r ecent e fforts in us c limate p olicy : i mplications for f orestry and a griculture lydia olander...
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RECENT EFFORTS IN US CLIMATE POLICY: IMPLICATIONS FOR FORESTRY AND AGRICULTURELydia OlanderSenior Associate DirectorNicholas Institute, Duke University
5th Forest and Agriculture Greenhouse Gas Modeling Forum April 2009
STATE AND REGIONAL INITIATIVES
US CAP-AND-TRADE POLICY
CONFERENCE OF THE PARTIES
International
Policy
1. Annex 1 targets
2. Developing country participation
3. REDD
4. CDM
5. US Critical
U.S. CAP-AND-TRADE
Inside the cap Emissions: power plants, factories, oil
refineries (gasoline)
Outside the cap Domestic
Land management emissions and sinks: forestry, agriculture, landfills
Emissions: fugitive emissions, industrial N2O International
Industry and energy in developing countries Deforestation in developing countries
Offsets
OUTSIDE THE CAP
POLICY OPTIONS: OUTSIDE THE CAP
Offsets
Allocation
Complement
ary Policy Under a mandatory
policy the term offset describes a
reduction in emissions or increase in
sequestration of GHGs produced by an entity outside of a compliance cap that is used by a capped entity to
offset its emissions.
POLICY OBJECTIVES FOR OFFSETS
1. Achieve more mitigation without increasing costs
ALTERNATIVE OFFSET SCENARIOSEPA ANALYSIS OF THE CLIMATE SECURITY ACT OF 2008: S. 2191 (MARCH 2008)
No offsets
15/15
Unlimitedoffsets
ACTIVITY TYPES (AND METHODOLOGIES)
Forests Afforestation/reforestation Forest management Avoided deforestation
Landfills Livestock Urban Forests Co-digestion (anaerobic digestion of manure
and waste) Natural gas transport fugitive emissions Coal mine methane
FROM EPA (2005) GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE
0 500 1,000 1,500 2,000 2,500
MMT CO2 reductions relative to baseline
$1
$5
$15
$30
$50
$/t
CO
2
National Mitigation Cost Curve for Agriculture, Forestry, and Biofuel Offsets
Agricultural soil carbonsequestration
Forest management
Fossil fuel mitigation fromcrop production
Agricultural CH4 and N2Omitigation
Afforestation
Biofuel offsets
POLICY OBJECTIVES FOR OFFSETS
1. Achieve more mitigation without increasing costs
2. Bring in important constituencies
3. Provide a bridge to low carbon technologies (provide rapid results) Land use critical for this
CONCERNS ABOUT OFFSETS
1. Will work too well Diverts effort away from capped sector,
reduces investment in technology Question of the cap not a problem with offsets.
2. Won’t work Projects too complicated or too costly, or too
discounted to bring in sufficient participation
3. Not real reductions
ENVIRONMENTAL INTEGRITY CONCERNS: ARE REDUCTIONS “REAL”?
Project-based offset system
Voluntary transaction between two parties
Factors that can undermine net real reductions
Leakage: diverted emissions beyond project boundaries
(Non)Additionality: parties being paid for actions they would have taken anyway
Permanence: release of stored carbon (intentionally or accidentally) before or after project ends
SOLUTIONS TO THE “REAL REDUCTIONS” PROBLEMS
Quantitative limits Qualitative limits Accounting Adjustments
Discounting credits for compliance useBuffers (set aside allowances to cover
losses) Accept: Systemwide adjustment of
aggregate cap
WAXMAN DRAFT BILL _ OFFSETS1. Allows maximum 2 billion tons, split evenly
between domestic and international offsets
2. Credits 4 tons for every 5 submitted
3. Domestic program• Integrity Advisory Board & Administrator• Additionality: legal, 2009, common practice• Performance Std Baselines• Impermanence coverage (buffers or
insurance)• Adjustments for uncertainty (discounts)• Adjustments for leakage (discounts)• Early credits _ State programs (CCAR/RGGI)
4. International programs• Bilateral/multilateral• Sectoral offsets• UNFCCC (CDM) offsets• Reduced Deforestation offsets• Reduced Deforestation supplemental
ELIGIBLE ACTIVITIES?
