Transcript Recent Efforts in US Climate Policy

RECENT EFFORTS IN US CLIMATE
POLICY:
IMPLICATIONS FOR FORESTRY AND
AGRICULTURE
Lydia Olander
Senior Associate Director
Nicholas Institute, Duke University
5th Forest and Agriculture Greenhouse Gas Modeling Forum
April 2009
STATE AND REGIONAL INITIATIVES
US CAP-AND-TRADE POLICY
International
Policy
1. Annex 1
targets
2. Developing
country
participation
3. REDD
4. CDM
5. US Critical
CONFERENCE
OF THE
PARTIES
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
Complementary
Policy
Allocation
Offsets
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 SCENARIOS
EPA ANALYSIS OF THE CLIMATE SECURITY
ACT OF 2008: S. 2191 (MARCH 2008)
No offsets
15/15
Unlimited
offsets
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
National Mitigation Cost Curve for Agriculture, Forestry,
and Biofuel Offsets
$/t CO2
$50
Agricultural soil carbon
sequestration
$30
Forest management
$15
Fossil fuel mitigation from
crop production
$5
Agricultural CH4 and N2O
mitigation
Afforestation
$1
0
500
1,000
1,500
2,000
MMT CO2 reductions relative to
baseline
2,500
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
Will work too well
1.


Won’t work
2.

3.
Diverts effort away from capped sector, reduces
investment in technology
Question of the cap not a problem with offsets.
Projects too complicated or too costly, or too discounted
to bring in sufficient participation
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 use
Buffers (set aside allowances to cover losses)
 Accept:
Systemwide adjustment of
aggregate cap
WAXMAN DRAFT BILL _ OFFSETS
1.
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?



Can we develop a reasonable performance standard
against which to compare project performance?


If we are sure about directional change but not quantity can
we encourage activity based on the expected average benefit
and a conservative discount?
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?

EMISSIONS FROM DEFORESTATION AND
LAND USE CHANGE
Waste and wastewater
3%
Forestry;
17%
Energy supply;
26%
Energy supply
Transport
Residential and
commercial buildings
Industry
Agriculture;
14%
Agriculture
Transport;
13%
Forestry
Waste and wastewater
Industry;
19%
Residential and
commercial buildings
8%
7000
6000
5000
4000
3000
2000
1000
0
-1000
Meyer-Mediera, et al. 2009. Data from 2000
Forestry and land use
change CO2 emissions
Other CO2 emissions
Meaningful
participation
by developing
countries
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)
Country
MtC/yr
Brazil
Indonesia
Nigeria
Congo Dem. Republic
Burma (Myanmar)
Zambia
Cameroon
Philippines
Venezuela
Bolivia
Ghana
Tanzania
Ecuador
Papua New Guinea
Honduras
Malaysia
Paraguay
Uganda
Angola
Cambodia
519.1
485.7
123.2
86.6
65.7
63.5
60.4
49.6
46.1
41.3
41.1
37.6
34.6
32.6
32.3
31.3
28.2
26.3
24.6
23.2
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
a
% of Total
b
Reported
24.81%
23.21%
5.89%
4.14%
3.14%
3.03%
2.89%
2.37%
2.21%
1.97%
1.97%
1.79%
1.65%
1.56%
1.55%
1.50%
1.35%
1.26%
1.17%
1.11%
Carbon Stocks in 2000 (MtC)
Country
Brazil
Congo Dem. Republic
Indonesia
Peru
Angola
Colombia
Bolivia
Venezuela
Central African Repub.
Papua New Guinea
Zambia
Cameroon
Mexico
Congo
Mozambique
India
Burma (Myanmar)
Malaysia
Gabon
Nigeria
~~~~~~~~~~~~~~~~
MtC
82510
36672
25397
13241
11767
11467
9189
7886
7405
7075
6378
6138
5790
5472
5148
5085
4867
4821
4742
3952
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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
c
% of Total
d
Reported
26.40%
11.73%
8.12%
4.24%
3.76%
3.67%
2.94%
2.52%
2.37%
2.26%
2.04%
1.96%
1.85%
1.75%
1.65%
1.63%
1.56%
1.54%
1.52%
1.26%
BASELINE
APPROACHES
Griscom et al. 2008
Implications of
REDD baseline
methods for
different country
circumstances
during an initial
performance period
FOREST MANAGEMENT
PROTOCOLS EXAMINED
Entity
Type
Baseline
Additionality
Pools Included A
1605(b)
Registry
Base-year
Base-year
■ ■ ■ ■ ■ ■
-
-
-
GFC
Registry
Base-year
Base-year
■ ■
■*■*
-
-
-
CCX
Full
Protocol
Base-year
Base-year
■ ■
■*
X
X
-
CCAR
Full
Protocol
Single-practice
Performance
Standard
Regulatory
■ ■ ■ ■* ■* ■*
-
X
X
VCS
Full
Protocol
Single-practice
Performance
Standard
Regulatory,
Barriers,
Common
Practice
■ ■* ■*■* ■* ■*
X
-
X
HFF
Full
Protocol
Cohort Group
Performance
Standard
Cohort Group
Performance
Standard
■ ■ ■ ■ ■ ■*
-
-
X
RGGI
Full
Protocol
Base-year
Regulatory,
Base-year/ FIA
mean
■ ■ ■*
X
-
X
Reversal-Uncertainty-Leakage
■*
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.
CUMULATIVE CREDITABLE CARBON
7.0
20,000
6.0
15,000
10,000
5,000
0
0
25
50
75
Year
CCAR protocol
Gross Carbon/yr
Carbon in allowable pools
Baseline
Uncertainty
(leakage, buffer)
100
avearage annual creditable carbon
(metric tons ha-1 yr-1)
metric tons carbon
25,000
Required Pools
All Pools
5.0
4.0
3.0
2.0
1.0
0.0
CCX
GFC
1605b
HFF
CCAR
VCS
RGGI
COP 14 _ CATCH 22
SBSTA:
Subsidiary Body
for Science and
Tech Advice
Can’t recommend methodologies
for measuring, monitoring,
baselines …until they know the
policy scope
AWG-LCA:
The
Negotiators
Can’t develop policy scope
until they better understand
the methodologies