THE INTERSECTION OF SCIENCE, POLICY, AND MARKETS

Lydia Olander and Alison Eagle, Nicholas Institute, Duke UniversityM-AGG Workshop, Carbon Markets and AgricultureJune 17, 2010 – Washington, DC

“Agricultural land management practices in the United States have the technical potential to contribute about 230 Mt  CO2e/yr of GHG mitigation by 2030 “

-Smith et al., 2008

WHAT IF.....? …voluntary GHG market …cap & trade legislation …incentive program to mitigate GHGs …corporate-driven supply chain

requirements …low carbon biofuels

All require technical and background scientific information to ensure environmental progress is achieved and farmers are fairly compensated

Information needs are context-specific

T-AGG PURPOSE

Lay the scientific and analytical foundation necessary for building a suite of methodologies for high-quality greenhouse gas (GHG) mitigation for the agricultural sector

Identify agricultural practices that reduce GHGs

Assess biophysical potential, economic, technical and social feasibility

Evaluate approaches for implementing mitigation policy or program (measurement, verification, additionality, baseline, etc.)

COLLABORATIVE AND TRANSPARENT Advisory board and Science advisors

researchers, government agencies, agriculture & agri-business, NGOs

Many years of experience in carbon & other GHGs Broader network

Email list and website Information gathering meeting, Nov ’09, Expert

meeting Apr ‘10 Frequent interaction with protocol developers,

policy makers and others working in this space Open review process and outreach meetings C-AGG/M-AGG (policy; market mechanisms)

T-AGG PROCESS

Review of agricultural GHG mitigation opportunities in the U.S.

Side-by-side assessment of biophysical and economic potential; barriers and co-effects

Produce technical reports with executive summaries for stakeholders and decision makers (Synthesis, Carbon, N2O)

Outreach and engagement Similar process for international

opportunities

Gather expert and user input

Cropland Management. Grazing Land Management Land Use Change

Conservation till and no-till Improved grazing land management

Cropland grazing land

Fallow management Change species composition Cropland natural landscape

Increase cropping intensity Improve fertilizer NUE Avoid draining wetlands

Shift between annual crops Enteric fermentation management

Restore degraded lands

Application of organic soil amendments (incl. biochar)

Fire management Convert pasture to natural (cease grazing)

Include more perennial crops Fertilization

Irrigation management Agroforestry

Improve fertilizer NUE and reduce N rate

Irrigation management

Rice water management and cultivars

Irrigation improvements

Reduce chemical inputs

Improved organic soil management

Agroforestry

Herbaceous buffers

Improved manure application

Drain agricultural land in humid areas

MITIGATION ACTIVITIES CONSIDERED

METHODS: LITERATURE

Over 800 papers (mostly peer reviewed) Soil carbon, N20 and CH4

Upstream and process emissions Compared and enhanced with model results

(Century and DayCENT) Showing range of values Scaled up to national using weighted

averages Separate review of co-effects, barriers…

BIOPHYSICAL GHG MITIGATION POTENTIAL

Soil C N2O& CH4

Emissions

Upstream & Process

Total National

---- t CO2e/ha/yr ------ Mt CO2e/yr

No-till, modeled-1.00 (-5.61–

0.43)

-0.04 -0.59 -1.63 -129.4

No-till, literature-1.15 (-2.60–0.26)

0.15(-0.84–1.81)

-0.14 (-0.18–0.07)

-1.13 -115.0

Note: negative means storage or emission reduction

BIOPHYSICAL GHG MITIGATION POTENTIAL

Soil C N2O& CH4

Emissions

Upstream & Process

Total National

---- t CO2e/ha/yr ------ Mt CO2e/yr

No-till, modeled-1.00 (-5.61–

0.43)

-0.04 -0.59 -1.63 -129.4

No-till, literature-1.15 (-2.60–0.26)

0.15(-0.84–1.81)

-0.14 (-0.18–0.07)

-1.13 -115.0

Reduce N fertilizer 0.00-0.46

(-1.42 – -0.14)

-0.22(-0.30 – -

0.15)-0.68 -86.4

Winter cover crops-1.44

(-3.06–-0.37)

-0.25(-1.05–0.00)

-1.82(-3.10–-0.55)

-3.51 -166.6

Eliminate summer fallow

-0.82(-2.35–

0.88)

0.05(-0.07–0.30)

0.13(0.07–0.24)

-0.64 -12.6

Diversify annual crop rotations

-0.59(-3.01–

1.10)

-0.04(-0.33–0.11)

0.00 -0.63 -98.1

Improved rangeland management

-1.01(-4.99–

0.10)

-0.28(-0.31–0.227)

0.00 -1.29 -172.4

Note: negative means storage or emission reduction

METHODS: DATA AVAILABILITY AND GAPS

Quantify valid comparisons in research Highlights where research is missing

Mitigation Practice

Number of Comparisons

Regional Representation

No-till 200 All U.S. regions, best data for Southeast, Great Plains, Corn Belt

Winter Cover Crops

160 Only regions with sufficient growing season

Reduce N fertilizer rate

277 Corn Belt, Lake States, Rocky Mountains, Great Plains

Change N source to slow release

14 Lake States, Rocky Mountains – no data found for other regions

OUTPUT BASED METRICS

Usually use area metrics CO2e/acre Output metrics based on productivity and efficiency

