Assignment 05.1 - Assignment 5 Global Processes rmf34...

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Assignment 5 – Global Processes rmf34 – Robert M. Freeman 1. Why would a group of energy power companies agree to pay farmers not to till the soil? Why a price of $3-5 per acre/per year? Energy power companies agree to pay farmers to not till the land because they are subject to laws that govern and limit the yearly emissions that a factory or industrial business can produce. They must either emit less than or equal to their assigned amount, or they must purchase what are termed “carbon credits” from areas that are allowed to sell them. Farmers are allowed to sell carbon credits because they can control their behavior. If a famer does not till his land, and produces far fewer greenhouse gases as the carbon built up in the soil does not get released back into the atmosphere. Because of this saving in greenhouse gas emissions, governments around the world have decided to act to positively enforce the reduction of greenhouse gas emissions. This incentivizes by the monetary compensation granted to those farmers who are allotted carbon credits that are available for sale on the market. This is where the energy companies come in. They need more credits and they’re willing to pay the famers for their credits. The rationale behind the $3-$5 a year is the following:
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Assignment 05.1 - Assignment 5 Global Processes rmf34...

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