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Recent Efforts in US Climate Policy: Implications for Forestry and Agriculture. Lydia Olander Senior Associate Director Nicholas Institute, Duke University 5 th Forest and Agriculture Greenhouse Gas Modeling Forum April 2009. State and Regional Initiatives. US Cap-and-Trade Policy.

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recent efforts in us climate policy implications for forestry and agriculture

Recent Efforts in US Climate Policy: Implications for Forestry and Agriculture

Lydia Olander

Senior Associate Director

Nicholas Institute, Duke University

5th Forest and Agriculture Greenhouse Gas Modeling Forum April 2009

conference of the parties
International

Policy

Annex 1 targets

Developing country participation

REDD

CDM

US Critical

Conference of the Parties
u s cap and trade
U.S. Cap-and-Trade
  • Inside the cap
    • Emissions: power plants, factories, oil refineries (gasoline)
  • Outside the cap
      • Domestic
        • Land management emissions and sinks: forestry, agriculture, landfills
        • Emissions: fugitive emissions, industrial N2O
      • International
        • Industry and energy in developing countries
        • Deforestation in developing countries

Offsets

policy options outside the cap
Policy Options: Outside the Cap

Under a mandatory policy the term offsetdescribes a reduction in emissions or increase in sequestration of GHGs produced by an entity outside of a compliance cap that is used by a capped entity to offset its emissions.

policy objectives for offsets
Policy Objectives for Offsets
  • Achieve more mitigation without increasing costs
alternative offset scenarios epa analysis of the climate security act of 2008 s 2191 march 2008
Alternative offset scenariosEPA Analysis of the Climate Security Act of 2008: S. 2191 (March 2008)

No offsets

15/15

Unlimited

offsets

activity types and methodologies
Activity Types (and Methodologies)
  • Forests
    • Afforestation/reforestation
    • Forest management
    • Avoided deforestation
  • Landfills
  • Livestock
  • Urban Forests
  • Co-digestion (anaerobic digestion of manure and waste)
  • Natural gas transport fugitive emissions
  • Coal mine methane
policy objectives for offsets1
Policy Objectives for Offsets
  • Achieve more mitigation without increasing costs
  • Bring in important constituencies
  • Provide a bridge to low carbon technologies (provide rapid results)
    • Land use critical for this
concerns about offsets
Concerns about offsets
  • Will work too well
    • Diverts effort away from capped sector, reduces investment in technology
    • Question of the cap not a problem with offsets.
  • Won’t work
    • Projects too complicated or too costly, or too discounted to bring in sufficient participation
  • Not real reductions
environmental integrity concerns are reductions real
Environmental Integrity Concerns: Are Reductions “Real”?

Project-based offset system

  • Voluntary transaction between two parties
  • Factors that can undermine net real reductions
    • Leakage: diverted emissions beyond project boundaries
    • (Non)Additionality: parties being paid for actions they would have taken anyway
    • Permanence: release of stored carbon (intentionally or accidentally) before or after project ends
solutions to the real reductions problems
Solutions to the “real reductions” problems
  • Quantitative limits
  • Qualitative limits
  • Accounting Adjustments
    • Discounting credits for compliance use
    • Buffers (set aside allowances to cover losses)
  • Accept: Systemwide adjustment of aggregate cap
waxman draft bill offsets
Waxman Draft Bill _ Offsets

Allows maximum 2 billion tons, split evenly between domestic and international offsets

Credits 4 tons for every 5 submitted

Domestic program

Integrity Advisory Board & Administrator

Additionality: legal, 2009, common practice

Performance Std Baselines

Impermanence coverage (buffers or insurance)

Adjustments for uncertainty (discounts)

Adjustments for leakage (discounts)

Early credits _ State programs (CCAR/RGGI)

