Transcript Energy and Climate- Solutions from the Land

Energy and ClimateSolutions from the Land
Nuffield Australian Farmers
Conference
March 8, 2010
Ernie Shea
25x’25 Project Coordinator
25x’25: a National Alliance
Formed through a grant from the Energy
Future Coalition
Organized to explore agriculture and
forestry’s role in energy production
Evolved to now include a diverse
collection of agricultural, forestry,
conservation, environment and business
organizations and leaders
New Energy Future
Fossil fuel resources are finite and diminishing
Global energy consumption is increasing (nearly 60%
by 2030)
The world population is growing (9.1 billion by 2050)
Fast-developing economies like India and China are
demanding more resources
Greenhouse gas emissions are increasing (World
carbon dioxide emissions expected to increase by
1.9% annually between 2001 and 2025)
Our Vision:
By the year 2025, America’s farms, ranches
and forests will provide 25 percent of the
total energy consumed in the U.S. while
continuing to produce safe, abundant and
affordable food, feed and fiber.
25x’25
This is a food, feed, fiber and fuel
vision, that is economically viable for
our society.
With emerging technology we can
produce multiple commodities.
25x’25 is a BIG goal:
2004
5.74 Quads
Renewable Energy
99.7 Quads
Total
Energy
Consumed
2025
31.7 Quads
Renewable Energy
127.0 Quads
Total Energy
Consumed
We will meet this goal by:
Producing transportation fuels
Harnessing wind energy
Converting biogas emissions
Capturing solar, hydro, and
geothermal energy
Providing biomass for generating
heat and power
25x’25 Future
A 25x’25 Energy Future Means:
$700 billion in annual economic growth
4-5 million new jobs
100 billion gallons of domestic biofuels
15.45 quads of renewable electricity
1 billion ton reduction in GHG emissions
Governors’ Endorsements
State Legislature Resolutions
25x’25 is now a national renewable
energy goal!
Passed by Congress as part of HR6
Signed into law by
President Bush on
December 19, 2007
Critical Challenges & Opportunities
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Biofuel pushback
Sustainability issues
Woody biomass contributions
Role of agriculture and forestry in a
reduced carbon economy
Copenhagen Statement
“Forestry and agriculture are where poverty
reduction, food security and climate
change come together and must be
addressed in an integrated fashion”……
(key message to negotiators from the ag and
forestry communities, COP 15, Dec. 14, 2009)
25x’25 Carbon Work Group
Charge: analyze agriculture and forestry’s
role in a reduced-carbon economy and
develop recommendations for how each
sector can capitalize on efforts to reduce
and capture carbon and greenhouse gas
emissions.
Areas of Focus
Ag and forestry impacts and opportunities;
Mechanisms to manage GHG emissions;
How ag and forestry could best participate
in emerging carbon markets; and
Guiding principles and policy imperatives
Carbon Work Group Key Findings
• Agriculture and forestry are uniquely
positioned to deliver low-cost, near term and
valuable solutions from the land:
–Energy and national security
–Economic development
–Environmental services
–Energy efficiency
• Under the right policy platform agriculture and
forestry have much to gain from this
opportunity.
Ag and forestry- responsible for 7
percent of total U.S. GHG emissions
Source of U.S. GHG Emissions by Sector
U.S. Territories
1%
Residential
Commercial 5%
6%
Electric Power
Industry
34%
Agriculture
7%
Electric Power Industry
Transportation
Industry
Agriculture
Commercial
Residential
Industry
19%
U.S. Territories
Transportation
28%
Source: EPA 2007
Have the potential to offset 10 - 25 percent of
total annual U.S. GHG emissions
Ag Reduction Opportunities
Sequestration
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Conservation tillage and crop rotations
Cover crops
Grazing practices
Biochar
Avoided emissions
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Biofuel production
Thermal bio-power and bio-heat
Renewable electrical power
Emission reductions
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Manure management
Fertilizer practices
Carbon Policy Imperatives
Economically viable
Include emission reductions, biological
sequestration and avoided emissions
Be outcome oriented and technology
neutral
Must be enforceable and allow ag and
forestry to deliver reductions
Recognize early actors
Primary Challenges
• Costs
– Changes in operating practices
– Tracking and selling offsets
– Increased input cost (esp. fuel and fertilizer)
• Getting the correct enabling policy in place
• Development of viable markets
• Informing ag and forest sectors of opportunities,
challenges, alternatives and consequences
• Shaping our own destiny
America is on a path to a lowcarbon energy future that aims to:
improve national security
strengthen the economy
contribute positively to the quality of life
provide a cleaner environment
What is taking us there?
