Implications of Climate Change Legislation for U.S. Cotton Growers

Pending legislation on climate change mitigation would affect cotton producers in multiple ways. First, costs of electricity, fuel, and fertilizers will rise, affecting both growers and ginners. The potential for growers to sell carbon offsets, however, represents an additional source of income. Offsets from tree planting could significantly reduce cotton acreage in some areas, while leading to higher cotton prices. This study evaluates implications of these countervailing effects on producer returns.Many negative effects of legislation could be reduced or delayed substantially, depending on how programs are implemented. However, large uncertainties about implementation translate into large uncertainties about how cotton producers will be affected.