Carbon baseline for California agriculture and the economic approach to estimating the cost of carbon offsets

Transcription

1 Davis, California September 22-23, 2003 Carbon baseline for California agriculture and the economic approach to estimating the cost of carbon offsets Sandra Brown, Ye Qi, and Jonathan Winsten

2 Research Team Sandra Brown WI Aaron Dushku WI John Kadyszewski WI Timothy Pearson WI Ye Qi formerly of WI Jonathon Winsten WI 2

3 Measurement, Classification, and Quantification of Carbon Market Opportunities in the United States California Goals of this module: To quantify the baseline of changes in carbon stocks in the agricultural sector of California for the decade 1987 to 1997 (non-co 2 greenhouse gases were not included) To identify and quantify opportunities for enhancing sinks and reducing sources of carbon in the agriculture sector Similar work is being done in the forestry and rangelands sector but not presented here 3

4 General approach: Two types of data were used: the total area of agricultural land by each major landuse types data from the National Resource Inventory (NRI) database for the period the carbon stocks in vegetation of each land use derived from the literature and experience changes in soil carbon were not included as it was assumed they have been under cultivation long enough that changes are minimal to non-existent under current practices The analysis is conducted for the entire State of California and by county. 4

5 High and Low Carbon Density Crops Divided crops into two main classes based on carbon densities Broad land use Low carbon density crops Specific land use Row and small grain crops Hay/Grass/Legume Summer Fallow Other, Set Aside etc. High carbon density crops Horticulture/Fruit Horticulture/Nut Horticulture/Vineyard Horticulture/Bush fruit Horticulture/Berry Horticulture/other 5

6 Area of agricultural land in California 1000 ha Agricultural High carbon Low carbon Year land density land density land ,115 1,040 3, ,063 1,008 3, ,883 1,013 2,870 Overall loss of 232,000 ha or 5.3% of 1987 area 88% of total loss 6

7 Percent of county area in high and low density carbon cropland in 1997 High C cropland proportion (%) Low C cropland proportion (%)

8 Change in area by land use Hort/Fruit Hort/Nut Hort/Vineyard Hort/Berry/other Row/Corn Row/Cotton Row/otherVeg/truck Row/others Small Grains Hay Area of land use (1000 ha)

9 Change in area of high carbon density croplands

10 Change in area of low carbon density croplands

11 Carbon density estimates of agricultural land used in the analysis Fruit / Nut Orchards 25 to 30 t C/ha Vineyards 10 to 12 t C/ha Berries / Other Horticulture 10 t C/ha Cultivated Crops and Hay 5 t C/ha 11

12 Carbon stocks by land use Horticulture/Fruit Horticulture/Nut Horticulture/Vineyard Horticulture/Berry/other Row/Corn Row/Cotton Row/otherVeg/truck Row/others Small Grains Hay Total on agricultural land Millions of tons of Carbon 12

13 Change in carbon stocks through time Carbon stock (x 1000 t C) % -0.72% +1.33% -6.10% High Carbon Low Carbon Year 13

14 Change in carbon stocks in high carbon density croplands

15 Change in carbon stocks in low carbon density croplands

16 Conclusions for carbon baseline for agriculture Total area of agricultural land in the 1990s was about 4 million ha About 2/3 of agricultural lands are lowcarbon-density crops (such as row crops and small grains), and 1/3 are high-carbondensity crops (such as vineyards and orchards). Area of agricultural land decreased by 232,000 ha (or 5.6%) from 1987 to 1997, almost exclusively from the loss in area of low carbon density crops (88% of loss). 16

17 Conclusions for carbon baseline for agriculture (cont:) Total carbon stock in agricultural vegetation was about 36 million tons (21 million in high and 15 million in low carbon density crops) During the period 1987 to 1997, the carbon stock on agricultural land decreased by 1.6 million tons (or 5.9 million t CO 2 equivalents) 66% of the loss was from low carbon density croplands (1.03 million t C) 34% of the loss was from high carbon density croplands (0.54 million t C) 17

18 Opportunities for ameliorating carbon loss from CA agriculture No-till and conservation tillage practices on cropland Aforestation and productivity improvements on rangeland 18

19 Estimating the Supply of Carbon Offsets Goal: To estimate the supply of carbon offset credits at various carbon credit prices. Methods: Use available data and economic theory to identify and quantify likely projects on individual land parcels. Prepare information in a GIS platform Identify areas for low cost offsets sum estimated carbon offset supply at various prices 19

20 Estimating the Supply of Carbon Offsets Categories of Costs: Opportunity costs of producing carbon Conversion costs Measuring and monitoring costs Land management costs Contract costs 20

21 Estimating the Supply of Carbon Offsets Total estimated costs per hectare Calculate value of future cost stream (based on length of carbon project) Discount future cost stream to current dollars Allow for cost adjustment based on a risk aversion factor Farmers may prefer a guaranteed income stream to uncertain agricultural returns 21

22 Conservation Tillage (CT) on California Cropland Currently <1% of CA cropland is farmed using CT (Mitchell et al. 2002) Potential of 1.73 million ha of cropland Increase soil C by 0.2 ton/ha/year 50% adoption rate 1.73 million tons C over 10 years Experiments show 5 MT C/ha over 12 years of CT 36% increase in soil C (Horwath and Doane, 2002) 22

23 Conservation Tillage on California Cropland Possibly very low cost carbon CT is not costly to farmer (Rominger, 2002) Reduces number of field operations (Klonsky and DeMoura, 2002) Reduces GHG emissions from machinery use Additional ecosystem benefits from CT Reduces nutrient and sediment runoff (Reickosky, 1998) Reduces dust and air quality problems (Baker et al., 2002) May reduce the cost of carbon offsets by having income streams from co-benefits 23

24 Rangeland management in California 52% (5.8 million hectares) of CA agricultural land is pasture and range Well managed perennial rangeland can increase C sequestration (Follet et al., 2001) Several management strategies are likely to increase soil C Re-seeding to deep-rooted perennial grasses Developing water supplies for livestock Intensive grazing management 24

25 Rangeland management in California Initial investments required to improve rangeland and management Improvements will benefit CA livestock industry (Beardsley, 2001) Ranchers interested in additional revenue sources to enhance profit margin (Coehlo, 2002) Vast potential for low cost C credits 25