Administration’s Energy Goals
Congressional Actions
EPA Actions
Supreme Court and Federal Appeals
Court Actions
Congressional Action
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Waxman-Markey (June ’09)
Kerry- Boxer (Sept. ’09)
Stabenow “CEPA”
Kerry-Lieberman-Graham bill
Collins-Cantwell Cap and Dividend bill
Energy- only approach
Unresolved Policy Issues
Carbon price mechanism
Renewable Energy Incentives (RES)
Transmission Upgrades
Definition of eligible biomass
Indirect land use issues
Costs and impacts to economy
Nukes and Clean Coal
Where are we?
• Renewable energy now 10.5 percent of total
U.S. energy production
• Sheen on “bioenergy” solutions is fading;
• Policy makers focusing on “ultra cleans”
• Ag is a divided house; defensive strategies
• Food, feed, fiber, energy and climate challenges
not being managed in an integrated fashion.
• Lack a comprehensive national energy plan
What’s coming?
• Pressure to deliver sustainable energy
solutions will increase
• Climate change challenges will escalate
• $2 trillion global clean energy market
• China is rushing to capture this market
• Emerging opportunity to be compensated
for environmental services
Potential Gross Revenue
Potential Gross Revenue for Agriculture and Forestry Sectors
$80.00
$70.00
$61.72
$60.00
Total Potential Revenue $50.00
from Emission Reductions
$40.00
(US $ Billion)
Total Revenue @ $25 a Ton
(US $ Billion)
Total Revenue @ $15 a Ton
(US $ Billion)
Total Revenue @ $5 a Ton
(US $ Billion)
$30.00
$24.69
$20.00
$10.00
Total Revenue @$35 a Ton
(US $ Billion)
$3.53
$8.82
$0.00
1% 3% 5% 7% 9% 11% 13% 15% 17% 19% 21% 23% 25% 27% 29%
Percent of Total U.S. Emission Reductions from Agriculture and Forestry
Source: EPA 2007
Carbon as a Revenue Crop
Value of Agricultural Products
70
Value (billions of Dollers)
60
50
40
30
20
10
0
Rice
Wheat
Swine
Soybeans
Carbon*
Milk and Corn (grain)
Cattle
Dairy
Data source: 2007 Census of Agriculture, USDA NASS Febuary 2009;
*Carbon estimate based on 25x25 derivation of 20% x 7 billion tons/yr x $20 ton
UT-25x’25 Study
Crop Net Returns by Selected Scenario:
2010 – 2025
250
225
$ Billion
200
175
Baseline
150
Multiple Offsets/RCN
125
Supreme Court/EPA
100
75
Year
Regional impacts of Cap-and-Trade
predominantly positive
Total Net Returns*, 2025
Multiple Offsets / RCN Forage Replacement
changes from baseline
* Includes agriculture, livestock, forest residues, methane
However, regional impacts vary by
livestock treatment
Total Net Returns*, 2025
Multiple Offsets / RCN Herd Reduction
changes from baseline
* Includes agriculture, livestock, forest residues, methane
Points to Ponder
We are on a path to a low carbon energy
future
Multiple drivers for change
Regulatory solution looming if Congress fails
to act
Global Climate Change talks continuing
Ag and forestry are well positioned to deliver
solutions to climate change
America wants and needs a
new energy future that is:
cleaner
improves national security
strengthens the economy
contributes positively to the quality of life
Agriculture can contribute to these
outcomes!
www.25x25.org