CO2e/tons of crop produced (yield) Positives

Encourages increasing efficiency aligning with food security Expand ag practices that would count for mitigation

programs Internalizing the yield impacts on the broader system (good

and bad leakage) Concerns

Yield volatility adds uncertainty and complexity Intensity approach, allows overall emissions to continue to

increase Discomfort paying for it if farmers would do it anyway if it

increases yield or reduces costs

http://www.nicholasinstitute.duke.edu/t-agg

MODELING FOR ECONOMIC RESPONSE Land use competition &

implementation costs – not all practices can achieve full biophysical potential

Responses to carbon prices – efficiency gained when least costly mitigation practice is first target

Full GHG accounting – assumes that all sources and sinks are counted in the market (somehow)

Carbon price $5/tCO2e $15/tCO2e $30/tCO2e $50/tCO2e

Forestry, Afforestation and Bioenergy Mitigation Activities

-210.42 -463.2 -639.76 -846.11

Other Land-Based Agricultural Mitigation Activities

-12.13 -37.74 -70.56 -99.25

Example Agricultural Opportunities

Reduced Fossil Fuel Use -0.39 -2.15 -5.37 -9.34

Changing Tillage Practices -1.97 -8.67 -18.12 -26.68

Reduced N Use -0.20 -0.33 -4.75 -10.48

Manure Management -1.10 -3.15 -5.08 -6.61

NET GHG MITIGATION BY SOURCE (Mt CO2e)

Source: FASOMGHG economic modelNote: negative means storage or emission reduction

Figure 2. Representative map of FASOMGHG regions and sub-regions

REGIONAL VARIATION: FOR C AND N2O

IMPLEMENTATION AND ACCOUNTING

What emissions or sinks are counted? Depends on the policy or market context

Measurement, additionality and baseline Field Sampling alone (difficult) Modeling with site data/field sampling (preferable)

Agricultural Systems/ mix of practices Accounting for multiple practices in combination

Verification and monitoring Practice based with variable level of detail depending on

measurement choice Leakage

Intensity metrics Modeling/look up tables

Reversals Understand GHG impacts, tools to evaluate risks

SAMPLING AND MEASUREMENT

Regulator wants to ensure there is a difference Protect against Type I error (false positive)

Type II error (false negative) is more important to seller (farmer) Can need 2 to 3 times more samples to have confidence (95%)

that a real difference is detected

# of Samples at given CV

% change CV 10%

CV 15%

CV 20%

10 6 15 255 25 50 752.5 75 150 2501 200 400 7000.6 1600 2500 4000

Minimum # of samples needed to detect

difference (95% confidence)

BIOGEOCHEMICAL MODELS

Land use history

Current Practices (crop, rotation, tillage…)

BGC ModelsCentury/Daycent; DNDC; RothC; EPIC/APEX

• Based on empirical research

• Tested and updated regularly

Decision support tools

• Range of input required

• Min: location, crop system, area, practice, (yield)

• Max: land use history, fert

Baseline and Measurement

• Baseline from default info

• Change in GHG for practices that can be modeled

Scale models

to address variabilit

y

NEXT STEPS

Working with wide range of research experts and modelers to develop detailed information

Draft reports – Synthesis this summer and C and N2O this fall

Coordinating meetings for feedback on the reports

Initiating international assessments

Thank you

Website and email listhttp://www.nicholasinstitute.duke.edu/t-agg

RELEVANT REFERENCES

Baker, J.S., B.A. McCarl, B.C. Murray, S.K. Rose, R.J. Alig, D.M. Adams, G. Latta, R. Beach and A. Daigneault (2010). "Net farm income and land use under a U.S. greenhouse gas cap and trade." Policy Issues, PI7 - April 2010: 1-5

Output based paper coming soon – with examples

May consider activity with lower GHG

potential if it provides other

social, economic or

environmental co-benefits

• Net GHG/ha, total ha available, and over what time frame• Costs for management shifts (opportunity costs, capital costs, …)

Physical and Economic Potential – High/Med/Low?

• Is information (measurement and modeling) sufficient by practice, crop, and geography?

• Does directional certainty exist for net GHGs?

Scientific Certainty – High/Med/Low?

•Yield decline (affects production elsewhere and economic impact)•Economic cost – break-even price too high? •Technical barriers – monitoring, adoption, or production barriers•Social barriers or negative community or farmer impacts•Negative ecological impact•Life cycle analysis – significant negative upstream or downstream GHGs

Possible Barriers – Addressable?

• Measurement, monitoring and verification – Are there good methods for measuring or modeling GHG outcomes on a project scale? and for verifying projects?

• Additionality – Can it be assessed sufficiently?• Baseline – Are there viable approaches for setting baseline?

Sufficient data?• Leakage risk – Is there leakage risk (life cycle analysis)? Can it be

accounted for?• Reversal risk – Can risk be estimated? Can it be accounted for? Is

it too high?

Implementation & Accounting Barriers – Addressable?

Significant Co-benefits?