International programs

Bilateral/multilateral

Sectoral offsets

UNFCCC (CDM) offsets

Reduced Deforestation offsets

Reduced Deforestation supplemental

activity questions
Activity questions
  • What types of activities should be eligible for the offsets program?
    • How much potential mitigation will it provide?
    • What is enough measurement certainty?
      • If we are sure about directional change but not quantity can we encourage activity based on the expected average benefit and a conservative discount?
    • Can we develop a reasonable performance standard against which to compare project performance?
      • Are sufficient data available at national and regional levels to develop a performance standard baseline?
    • Do we have enough information to be reasonably confident that leakage and impermanence risks can be estimated?
methodology questions
Methodology questions
  • What kind of performance baseline can we develop for an activity given the data we have?
    • How specific can we be to the context of that activity (region, legal setting)?
  • Do we know enough about drivers of leakage and elasticities to reasonably predict leakage for the activity nationally or regionally?
    • Can we develop look up tables to be used by methodologies?
  • Do we know enough about risks of impermanence to estimate buffer set-asides(frequency of fires, storms, pest outbreaks?)
policy questions
Policy Questions
  • How much mitigation can domestic offsets supply?
  • How will an offsets program interaction with other policies?
    • Biofuels production and renewable fuels standards
    • Adaptation programs
    • CRP/WRP
    • Clean Water Act (TMDL)
  • Can we assess the effectiveness of an offsets program at a national level?
    • How large does the program need to be before we can distinguish its signal from the noise of other land use drivers?
    • Will we be able to distinguish leakage?
slide22
Meaningful participation by developing countries

Meyer-Mediera, et al. 2009. Data from 2000

areas of agreement
Areas of agreement
  • Voluntary participation of forest countries for foreseeable future
  • Payments by developed countries for reductions in developing country forest emissions
  • National level accounting
  • Can be measured against a national reference or baseline to determine performance
  • Allows reconciliation of subnational/project activities with national assessments
  • Helps address leakage and additionality
what scope
What Scope?

Maintenance Management

questions
Questions
  • Could the US do national accounting as an assessment of the land use portion of an offsets program?
  • Will we have the remote sensing capabilities to detect other land use changes? Which ones?
  • Do we have sufficient knowledge on carbon density and interactions with other GHGs to expand beyond deforestation? How far?
    • Deforestation->Degradation/Forest Management->Agricultural practices->pasture/grasslands->wetlands?
2007 farm bill sec 2709 environmental services markets
2007 Farm Bill SEC. 2709. ENVIRONMENTAL SERVICES MARKETS.

USDA authorized to facilitate private sector markets for ecosystem services

(b) Establishment- The Secretary shall establish guidelines under subsection (a) for use in developing the following:

`(1) A procedure to measure environmental services benefits.

`(2) A protocol to report environmental services benefits.

`(3) A registry to collect, record and maintain the benefits measured.

A new Office of Ecosystem Services and Markets

what baseline
What baseline?

~~~~~~~~~~~~~~~~

Based on historic emissions from deforestation

Or

Estimating future risk of deforestation (based on stock)

Figure from: Murray, Olander, and Lawlor. 2008. A Core Participation Requirement for Creation of a REDD market. Nicholas Institute Policy Brief

baseline approaches
Griscom et al. 2008 Implications of REDD baseline methods for different country circumstances during an initial performance periodBaseline approaches
forest management protocols examined
Forest Management Protocols Examined

Overview of key components of seven protocols. Carbon pools include:

■ – Live Tree; ■ – Belowground; ■ – Dead Tree; ■ – Litter; ■ – Soil; ■ – Wood Products.

Optional pools are denoted with an asterisk.

cumulative creditable carbon
Cumulative creditable carbon

CCAR protocol

Gross Carbon/yr

Carbon in allowable pools

Baseline

Uncertainty

(leakage, buffer)

slide32

COP 14 _ Catch 22

SBSTA: Subsidiary Body for Science and Tech Advice

AWG-LCA:

The Negotiators

Can’t recommend methodologies

for measuring, monitoring,

baselines …until they know the

policy scope

Can’t develop policy scope

until they better understand

the methodologies

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