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Time Accounting Sub-Group Update

• Sub-group members: James Duffy, Keith Kline, Jesper Hedal Kløverpris, Jeremy Martin, Steffen Mueller, Michael O’Hare

• Outside Expert: Elizabeth Marshall, USDA ERS

• Agenda

15 min - Review of Fuel Warming Potential – Jeremy

15 min - Baseline Time Accounting – Jesper and Steffen

10 min - Simplified “time-shift” accounting – Michael

5 min – Forest transition approach – Keith

10 min - Social Cost of Carbon applied to biofuels – Liz Marshal

10 min - WRI Time Accounting Workshop Summary - Liz Marshall

30 min - Discussion

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Fuel Warming Potential

• Biophysical approach to time accounting analogous to Global Warming Potential

O’Hare, Plevin, Martin, Jones, Kenall, Hopson

Considered by EPA and CARB during rule development for RFS and LCFS in 2008/2009

Published in Environmental Research Letters in 2009

Reviewed by EPA Peer Review panel in 2009

Discussed in EPA and CARB rulemaking documents

but just in case you forgot…..

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Emissions trajectories over time are complex

• Figure above represents one set of assumptions

• 30 years production, GTAP+WH for ILUC, 60 g/MJ w/o ILUC

• Use BTIME to evaluate your own parameter choices

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Ext

ra C

O2e

(g

per

MJ

ann

ual

pro

du

ctio

n)

Corn ethanol emissions

Gasoline emissions

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BTIME: Choose your own parametersChoose scenario GTAP-WH

Discount rate 2.5% % Applied to cumulative CO 2

Gasoline baseline GWI 94 g CO2e/MJ Standard baseline gasolineEstimated EtOH GWI 60 g CO2e/MJ Approximate NG-fired dry-mill EtOH GWI, w/o indirect effects.Initial soil C loss period 5 y Years it takes to lose "soil C initially lost"Later soil C loss period 20 y Years it takes to lose the rest of lost soil CSoil C initially lost 80% % As a percentage of the lost soil C, not of the total soil C stockRecovery years 30 y The number of years over which land recovery occursPercent recovery 0% % The fraction of originally lost above- and below-ground C recoveredProduction period 30 y The period over which biofuels are assumed to be produced on the land triggering LUC emissions.

CO2 emitted/MJ increase 776 g CO2e/MJ/y NB: Excluding foregone sequestration

Emission breakdownAnnual foregone seq. 4 g CO2e/MJ/y Above Below ForegoneForest fraction 64% % 426 349 4Grassland fraction 36% %Forest above-ground 387 g CO2e/MJ 78%Forest below-ground 112 g CO2e/MJ 22%Pasture above-ground 40 g CO2e/MJ 14%Pasture below-ground 237 g CO2e/MJ 86%Total foregone seq. 123 g CO2e/MJ

Total iLUC emissions 898 g CO2e/MJ

Parameter Units FAPRI-WH GTAP-WH What-ifFuel capacity increment L 5.7E+10 5.0E+10 5.0E+10Initial Areal Fuel Yield L/ha 4375 3292 3292Average Areal Fuel Yield L/ha 4375 3350 3350Net Displacement Factor % 72% 28% 28%CO2 Flux: forest Mg CO2/ha 456 658 700CO2 Flux: grassland Mg CO2/ha 122 61 60CO2 Flux: wetland Mg CO2/ha 0 1200 1200Forest area fraction % 52% 26% 30%Grassland area fraction % 48% 74% 68%Wetland area fraction % 0% 0% 2%

Stream breakdown g CO2e/MJ

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Extra CO2 in the Atmosphere

• CO2 has a long residence time in the atmosphere

• Annual additions are greater than annual decay

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2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Ext

ra C

O2e

(g p

er M

J an

nu

al p

rod

uct

ion

)

Gasoline

Corn ethanol

Corn ethanol emissions

Gasoline emissions

Based on GTAP analysis

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What do we really care about?

