Beyond Project-Based Offsets for Ag

1
Beyond Project-Based Offsets for Ag Forestry

• Derik Broekhoff
• Biosequestration Through GHG Offsets
• April 29, 2009

2
Other Options

• Sectoral Crediting
• Capping the Ag Forestry Sectors
• Incentive Payments
• Set asides
• Auction revenues
• Other programs

3
Sectoral Crediting

• Set targets for overall carbon storage in
  forests, cropland, pastureland, ecosystems, etc.
• Issue offset credits for net storage maintained
  above the target

4
Sectoral Crediting

• Advantages
• May be easier to deal with baselines,
  additionality, leakage, permanence
• Challenges
• Monitoring measurement?
• Who coordinates implements abatement?
• Who receives offset credits?
• Who bears risks liabilities?
• Reconciling with offset usage limits

5
Capping Ag Forestry

• Require landowners to surrender allowances if
  their carbon stocks decrease
• Can combine with a system of credits (offsets)
  for carbon stock increases

6
Capping Ag Forestry

• Advantages
• Easier to deal with baselines, additionality,
  leakage, permanence
• Still get cost containment
• Avoids offset limits (ag forestry built in)
• Challenges
• Measurement monitoring
• Same kinds of institutional design issues
  project-based or sectoral?

7
Incentive Payments

• Pay for abatement using subsidies
• Set-asides, auction revenues, other
• Based on performance
• e.g., tons of carbon sequestered
• Or on practices implemented
• e.g., no-till improved forest management
• Or combination

8
Incentive Payments

• Advantages
• Dont have to worry about cap integrity
• Achieves abatement above and beyond cap
• Possibly lower transaction costs
• Disadvantages
• No cost containment
• Still have to worry about cost-effectiveness
• May not achieve cost-effective potential

9
Questions

• How concerned are we about the capacity of ag
  forestry reductions to meet core offset criteria?
  
• How important is cost containment?
• What role should agriculture and forestry play in
  a national abatement strategy?
• Central or ancillary?