ACTIVITY QUESTIONS
What types of activities should be eligible for the offsets program? How much potential mitigation will it provide? What is enough measurement certainty?
If we are sure about directional change but not quantity can we encourage activity based on the expected average benefit and a conservative discount?
Can we develop a reasonable performance standard against which to compare project performance? Are sufficient data available at national and regional
levels to develop a performance standard baseline? Do we have enough information to be reasonably
confident that leakage and impermanence risks can be estimated?
METHODOLOGY QUESTIONS What kind of performance baseline can we develop
for an activity given the data we have? How specific can we be to the context of that activity
(region, legal setting)? Do we know enough about drivers of leakage and
elasticities to reasonably predict leakage for the activity nationally or regionally? Can we develop look up tables to be used by
methodologies? Do we know enough about risks of impermanence
to estimate buffer set-asides(frequency of fires, storms, pest outbreaks?)
POLICY QUESTIONS
How much mitigation can domestic offsets supply?
How will an offsets program interaction with other policies? Biofuels production and renewable fuels standards Adaptation programs CRP/WRP Clean Water Act (TMDL)
Can we assess the effectiveness of an offsets program at a national level? How large does the program need to be before we
can distinguish its signal from the noise of other land use drivers?
Will we be able to distinguish leakage?
Energy supply; 26%
Transport; 13%
Residential and commercial buildings 8%
Industry; 19%
Agriculture; 14%
Forestry; 17%
Waste and wastewater 3%
Energy supply
Transport
Residential and commercial build-ings
Industry
Agriculture
Forestry
Waste and wastewater
EMISSIONS FROM DEFORESTATION AND LAND USE CHANGE
Meaningful participation by developing countries
USA
China
Indo
nesia
Brazil
Russia
Japa
nIn
dia
Germ
any
Mal
aysia
Canad
a
-1000
0
1000
2000
3000
4000
5000
6000
7000
Forestry and land use change CO2 emissions
Other CO2 emissions
Meyer-Mediera, et al. 2009. Data from 2000
AREAS OF AGREEMENT
Voluntary participation of forest countries for foreseeable future
Payments by developed countries for reductions in developing country forest emissions
National level accounting• Can be measured against a national reference or baseline
to determine performance• Allows reconciliation of subnational/project activities with
national assessments • Helps address leakage and additionality
WHAT SCOPE?
Maintenance Management
QUESTIONS
Could the US do national accounting as an assessment of the land use portion of an offsets program?
Will we have the remote sensing capabilities to detect other land use changes? Which ones?
Do we have sufficient knowledge on carbon density and interactions with other GHGs to expand beyond deforestation? How far? Deforestation->Degradation/Forest Management-
>Agricultural practices->pasture/grasslands->wetlands?
THANK YOU
2007 FARM BILL SEC. 2709. ENVIRONMENTAL SERVICES MARKETS.
USDA authorized to facilitate private sector markets for ecosystem services
(b) Establishment- The Secretary shall establish guidelines under subsection (a) for use in developing the following:
`(1) A procedure to measure environmental services benefits.
`(2) A protocol to report environmental services benefits.`(3) A registry to collect, record and maintain the benefits
measured.
A new Office of Ecosystem Services and Markets
WHAT BASELINE?
