Some may appreciate the warming, but he noted that Oklahoma has a much drier climate. Minnesota does not have the Ogallala Aquifer available, and consequently Minnesota's agriculture would suffer severely if this prediction proves true.

It's not just the fate of agriculture that is at stake, he noted. Climate change, he said, "is going to affect my children. They are on the line.''

What To Read Next
Get Local