The United States House of Representatives passed a climate change bill entitled “The American Clean Energy and Security Act” in June 2009. The bill establishes a combined efficiency and renewable electricity standard which requires retail electricity suppliers to utilize 20% renewable energy by 2020. The objective of this study is to estimate the costs of the American Clean Energy and Security Act in crop production and the benefits of carbon sequestration under the legislation. This study especially evaluates the impact of the legislation on the North Dakota farm income under a Cap and Trade system with and without carbon sequestration. Three different carbon sequestration programs are evaluated to estimate the impact of each program on the net farm income in North Dakota: no-till farming, wetlands restoration and wood land establishment. The North Dakota Representative Farm Model operational a North Dakota State University was used to estimate the impact of the Cap and Trade legislation and evaluate the impact of the various carbon sequestration programs.