Climate Change . . .Risks and Opportunities

Taylor Davis

John Deere Public Affairs Worldwide

October 16, 2007

Slide 2

Overview

• Background– Agriculture

– John Deere

• What’s Going on Now?– Who are the new players?

– What remains the same?

• Addressing Global Climate Change– State and regional actions

– Federal action

– Risks / Rewards / Roles

Slide 3

Background

• Greenhouse effect

• Greenhouse gases

• Are they pollutants – yes, according to US Supreme Court

Slide 4

Agriculture / Forestry

• Emissions– Inputs (e.g., fertilizer, mobile sources)

– Operations (e.g., methane)

• Carbon sinks/credits– Soil / forest carbon sequestration

– Credits under cap & trade system

• Low carbon biofuels– Ethanol

– Biodiesel

• Alternative energy (e.g., wind power)

Slide 5

John Deere / Climate Change

• Engines

• Manufacturing

• Products / customers

Slide 6

What’s Changed?

• Congressional control

• New / additional players– Business leaders– Religious groups, hunters/fishers, others– State, local, regional, involvement

• Massachusetts vs. Environmental Protection Agency– EPA has authority to regulate greenhouse gas emissions – CO2 within CAA broad definition of air pollutant– Catalyst for comprehensive federal climate change legislation

Slide 7

What’s The Same?

• Federal policy

• Regional differences (e.g., coal vs. non-coal states)

• Economic/competitiveness concerns

• Still need 60 Senate votes

• Difficult nature of solutions

Slide 8

Global Climate Change

Slide 9

State Action

• Busy with initiatives for various reasons– Climate concerns

– Economic development

– Energy prices

– Energy independence

– Air quality

– Traffic congestion

– Political leadership

Slide 10

States With GHG Emission Targets

Slide 11

State / Regional Actions(Regional Agreements)

Slide 12

State / Regional Actions(Registries)

Slide 13

State / Regional Actions (RPS)

Slide 14

State / Regional Actions(State Biofuels Mandates/Incentives)

Slide 15

Federal Action in 110th?

• 5 Key proposals for emissions reductions/ Cap-and-Trade– Sanders-Boxer: 42%/63%

– Kerry-Snowe: 42%/61%

– McCain-Lieberman: 39%/59%

– Feinstein-Carper: 25%/45%

– Bingaman-Specter: 7.6%/21.9%

• Some economy-wide, some just power sector

• Some are only “upstream,” others hybrid of “upstream” and “downstream”

Slide 16

Risks

• Events: flooding, drought, coastal erosion

• Regulatory: Clean Air Act, National Environmental Policy Act, Endangered Species Act, US EPA actions

• Litigation: Public nuisance claims, tort, state enforcement

• Reputation: Public and investor relations

• Competitive: Differentiating products and services

Slide 17

Rewards

• Security

• Economic – Products

– Services

• Environmental– Sustainable practices

– Air/water quality

Slide 18

Roles

• Business

• Non-governmental organizations

• Federal, local and state government

• Iowa’s role?– Low carbon fuels

– Other renewable energy resources

Slide 19

Climate Change . . .Risks and Opportunities

QUESTIONS?