Transcript Managing Carbon in Agriculture

Managing Carbon in Agriculture: The Big
Picture
Challenges and Opportunities in Managing Agricultural
Operations for a Low-Carbon Economy
Jan Lewandrowski
USDA Global Change
Program Office
July 18, 2007
West Des Moines,
Iowa
Presentation at-a-glance
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Why agriculture should care about climate change
GHG mitigation: Appreciating the options in agriculture
Frameworks for managing carbon
Key concepts
Why agriculture should care about climate change
• Climate change and climate variability impact agricultural
production and land use.
• Crops and forests exist in an atmosphere that is increasing in
concentration of CO2.
• Agriculture and forests are important sources of GHG
emissions and carbon sinks.
• Agricultural and forest systems have significant potential to
address climate change with low-cost options for reducing
GHG emissions and increasing carbon sequestration.
Mitigation
Options
in Agriculture
Low-cost GHG
mitigation
opportunities include:
• Reduce GHG emissions
– Change manure managements
– Change livestock feeds
– Reduce nitrogen fertilizer use
• Increase carbon sequestration in:
– Agricultural Soils (conservation tillage)
– Afforestation/reforestation
– Forest management
• Renewable energy / energy efficiency
– Biofuels (liquid fuels, power generation from biomass)
– Wind
– Anaerobic waste digesters
Low-cost GHG mitigation opportunities – a picture:
Afforestation
$ /Ton of CO2
30
Biomass Offsets
25
20
CH4&N2O
15
Forest Management
10
Crop Management FF
5
Soil Sequestration
0
0
500
1000
1500
Emission Reduction in MMT CO2 Equivalent
•Assumes offsets are perfect substitutes
•Different strategies dominate at different price levels
(Slide supplied by and used with permission of B. McCarl)
2000
Mitigation Options: Appreciating the potential
1. Reducing N20 emissions: Organic and synthetic commercial fertilizer
Eq CO2 = 9.23 - 9.35 mt per mt nitrogen applied
2. Reducing CH4 emissions: Enteric fermentation
High emissions feed mix:
Low emissions feed mix:
Corn silage (50% grain)
Rye grain
Vetch Hay
Emissions per year:
Per head: 0.838 mt CO2
Corn silage (25% grain)
Barley grain light
Bahiagrass
Emissions per year:
Per head: 0.720 mt CO2
Reduced emissions per year: Per head: 0.118 mt CO2
Per 1,000 head: 118 mt CO2
Mitigation Options: Appreciating the potential
3. Reducing CH4 emissions: Manure management (Installing an
anaerobic waste digester
Ex: Wisconsin Dairy with 1,000 dairy cows, 500 heifers, and 500 calves
Emissions before digester installation:
System
Anaerobic Lagoon
Liquid/Slurry/Deep pit
Paddock/Range/Drylot
Methane
6,684 mt CO2
2,211 mt CO2
79 mt CO2
Emissions after digester installation:
0 mt CO2
Nitrous Oxide
71 mt CO2
71 mt CO2
977 mt CO2
0 mt CO2
Conceptual frameworks:
• Encourage voluntary actions and markets
– This has been the approach favored to date
• Cap-and-trade systems
– Set over-all limit on emissions (could apply to sectors, regions, country)
– Issue permits equal to that emissions level and require all emitters to have
a permit for all covered emissions
– Distribute emissions permits via an allocation rule or auction
– Allow entities to trade permits - those needing additional permits buy/ those
with excess permits sell
• Government incentive payments
– Government sets an emissions reduction target and offers entities carbon
payments to meet it – higher targets require higher payments
– Conceptually similar to USDA’s conservation programs
• Regulatory approaches
– Require entities to meet emissions reductions targets
– Example: mandating fuel efficiency standards
– Generally the most difficult to accomplish politically
USDA’s conservation and energy programs
• Conservation Reserve Program
– Enrollment criteria (EBI) rewards bids with carbon benefits
– Continuous sign-up provision includes program to afforest 500,000
acres of bottomland hardwood
• Environment Quality Incentives Program
– Field staff directed to consider carbon benefits in enrollment
– Anaerobic digesters added to approved conservation practices
– Farmers can get paid for adopting nutrient management systems
• 9006 Renewable Energy and Energy Efficiency Program
– Awards competitive grants, loans, and loan guarantees to farmers,
ranchers and small business owners to install renewable energy
systems and improve energy efficiency
– 2004 awards included:
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$21 million in grants for 37 digesters, 37 wind power projects, and 20 other
renewable energy systems
• $1.8 million in energy efficiency grants to 48 individuals/small businesses.
Legislation proposed in the 110th Congress
• Senate
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S. 1766 (Bingaman / Specter)
S. 280 (Lieberman / McCain)
S. 309 (Sanders / Boxer)
S. 317 (Feinstein / Carper)
S. 485 (Kerry / Snowe)
• House
– HR. 620 (Oliver / Gilchrest)
– HR. 1590 (Waxman)
• Depending on the Bill - provisions include setting emissions limits,
implementing cap-and-trade systems, allowing for offsets from
agriculture and forestry, and increasing biomass energy.
Private, State, and regional activities.
• Private markets: Chicago Climate Exchange
– Presently the only formal carbon market in the U.S.
– Voluntary to join but legally binding for members
• State: California Global Warming Solutions Act of 2006
– Set statewide GHG emissions cap for 2020, based on 1990 emissions
by January 1, 2008.
– Adopt mandatory reporting rules for significant GHG sources by
January 1, 2009.
– Adopt a plan by January 1, 2009 indicating how emission reductions
will be achieved via regulations, market mechanisms and other actions.
– Adopt regulations by January 1, 2011 to achieve the maximum
technologically feasible and cost-effective GHG reductions, including
provisions for using both market and alternative compliance
mechanisms.
– Prior to implementation, requires evaluation of impacts on California's
economy, the environment and public health; equity
Private, State, and regional activities.
• Region: Regional GHG Initiative (10 Northest and MidAtlantic states)
– Starting in January 2009, limits emissions from coal-fired, oil-fired, and
gas-fired power plants at 121 million tons annually
– Limit will be implemented via a cap-and-trade system
– System explicitly allows for emissions offsets from reforestation and
methane capture for farming facilities.
Key concepts:
• Offsets
– Associated with, but are outside of, cap-and trade systems
– Allows covered entities to meet some of their system obligations with
emissions reductions and/or carbon sequestration obtained from entities
outside the system
– Allows entities outside of system to participate
– Lowers the cost to those inside
• Measurement
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You cannot trade what you cannot quantify
Approaches: direct, models, engineering approaches
Approaches typically trade-off accuracy and cost
Related issues include verification, uncertainty, and bias
Key concepts:
• Permanence: To mitigate GHG emissions, carbon sequestered in
terrestrial systems must remain out of the atmosphere.
– Carbon in terrestrial systems can be released through natural and human
driven processes.
– Allowing carbon sequestration in a GHG mitigation program requires
accounting for the possibility/inevitability that the carbon will be emitted at
some point in the future
– Solutions include banking credits, discounting relative to emissions
reductions, annual rental payments, insurance policies against future
releases.
• Additionality: Are responses to a policy the result of that policy or
would they have happened without it?
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Want to motivate new actions that contribute toward GHG mitigation.
Do not want to penalize early actions.
Want to avoid moral hazard.
Can be difficult to assess what would have happened in a situation that did
not happen.
Thank you
Jan Lewandrowski
USDA Global Change Program Office