The Washington State legislature has been busy this session considering new laws which aim to reduce greenhouse gas emissions and promote responsible stewardship of our environment.
The low carbon fuel standard (LCFS) would require that all of the diesel and gasoline sold in our state meet certain carbon intensity (CI) levels. While well intended, this policy has a history of inefficiencies and is could raise the cost of fuel. It also has a number of unintended consequences which Washingtonians may not realize.
According to the Washington State Farm Bureau, many farms today are rapidly moving toward green technologies and fuel efficiency measures in their day-to-day operations. In order to make that transition however, they need access to affordable diesel and gas to be able to afford these green investments.
That’s because we still need energy to grow our crops, power our equipment, and ship our products — that’s just a fact. In fact, energy accounts for nearly 30 percent of intermediate production costs on farms. When inputs like fuel become more expensive because of requirements like LCFS, farms have less to spend on new technology.
And it’s not just direct fuel costs that affect our available capital. Fertilizers that are key to crops also fluctuate with the cost of oil. In fact, fuel costs can be traced up and down the supply chain so even little increases can be magnified across inputs.
In times of lower input costs, farmers can invest in creating sustainable energy solutions that are also good for their business. In fact, farmers today are cutting costs and drastically reducing their energy bills by investing in the latest produce storage systems – some of which are controlled by computers. These systems keep their products fresh for market and efficiently use electricity, which lowers both overall input costs and emissions.
These are significant capital investments – all of which are risky. But that risk can be mitigated when market conditions are stable and input costs, principally fuel, are affordable.
We must protect our environment so we can produce good, healthy food. Yet policymakers must consider the consequences of their policies choices that increase fuel costs for farmers and prevent investment in innovative technologies that may ultimately bring down emissions in the long-run.