Impacts of Climate Change Legislation on US Agricultural Markets: Sources of Uncertainty

Abstract

Climate change legislation could have important effects on US agriculture. The impacts depend on the particular features of any final legislation, how it is implemented and how individuals and firms respond. The American Clean Energy and Security (ACES) Act, approved by the US House of Representatives in 2009, would establish a regulatory framework intended to reduce greenhouse gas (GHG) emissions. To evaluate the bill's impacts on the US agricultural sector, the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI‐MU) used an extended version of its modeling system to evaluate a wide range of possible scenarios over the 2010‐2030 period. The analysis shows that altering a few key assumptions can lead to qualitatively different estimates of the bill's impact.