Economic Context for Agricultural Greenhouse Gas Mitigation Options

Transcription

1 Economic Context for Agricultural Greenhouse Gas Mitigation Options Ron Sands Joint Global Change Research Institute 3 rd International Methane and Nitrous Oxide Mitigation Conference November 23 Beijing, China

2 Motivation Analysis of greenhouse gas mitigation options on a national scale No single model can simulate all activities and processes Typical analysis uses top-down economic model to simulate response of energy system to a carbon price Baselines and marginal abatement cost curves for non- CO 2 greenhouse gases can also be included Process models of agriculture and forestry can inform economic models of other mitigation options Develop strategy to determine relative contribution of mitigation options under hypothetical carbon policies 2

3 Sources Energy System CO 2 emissions from energy combustion; carbon capture and storage from electricity generation Battelle Second Generation Model Non-CO 2 Greenhouse Gases Methane, Nitrous Oxide, F-gases Energy Modeling Forum (EMF-21) baselines and marginal abatement cost curves Agricultural Offsets Soil sequestration, Afforestation, Biofuel Offsets Agricultural Sector Model (McCarl, B.A. and Schneider, U.A. 21. Greenhouse Gas Mitigation in U.S. Agriculture and Forestry. Science 294, ) 3

4 Policy Relevance Extend Basis for Emissions Accounting Earlier Energy Modeling Forum (EMF) studies focused on CO 2 emissions from combustion of fossil fuels EMF-21 brings non-co 2 extends baseline to include non-co 2 greenhouse gases EMF-21 study group on land use change and sinks Carbon Price Experiments Constant carbon prices: better understand dynamics of emissions modeling framework Hotelling price paths: common for cumulative emissions targets (when flexibility) 4

5 Mitigation Options greenhouse gas mitigation options basis for emissions accounting energy system (CO 2 ) non-co 2 GHGs land use change (CO 2 ) terrestrial seq. geologic seq. biofuel offsets CO 2 only all greenhouse gases X X X X X X all greenhouse gases + land use 5

6 Carbon Price Experiments Carbon Price in First Year of Policy (21) Hotelling Rate $5 $1 $15 $2 % 1% 2% 3% 4% 6

7 SGM characteristics Second Generation Model Computable general equilibrium model of United States and other world regions Five-year time steps from 199 through 25 Capital stocks are industry specific with a new vintage for each model time step Carbon capture and disposal from electric power Engineering cost model for capture process from David and Herzog, 2, The Cost of Carbon Capture, Proceedings of the Fifth International Conference on Greenhouse Gas Control Technologies Constant cost of carbon disposal ($4 per tc) Following analysis focuses on United States 7

8 Marginal abatement cost curves for carbon emissions from the United States energy system using Second Generation Model carbon price (199 US$ per tc) reduction in US carbon emissions (million tc) 8

9 EMF-21 Baseline and Mitigation for USA: Methane 2 18 million metric tons carbon equivalent baseline $5 per t CE $1 per t CE $15 per t CE $2 per t CE

10 EMF-21 Baseline and Mitigation for USA: Nitrous Oxide 14 million metric tons carbon equivalent baseline $5 per t CE $1 per t CE $15 per t CE $2 per t CE

11 EMF-21 Baseline and Mitigation for USA: F-gases 9 8 million metric tons carbon equivalent baseline $5 per t CE $1 per t CE $15 per t CE $2 per t CE

12 U.S. Carbon Equivalent Emissions (baseline) 2,5 million tons carbon equivalent 2, 1,5 1, 5 F-gases nitrous oxide methane energy system CO

13 U.S. Carbon Equivalent Emissions ($1 per tc) 2,5 million tons carbon equivalent 2, 1,5 1, 5 F-gases nitrous oxide methane energy system CO

14 U.S. Carbon Equivalent Emissions ($2 per tc) 2,5 million tons carbon equivalent 2, 1,5 1, 5 F-gases nitrous oxide methane energy system CO

15 7 6 Components of U.S. Emissions Reductions at $1 per t CE million tons carbon equivalent F F F CCS F-gases nitrous oxide methane energy system CO

16 7 6 Components of U.S. Emissions Reductions at $2 per t CE million tons carbon equivalent F F F CCS F-gases nitrous oxide methane energy system CO

17 Components of CH 4 and N 2 O Emissions Reductions ($1 per tc) 12 million tons carbon equivalent other other N2 ag ag

18 Components of CH 4 and N 2 O Emissions Reductions ($2 per tc) 12 million tons carbon equivalent other other N2 ag ag

19 Model characteristics Agricultural Sector Model Nonlinear programming model of U.S. agricultural sector 22 traditional crops, 3 biofuel crops, 29 animal products, 63 U.S. regions Mitigation options Soil sequestration: carbon stored in agricultural soils related to cropping and tillage practices Afforestation: expanded forest land area relative to 199 base Biofuel offsets: net reduction in carbon emissions by using biomassbased fuels instead of fossil fuels Interactions among options Competition for land Backward-bending supply curve for soil sequestration component 19

20 Reduction in carbon emissions from three activities simulated in the Agricultural Sector Model Soil sequestration Biofuel offsets carbon price (US$ per tc) Afforestation reduction in US carbon emissions (million tc) Source: McCarl and Schneider (21) 2

21 1, 9 8 Components of U.S. Emissions Reductions at $1 per t CE million metric tons carbon equivalent afforestation soil biofuel F-gas afforestation soil biofuel F-gas afforestation soil biofuel F-gas ASM afforestation ASM soil ASM biofuel CCS F-gases nitrous oxide methane energy system CO2 1 CO2 CO2 CO2 CO

22 1, 9 8 Components of U.S. Emissions Reductions at $2 per t CE afforestation soil million metric tons carbon equivalent afforestation soil biofuel F-gas afforestation soil biofuel F-gas biofuel F-gas CO2 ASM afforestation ASM soil ASM biofuel CCS F-gases nitrous oxide methane energy system CO2 CO2 1 CO2 CO

23 Modeling Challenges Drivers for non-co 2 greenhouse gas baselines beyond 22 Understanding what is in the baseline and what is not Dynamic considerations Capital stock dynamics: How soon will you see emissions reductions? Saturation Permanence Transactions costs Interactions between mitigation options 23