US Climate Policy: Is Agriculture a Player or By-Stander

Transcription

1 US Climate Policy: Is Agriculture a Player or By-Stander Sara Hessenflow Harper

2 Potential Role for Agriculture in Climate Policy Emission Limit Efficiency Gains Investment & Transition To New Feedstock Or Process Purchase Ag-Offset Reduction

3 Agriculture Offset Market Regulated Entity credit $ Low Carbon Fuel Production $ credit credit credit Soil Carbon Sequestration Projects Agriculture Offset Aggregator/Verifier $ $ credit Methane from Manure Capture $ credit credit $ Direct Emission Reductions credit Reforestation

4 Where is Agriculture? States Taking Action on Climate

5 California Passes Historic State Law to Combat Climate Change For Immediate Release: Contact: Margita Thompson Wednesday, August 30, 2006 Darrel Ng Statement by Gov. Schwarzenegger on Historic Agreement with Legislature to Combat Global Warming The success of our system will be an example for other states and nations to Gov. Schwarzenegger released the following statement regarding a deal struck between the Administration and the legislature on AB 32: follow "Today, I am happy as to announce the we have fight reached a historic against agreement ent on legislation climate to combat global change warming. "We can now move forward with developing a market-based system that makes California a world leader in the effort to continues. reduce carbon emissions. The success of our system will be an example for other states and nations to follow as the fight against climate change continues. AB 32 strengthens our economy, cleans our environment and once again, establishes California as the leader in environmental protection. "Throughout the negotiations, my primary concern was that the Legislature passed a bill that provided the flexibility to address unforeseen circumstances. AB 32 will ensure that the state can make m adjustments throughout its implementation. "When I ran for office, I promised to not only help protect the environment, but also help turn back the clock to make sure that the environment we leave -- for Gov. our children is better Arnold than the one we have today. The state is the 12th largest carbon emitter in the world despite leading the nation in energy efficiency ency standards and its lead role in protecting its environment. Reducing greenhouse gas emissions is an issue we must show leadership on. Schwarzenegger "It s amazing the work that can be done for the people of California when Democrats and Republicans work together. I want to thank Assembly Speaker Fabian Nunez, Senator Don Perata and Assemblymember Fran Pavley for the hard work they have put in to make this agreement something we can all be proud of." ###

6 California s state law provides no exemptions against regulation for agriculture Methane from California s dairy and rice industries could come under regulation

7 The initial phase of the cap-and and-trade program will entail the allocation and trading of carbon dioxide allowances to and by sources in the power sector only. In a subsequent phase of the program, states and stakeholders will work together to develop reliable protocols for offsets (i.e., creditable reductions outside the power sector) that may be used to achieve compliance with the cap.

8 Where is Agriculture? Companies Taking Action on Climate

9 January 22, 2007 US-CAP LEADING COMPANIES AND ENVIRONMENTAL GROUPS CALL FOR BOLD ACTION ON GLOBAL WARMING. Alcoa BP America Caterpillar Duke Energy DuPont Florida Power & Light General Electric Lehman Brothers PG&E Corporation PNM Environmental Defense Natural Resources Defense Council Pew Center on Global Climate Change World Resources Institute

10 Wal-Mart takes steps to go green February 24, 2006 In the next four years, the global company has proposed to reduce its greenhouse gas emissions by 30 percent..

11 Where is Agriculture? Federal Policy

12 Source: World Resources Institute

13 Carper-Alexander (utility only version from last Congress) Sec 705 (f) Unlimited CO2 Offset allowances, US or International Consider programs by states. (RGGI)

14 Sen. Feinstein (utility only) 731 Outreach on revenue Enhancement to Ag Producers 732 Offset Measurements for Ag, Forestry, Wetland 734 Offset Credits for Forest, Grazing, Wetland 735 Offset from Avoided Conversion of Forest and Wetland 736 Offset for GHG Emission Reduction Projects - includes eligibility for uncapped sectors (even beyond agriculture) 737 Borrowing against Future Offsets 738 Reviewing of Accounting for Offset Credits

15 Sec. 144 Lieberman-McCain (economy-wide) Alternative Measures of Compliance offsets limited to 30% of total allowances required to cover emissions in any given reporting period. If more then 15% of allowances are covered by an alternative measure of compliance, then 1.5% of total must be agricultural soil sequestration, and a report every five years after must be submitted to ensure maintenance of sequestered carbon. Traditional allowances must be relinquished to account for losses

16 Sec. 716 Sanders-Boxer (economy-wide) Sets out standards for biological sequestration to be enacted 2 years after adoption of the legislation

17 Sec Sen. Bingaman (economy wide) Offsets to be awarded 5% of total allocations for: sequestration (except enhanced oil recovery) landfill methane, animal waste or waterwaste methane SF6 reduction projects destruction of hydrofluorocarbons

18 What s at Stake?

19 A New Conservation Market

20 Potential Annual Carbon Sequestration in US Agriculture Percent of Projected US GHG Emission Growth Low High 0 Crop Land Uses Production Practices Grazing Lands Total [Source: ERS, 2004]

21 Waste-to to-wealth

22 Making the Meter Run Backwards!

23 Value Added Biofuels Increased Efficiency = Lower GHG Emissions

24 Outsourcing Ag-Carbon Market

25 Financial Times June 20, 2006 The partners have drawn up plans to build largerscale... plants the new in the outlet UK at a for cost the of more surplus than BP 100 and each DuPont... The signaled plants will a breakthrough rely on surplus in C- sugar biofuels grade sugar,. would.. The which new be up product, until a boon recently biobutanol, for was UK exported by produces British agriculture. producers. more energy than ethanol and can be used in vehicles more easily without modification to engines...

26 /ton CO2 European CO2e Prices Close 12/06

27 Missed Investment Opportunities

28 Illustrative Ranking of Carbon as a Crop in U.S. Per Proposed GHG Limits in Senate Bill 280 (Lieberman-McCain) 1/12/07 Production Value ($B) dates Carbon at $10/MT CO 2 e, nectarines cukes oats beans almonds lettuce fresh tomato [Crop Source: USDA - National Agricultural Statistics Service US Crop Rankings Production Year Ranking Based on Value of Production] rice oranges potatoes grapes cotton wheat CARBON hay soybeans grain corn

29 Issue number 34 November 2006 Morgan Stanley in $3 billion carbon push Posted Nov US investment bank Morgan Stanley is to spend $3 billion buying carbon credits and investing in emissions reduction projects over the next five years, it announced in late October.

30 Missed Opportunity to Solve Multiple Problems

31 OIL IMPORTS US DEBT TRADE ROUND

32 If you are not at the You ARE on the Menu! Table

33 Illustrative Ranking of Carbon as a Crop in U.S. Per Proposed GHG Limits in Senate Bill 280 (Lieberman-McCain) 1/12/07 Production Value ($B) dates nectarines cukes oats beans almonds lettuce Carbon at $10/MT CO 2 e, fresh tomato [Crop Source: USDA - National Agricultural Statistics Service US Crop Rankings Production Year Ranking Based on Value of Production] rice oranges potatoes grapes cotton wheat CARBON hay soybeans grain corn