carbon sequestration in u.s. agriculture: the policy context linda m. young montana state university
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Carbon Sequestration in U.S. Agriculture: The Policy Context
Linda M. YoungMontana State University
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Are there incentives? Agricultural soils: a
potential sink for carbon Changing management
practices (no-till) Incentives for
agricultural sequestration of carbon Through the market? Through government
programs?
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International Policies Concern over carbon
dioxide levels Atmosphere: public good GHG emissions cause a
global externality Countries/businesses lack
incentives to act alone 1988 Inter governmental
Panel established
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United Nations FCCC 175 countries signed Nations committed to:
GHG mitigation and adaptation programs
inventory GHG emissions Annex 1 parties:
emissions to 1990 levels by 2000 (non-binding)
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Kyoto Protocol
Negotiations concluded 1997 Close to ratification
101 countries, 43.9% emissions• -Russia?• U.S. and Australia UNFCCC
Key: Annex 1 parties reduce emissions to 95% of 1990 levels
Policies to reduce emissions
Kyoto Protocol
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Verification of carbon sequestered difficult
Guidelines: agreed 2001 Marrakesh accords
Revegetation, management of crop and grazing lands
Credit for carbon sequestered over 1990 levels
Forestry and Agriculture Problematic
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Flexibility Provisions Joint implementation Clean development mechanism
Not agricultural sequestration Credit trading
Only between ratified parties U.S., Australia cannot participate Market fractured: ratified and not Demand weak for non-ratified credits
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U.S. Response to Climate Change, Kyoto
Bush: disagrees with science and responsibilities
Bush Climate Action Plan: Reduce GHG intensity 18%, 10
years From 183 MTCE ($ million) to
151 MTCE by 2012• Voluntary actions• Incentive based measures
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Criticism of U.S. Plan Total emissions
increase In 2012 emissions
130% 1990 levels If KP ratified, 93% of
1990 Pew Center:
• intensity decrease on trend
• Changing technology
93%
100%
130%Bush Plan
1990 Level
Kyoto Protocol
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Administration’s Plan Some firms may act voluntarily Others: incentives not strong
enough Example:failure of UNFCCC goal Bush plan:
Climate change not a serious problem Not requiring international cooperation
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Current U.S. Policy Departure from past approaches Acid rain program:
Emissions limits and trading Successful, least cost program
Senators McCain and Leiberman Bill in Congress
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U.S. State Policies Many state actions Their role? State programs as prototypes National involvement/international
agreement Businesses facing patchwork of
registries and incentives
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The Market for Carbon Credits
Example: energy company emit GHG Purchase offset from
renewable energy company
Why trade? Binding limits Not emissions caps:
• expectations• Environmental ‘good
citizen’• “Learn by doing”
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Market for Carbon Sequestration Carbon market determine demand for
agricultural sequestration Limited information, pilot purchases EPA registry (not trades): of 369
sequestration projects, 2 involved agriculture
Transactions costs high Poorly defined terms, detailed contracts Industry wants regulatory body
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U.S. Government Agricultural Programs
Bush administration-receptive Directed Secretary of Agriculture 2002 Farm bill- increased funding
Congressional support high 25 bills introduced carbon sequestration
Programs are voluntary Ag. Seq. produces environmental benefits Programs likely compatible with URAA
Cont. pressure to support farm income
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How much can agriculture sequester? (in mmtce)
1982-97 17 Management changes
(4.5) CRP 13.2 mm hectraces
Possible 47 No till all cropped farmland
Possible 20 Summer fallow eliminated
Total potential 83 All practices
Source: Sperow, Eve, Paustian
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Conclusions Market development hindered by
non-ratification Demand for U.S. carbon credits
weak with implementation of KP Little impetus overcome verification,
monitoring challenges Government ag programs likely
source of demand