Managing Carbon in Agriculture: The Big Picture

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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

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Presentation at-a-glance

• Why agriculture should care about climate change
• GHG mitigation Appreciating the options in
  agriculture
• Frameworks for managing carbon
• Key concepts

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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.

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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

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Low-cost GHG mitigation opportunities a
picture

• Assumes offsets are perfect substitutes
• Different strategies dominate at different price
  levels
• (Slide supplied by and used with permission of
  B. McCarl)

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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) Corn
  silage (25 grain)
• Rye grain Barley grain light
• Vetch Hay
  Bahiagrass
• Emissions per year
  Emissions per year
• Per head 0.838 mt CO2
  Per head 0.720 mt CO2
• Reduced emissions per year Per head
  0.118 mt CO2
• Per 1,000 head 118 mt CO2

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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
  Methane Nitrous Oxide
• Anaerobic Lagoon 6,684 mt CO2
  71 mt CO2
• Liquid/Slurry/Deep pit 2,211 mt CO2
  71 mt CO2
• Paddock/Range/Drylot 79 mt CO2
  977 mt CO2
• Emissions after digester installation
• 
  0 mt CO2 0 mt CO2

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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 USDAs conservation
  programs
• Regulatory approaches
• Require entities to meet emissions reductions
  targets
• Example mandating fuel efficiency standards
• Generally the most difficult to accomplish
  politically

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USDAs 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
• 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.

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Legislation proposed in the 110th Congress

• Senate
• 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.

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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

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Private, State, and regional activities.

• Region Regional GHG Initiative (10 Northest and
  Mid-Atlantic 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.

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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
• 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

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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?
• 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.

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Thank youJan LewandrowskiUSDA Global Change
Program Office