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Simplified Time Accounting for ILUC in Biofuel Production

This study looks at accounting for time in indirect land-use change (ILUC) calculations for biofuel production. It explores amortizing capital investment emissions to generate per-MJ greenhouse gas intensity. Challenges and implications of the K-M model are discussed, along with refinements for handling delayed afforestation. This research aims to provide a more accurate understanding of ILUC impact on biofuel production.

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Simplified Time Accounting for ILUC in Biofuel Production

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  1. Simplified time accounting for ILUC Michael O’Hare University of California, Berkeley July 2010 EWG VII-10 O'Hare

  2. Variables • Gv = “direct” – variable emissions from one MJ production • Gc = ILUC – capital investment emissions for one MJ production capacity EWG VII-10 O'Hare

  3. Challenge • Amortizing Gc into a variable cost • requires knowing production period • Ignores atmospheric persistence & cumulative warming • Should include a discount rate • combine Gv and Gc with minimal assumptions to generate a per-MJ GHG intensity EWG VII-10 O'Hare

  4. Kløverpris & Mueller: ILUC accelerates conversion EWG VII-10 O'Hare

  5. Implication of K-M model A single year of biofuel production, if cropland is overall increasing for other reasons, displaces ILUC that would occur anyway to one year earlier. EWG VII-10 O'Hare

  6. Note that: • All discharges in this model occur within a year of each other, so residence time, analytic horizon, etc. don’t matter • There is no avoiding a discount rate, for any action with a time delay component EWG VII-10 O'Hare

  7. If ILUC is land clearing that will occur anyway next year, (annual land clearing > biofuel ILUC) Example: US corn ethanol, Hertel et al Gc Gtotal = 60 + (800 x .05/1.05) = 98 EWG VII-10 O'Hare

  8. Refinements • Production discharges might be discounted half a year (as though occurring in the middle of the year) • Delayed afforestation needs to be handled with a complete time model EWG VII-10 O'Hare

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