• Ultimately, human suffering and ecosystem damage from climate change, especially irreversible damage caused by global warming

• Quantitatively compare the extent of warming caused by scenarios with different temporal emissions profiles

• Analogous to the comparison of different global warming gasses using the Global Warming Potential

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Global Warming Potential

GWP is the ratio of Cumulative Radiative Forcing (CRF)

dttCOa

dttCHa

dttRF

dttRF

CRF

CRFGWP

a

a

a

a

t

CO

t

CH

t

CO

t

CH

CO

CHCH

0 2

0 4

0

0

)(

)(

)(

)(

2

4

2

4

2

4

4

25100

4CHGWP7220

4CHGWP

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Cummulative Radiative Forcing

Based on GTAP analysis

Cum

ula

tive R

ad

iati

ve F

orc

ing a

nd N

PV

(arb

itra

ry u

nit

s)

0.0E+00

2.0E+04

4.0E+04

6.0E+04

8.0E+04

1.0E+05

1.2E+05

2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Cu

mm

ula

ive

Rad

iati

ve F

orc

ing

& N

PV

(A

rbit

ary

Un

its)

CRF Corn Ethanol

CRF Gasoline

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By analogy, Fuel Warming Potential

)(tBtGatRF ij

ijji

at

o

iaii dttRFtCRFCRF )(

FWPp CRFbCRFg

Radiative Forcing

Cumulative Radiative Forcing

Ratio of biofuels policy case (b) to reference gasoline case (g)

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Fuel Warming Potential

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Analytic Horizon (years)

Fu

el W

arm

ing

Po

ten

tial

Ethanol (Flows only)

Ethanol FWIp

Corn Ethanol Direct

Carbon Intensity relative to gasoline

Based on GTAP analysis

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By extension, Economic Fuel Warming Potential

FWPp CRFbCRFg

Physical Fuel Warming Potential

FWPe NPVbNPVg

NPV d RF t 1 r t0

ta dt

D t d RF t

Economic Fuel Warming Potential

Making the very rough assumption that economic damage is proportional to radiative forcing with constant ratio over time

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FWIp and FWIe

Based on GTAP analysis

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Analytic Horizon (years)

Fu

el W

arm

ing

Po

ten

tial

Ethanol (Flows only)

Ethanol FWIp

Ethanol FWIe (3%)

Ethanol FWIe (7%)

Corn Ethanol Direct

Carbon Intensity relative to gasoline

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Social Cost of CarbonAPPENDIX 15A. SOCIAL COST OF CARBON FOR

REGULATORY IMPACT ANALYSIS UNDER EXECUTIVE ORDER 12866

Key assumptions are embedded in integrated assessment models (including damage functions) and

discount rates decisions

$5-$65/ton in 2010 rising to $16-$135 in 2050

The purpose of the “social cost of carbon” (SCC) estimates […] is to […] incorporate the social benefits of reducing carbon dioxide (CO2) emissions into cost-benefit analyses of regulatory actions that have small, or “marginal,” impacts on cumulative global emissions.

The SCC is an estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year. It is intended to include (but is not limited to) changes in net agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem services due to climate change.

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Summary

• Fuel Warming Potential aggregates emissions over time into a relative carbon intensity metric based on a biophysical analysis of their impact on global warming

Analogous to Global Warming Potential for different GHGs

Early emissions are weighed more heavily because of persistence of GHGs in the atmosphere

• Economic discounting should be applied to damages rather than emissions

Discounting damages increases the weight of near term emissions relative to longer term benefits

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Additional References

O’Hare, Plevin, Martin, Jones, Kenall, Hopson, ERL 2009

BTIME – get the paper, play with the speadsheet at http://rael.berkeley.edu/sites/default/files/BTIME/

EPA, 2009.

Peer Review Report: Methods and Approaches to Account for Lifecycle Greenhouse Gas Emissions from Biofuels Production Over Time

Anderson-Teixeira & DeLucia. 2010. Global Change Biology.

The Greenhouse Gas Value of Ecosystems

Vasseur, Lesage, Emargni, Deschenes, Samson, EST 2010

Considering Time In LCA: Dynamic LCA And Its Application To Global Warming Impact Assessments