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Carbon Sequestration in U.S. Agriculture: The Policy Context
Linda M. YoungMontana State University
Are there incentives? Agricultural soils: a
potential sink for carbon Changing management
practices (no-till) Incentives for
agricultural sequestration of carbon Through the market? Through government
programs?
International Policies Concern over carbon
dioxide levels Atmosphere: public good GHG emissions cause a
global externality Countries/businesses lack
incentives to act alone 1988 Inter governmental
Panel established
United Nations FCCC 175 countries signed Nations committed to:
GHG mitigation and adaptation programs
inventory GHG emissions Annex 1 parties:
emissions to 1990 levels by 2000 (non-binding)
Kyoto Protocol
Negotiations concluded 1997 Close to ratification
101 countries, 43.9% emissions• -Russia?• U.S. and Australia UNFCCC
Key: Annex 1 parties reduce emissions to 95% of 1990 levels
Policies to reduce emissions
Kyoto Protocol
Verification of carbon sequestered difficult
Guidelines: agreed 2001 Marrakesh accords
Revegetation, management of crop and grazing lands
Credit for carbon sequestered over 1990 levels
Forestry and Agriculture Problematic
Flexibility Provisions Joint implementation Clean development mechanism
Not agricultural sequestration Credit trading
Only between ratified parties U.S., Australia cannot participate Market fractured: ratified and not Demand weak for non-ratified credits
U.S. Response to Climate Change, Kyoto
Bush: disagrees with science and responsibilities
Bush Climate Action Plan: Reduce GHG intensity 18%, 10
years From 183 MTCE ($ million) to
151 MTCE by 2012• Voluntary actions• Incentive based measures
Criticism of U.S. Plan Total emissions
increase In 2012 emissions
130% 1990 levels If KP ratified, 93% of
1990 Pew Center:
• intensity decrease on trend
• Changing technology
93%
100%
130%Bush Plan
1990 Level
Kyoto Protocol
Administration’s Plan Some firms may act voluntarily Others: incentives not strong
enough Example:failure of UNFCCC goal Bush plan:
Climate change not a serious problem Not requiring international cooperation
Current U.S. Policy Departure from past approaches Acid rain program:
Emissions limits and trading Successful, least cost program
Senators McCain and Leiberman Bill in Congress
U.S. State Policies Many state actions Their role? State programs as prototypes National involvement/international
agreement Businesses facing patchwork of
registries and incentives
The Market for Carbon Credits
Example: energy company emit GHG Purchase offset from
renewable energy company
Why trade? Binding limits Not emissions caps:
• expectations• Environmental ‘good
citizen’• “Learn by doing”
Market for Carbon Sequestration Carbon market determine demand for
agricultural sequestration Limited information, pilot purchases EPA registry (not trades): of 369
sequestration projects, 2 involved agriculture
Transactions costs high Poorly defined terms, detailed contracts Industry wants regulatory body
U.S. Government Agricultural Programs
Bush administration-receptive Directed Secretary of Agriculture 2002 Farm bill- increased funding
Congressional support high 25 bills introduced carbon sequestration
Programs are voluntary Ag. Seq. produces environmental benefits Programs likely compatible with URAA
Cont. pressure to support farm income
How much can agriculture sequester? (in mmtce)
1982-97 17 Management changes
(4.5) CRP 13.2 mm hectraces
Possible 47 No till all cropped farmland
Possible 20 Summer fallow eliminated
Total potential 83 All practices
Source: Sperow, Eve, Paustian
Conclusions Market development hindered by
non-ratification Demand for U.S. carbon credits
weak with implementation of KP Little impetus overcome verification,
monitoring challenges Government ag programs likely
source of demand