Carbon Sequestration in Agriculture

Institutional Responses to the Kyoto Protocol in Australia, Canada, the European Union and the United States

Collaboration

Linda M. Young – Montana StateAlfons Weersink – University of GuelphMurray Fulton – U of SaskatchewanB. James Deaton – University of Guelph

Institutional response

Why economic institutions emerged the way they did…

One question: the EU has a carbon market but does not support carbon sequestration in agriculture, while US lacks a viable carbon market but has limited support for carbon sequestration in agriculture

Inclusion of LULUFC in KP

Ratification of the KP

Policies Supporting Agricultural Sequestration

Event Australia Canada EU US

LULUFC

KP

Policies

Possible Explanations Include:

1. Carbon sequestration opportunities

- perfect information?

2. Interest Group Pressure: Industry, Agricultural, Environmental

3. Institutional Inertia

Inclusion of Sinks- LULUCF

Hotly debated: whether or not to include sinks in the KP Rate of sequestration one problem Another with potential release

Fear: granting credits not achieving real reductions

EU: emissions reductions – not sequestration Baselines: in calculation of baselines?

Not in all countries inventories Credits but not in baselines also problematic

EU: advocate for “real” reductions

Environmental groups strongClimate Action Network “continues to have

fundamental concerns about the use of sinks under the KP…” and want a variety of guarantees, about biodiversity, no monoculture, social assessments and etc.

Agricultural interests not advocatesEventual compromise – internal

disagreement

US, Canada and Australia all favored sinks

US: undaunted by concerns about measuring and monitoring; unbalanced to ignore activities that remove carbon; comprehensive accounting to protect existing reservoirsCould account for ½ US reduction

commitments!

Australia’s position contradictory

Favored the inclusion of sinksBut actually, a net emitter in the land

change categoryRate of land clearing 40%> revegetationForestry provided an emission offset of 5%

national emissionsComparative advantage not the only

factor here

KP - put off the issue

In 2001 Marrakesh Accords – guidelines for LULUFC

Parties can receive credit for carbon sequestered through revegetation and cropland management in excess of 1990 levels.

If land use included in their inventory, must account for both emission and sink activity during the commitment period

Negotiation of KP

Conducted with a belief that they might be boundAustralian government never supportive

Use of sinks: reductions at least cost Information may not have been perfect

Industry groups – support as least costAgriculture – support as service provider

Ratification of the KP

EU and Canada have ratified itClinton administration negotiated

Bush won’t ratify Voluntary limits

Australia: never supportive; not ratified

EU Carbon Market

Began operation in 2005Limits emissions from 12,000 plants in

six industriesCan trade with other EU firms Linked to CDM and Joint Implementation

Restrict use of imported creditsWill not trade LULUFC activities

Canada

GOC consultations domestic trading scheme – operational 2006

LFEs have emission targetsCan purchase offsetsAlso (unlike EU) from carbon sinks ag and

forestryGOC limited the price of carbon credits –

CA$15/t

United States

Some companies have purchased credits

Idaho exampleChicago Climate Exchange

Industry/municipal members↓emissionsLimited trades Iowa Farm Bureau

Australia

No domestic trading programReviewing new federal program to

replace uncoordinated state programsNSW Electricity Benchmark SchemeSydney Futures Exchange

Registries/Inventories

Discussed in the paperImportant to establish baselines, for

reductions to count against however,A morass of details –

Effectiveness determined by how well they meeting international standards US case – credit towards future limits

Why Governments Might Support Carbon Sequestration

Achieve commitments at least costFavored by industry and agricultural

interest groupsEnvironmental groups – US , EUSupport producer income

Achieve other environmental goals

Perhaps not least cost for EU & CA

KP: rules, protocols still being devisedEU: busy with new institutions

NAPS, connection of JI and CDMAg seq. – lots of additional infrastructure

Canada: same, but more thought into role of agricultural sequestration

Have to meet unfinished int. standards

US Carbon Sequestration Programs

While KP rejected, agricultural sequestration not completely

Embraced on a low levelEQUIP and CRPMultitude of bills in CongressNot developing/meeting international

standards

EU

No market demandCAP also limited demandTreaty of Amsterdam

CAP 2000Still little in way of sequestration activities

Comparative Advantage and Stance

New studies revise estimates

First hypotheses – EU lacked comparative advantage

Canada

Environmental objectives not income support policy

GHG Mitigation program – cut emissionsIdentify and encourage sequestrationDevelopment of computer simulation

models

Australia

Only sequestration through treesLittle potential for sequestration through

crops – and salinity more pressing

Event Australia Canada EU US

LULUFC INFORMATION;

MAYBE INDUSTRY PRESSURE

CS OPPORTUNITY;

INTEREST GROUP PRESSURE

INFORMATION;

INTEREST GROUP PRESSURE;

LEADERSHIP

CS OPPORTUNITY;

INTEREST GROUP PRESSURE

KP INDUSTRY PRESSURE

INTERST GROUP AND SOCIETAL VALUES

INTERST GROUP AND SOCIETAL VALUES

LEADERSHIP

INDUSTRY PRESSURE

Policies INSTITUTIONS; ENV PROBLEMS;

INST HISTORY;

INTEREST GROUPS

INSTITUTIONS;

INTEREST GROUPS