Table 1. Carbon Emissions and Carbon Stocks: Top 20 Countries
Forest carbon Emissions Per Year 2000-2005 (MtC)a Carbon Stocks in 2000 (MtC)c
Country MtC/yr Rank % of Total Reportedb
Country MtC Rank % of Total Reportedd
Brazil 519.1 1 24.81% Brazil 82510 1 26.40% Indonesia 485.7 2 23.21% Congo Dem. Republic 36672 2 11.73% Nigeria 123.2 3 5.89% Indonesia 25397 3 8.12% Congo Dem. Republic 86.6 4 4.14% Peru 13241 4 4.24% Burma (Myanmar) 65.7 5 3.14% Angola 11767 5 3.76% Zambia 63.5 6 3.03% Colombia 11467 6 3.67% Cameroon 60.4 7 2.89% Bolivia 9189 7 2.94% Philippines 49.6 8 2.37% Venezuela 7886 8 2.52% Venezuela 46.1 9 2.21% Central African Repub. 7405 9 2.37% Bolivia 41.3 10 1.97% Papua New Guinea 7075 10 2.26% Ghana 41.1 11 1.97% Zambia 6378 11 2.04% Tanzania 37.6 12 1.79% Cameroon 6138 12 1.96% Ecuador 34.6 13 1.65% Mexico 5790 13 1.85% Papua New Guinea 32.6 14 1.56% Congo 5472 14 1.75% Honduras 32.3 15 1.55% Mozambique 5148 15 1.65% Malaysia 31.3 16 1.50% India 5085 16 1.63% Paraguay 28.2 17 1.35% Burma (Myanmar) 4867 17 1.56% Uganda 26.3 18 1.26% Malaysia 4821 18 1.54% Angola 24.6 19 1.17% Gabon 4742 19 1.52% Cambodia 23.2 20 1.11% Nigeria 3952 20 1.26%
~~~~~~~~~~~~~~~~
Based on historic emissions from deforestation Or
Estimating future risk of deforestation (based on stock)
Figure from: Murray, Olander, and Lawlor. 2008. A Core Participation Requirement for Creation of a REDD market. Nicholas Institute Policy Brief
BASELINE APPROACHES
Griscom et al. 2008 Implications of REDD baseline methods for different country circumstances during an initial performance period
Entity Type Baseline Additionality Pools Included A Reversal-Uncertainty-Leakage
1605(b) Registry Base-year Base-year ■ ■ ■ ■ ■ ■ - - -
GFC Registry Base-year Base-year ■ ■ ■*■* - - -
CCX FullProtocol
Base-year Base-year ■ ■ ■* X X -
CCAR FullProtocol
Single-practice Performance Standard
Regulatory ■ ■ ■ ■* ■* ■* - X X
VCS FullProtocol
Single-practice Performance Standard
Regulatory, Barriers, Common Practice
■ ■* ■*■* ■* ■* X - X
HFF FullProtocol
Cohort Group Performance Standard
Cohort Group Performance Standard
■ ■ ■ ■ ■ ■* - - X
RGGI FullProtocol
Base-year Regulatory,Base-year/ FIA mean
■ ■ ■* ■* X - X
Overview of key components of seven protocols. Carbon pools include:■ – Live Tree; ■ – Belowground; ■ – Dead Tree; ■ – Litter; ■ – Soil; ■ – Wood Products.Optional pools are denoted with an asterisk.
FOREST MANAGEMENT PROTOCOLS EXAMINED
CUMULATIVE CREDITABLE CARBON
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
CCX GFC 1605b HFF CCAR VCS RGGI
av
ea
rag
e a
nn
ua
l cre
dit
ab
le c
arb
on
(me
tric
to
ns
ha
-1 y
r-1
)
Required Pools
All Pools
0
5,000
10,000
15,000
20,000
25,000
0 25 50 75 100
Year
met
ric to
ns c
arbo
n
CCAR protocolGross Carbon/yrCarbon in allowable poolsBaselineUncertainty(leakage, buffer)
COP 14 _ CATCH 22
SBSTA: Subsidiary Body for Science and
Tech Advice
AWG-LCA: The
Negotiators
Can’t recommend methodologiesfor measuring, monitoring, baselines …until they know the policy scope
Can’t develop policy scopeuntil they better understandthe methodologies