leakage accounting in forestry and agriculture
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Leakage Accounting in Forestry and Agriculture. Gordon Smith April 6-9, 2009 5th Forestry and Agriculture Greenhouse Gas Modeling Forum Shepardstown, West Virginia. Outline. Concepts, current practice & offset supply implications Needed research and modeling. Outline. - PowerPoint PPT PresentationTRANSCRIPT
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Gordon Smith
April 6-9, 20095th Forestry and Agriculture Greenhouse Gas Modeling Forum
Shepardstown, West Virginia
Leakage Accounting in Forestry and Agriculture
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Outline
• Concepts, current practice & offset supply implications
• Needed research and modeling
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Outline
• Concepts, current practice & offset supply implications
• Needed research and modeling
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Leakage definition
• Displacement of emissions from project area to outside project acrea
Kyoto accounting: Increased emissions within the project boundary
• Caused by project activity
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Cause of leakage
• If a project reduces supply of a good without reducing demand, the market will replace much of the lost supply
Leakage greater for smaller projects because no price increase decreasing consumption
• If replacement supply creates new emissions, leakage occurs
Emissions per unit of production may be higher, lower, or same as pre-project emissions
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Factors affecting leakage rate• Project type/activity
• Project location
• GHG accounting rules
• Project size
• External economic changes
Example: FASOM GHG shows US forest management large sink or source across recent variation in agricultural product prices
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Leakage by activity: Agriculture• Plowing to no-till: Little or none
May reduce yield in some situations, displacing production
• Reducing fertilizer use: Little or none
May reduce yield, displacing production
• Changing fertilizer use: None (possibly positive?)
• Changing manure management: None
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Leakage by activity: Forestry• Avoided deforestation: High
• Forest management: DependsGenerally high if reduces harvest
May only shift emissions in time
May be negligible if harvest maintained
• Afforestation: DependsSignificant if causes clearing elsewhere
May be negligible if combined with forest management**EPA. 2005. Greenhouse Gas Mitigation Potential in U.S. Forestry and Agriculture, EPA 430-R-05-006.
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Current treatment of leakage• Econometric estimates with cross-
sectoral interactions (EPA Climate Leaders)
• Address specific activities (CDM)
• Ignore (1605(b), RGGI)
• State that should be dealt with, but give no guidance (CCAR)
• Assign flat rate (VCS)
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Leakage varies by program
Climate Leaders 40.6%
CCAR (proposed forestry rules)
24%
CCX Not addressed
RGGI Not addressed
CDM Grazing analysis
Florida afforestation example
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Rules affect offset supply
• Reducing number of offsets credited increases cost of creating each offset
•Want policies to make actors responsible for their actions
Credit actual GHG benefits
Don’t credit actions without GHG benefit
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When GHG benefit occurs
• Current rules credit forest rotation extension with GHG benefit as carbon stock increases within project boundary
• Leakage indicates GHG benefit occurs when harvesting resumes
Credit actual GHG benefits
Don’t credit actions without GHG benefit
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Credit timing effect
When award offset Management change commitment
Harvest resumption
Project years offsets accrue
11-20 35
Tons CO2e/acre credited 19.4 19.4Levelized $/ton CO2, Year 11
$9.17 $31.12
Florida: extend pine rotation 20 to 35 years
6% discount rate
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Policy recommendations
• Assign low-leakage activities zero leakage rate
No-till, fertilizer N2O, manure management
• Deforestation fee (not offsets)
Applies to all conversions, including small areas
Fee set according to average carbon stock, by potential forest type and site productivity
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Forest management• Determining project additionality and
baseline is problematic
Modeled baseline depends on wood product prices
• Cap sector, not voluntary opt-in
Baseline can be set at average carbon stock by forest type and site productivity, avoiding problems of modeling profit-maximizing management
Avoids additionality and leakage problems
Smaller ownerships more likely to sequester; need to identify how small to set property size threshold for inclusion in cap
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Policy recommendations
• If forest management is capped, can assign afforestation zero leakage
Rewards entities that do good
• If no cap on forest emissions, more research is needed…
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Outline
• Concepts, current practice & offset supply implications
• Needed research and modeling
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Forest management research• US mapping of potential forest type and
site productivity
• Quantification of average carbon stocks, by forest type and site productivity
• Tool for overlaying map and land parcel boundaries to set baseline for each ownership
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Forest management research 2• Decadal variation in C stocks at
property scale, relative to average
How long and how far do C stocks go below average because of normal harvest, and how does this vary by ownership size?
• Natural disturbance
How many ownerships go below average C stock because of natural disturbance, how far, and how does this vary by ownership size?
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National-scale monitoring
• Needed for REDD
• Terrestrial C quantification protocols
For all land cover types
Must detect small % change
Must be repeatable
Must be do-able by developing countries
Desirable to be compatible with developed country methods
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“Factoring out”
• Can carbon effects of natural disturbance be separated from effects of human actions?
Used retrospectively to determine compliance with REDD & A1 targets
Use to allocate REDD payments between entities that control lands and national governments
At minimum, inventory “unmanaged” forest
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Global modeling
• How comprehensive must accounting be to avoid having to estimate leakage?
What other sectors should be addressed to limit leakage?
Which countries (for international leakage)?
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Comprehensive accounting•What land types must be counted to
get realistic counts?
Peat estimated to be 6% of global emissions: how measure area and depth of loss?
Develop inexpensive protocols for non-forest lands
Avoid things like recent Russian claim of a new billion ton sink
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REDD program design
•What are effects of alternative consequences for later reversal of REDD?
Cost in tons of emission
Cost in dollars to meet net emission target
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Program evaluation
•What REDD programs work, and why?
• Do soil protection programs enhance soil carbon stocks?
• Do educational programs affect GHG emissions?
No-till, fertilizer management, water management
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Model calibration
•What is correlation between actual behavior and profit maximizing behavior?
Necessary for constructing mitigation supply curves
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Most important needs• Support comprehensive GHG
accounting
Methods for counting, esp. non-forest lands
Volatility of fluxes
• Address fears of cap on forests
Which landowners have deficits from natural disturbance, and for how long?
Show banking can cover normal management
Climate feedbacks on unmanaged forest
• REDD: effects of alternative consequences for reversals
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Gordon Smith
Ecofor LLC206.784.0209
13047 12th Ave NWSeattle, WA 98177
USA
Thank you