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Climate Change Legislation

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Climate Change Legislation & Agriculture 2010 Nebraska Beef Feedlot Roundtables – PowerPoint PPT presentation

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Title: Climate Change Legislation


1
Climate Change Legislation Agriculture

2010 Nebraska Beef Feedlot Roundtables
2
Climate Change
Source www.conservationreport.com
3
Climate Change
Source Congressional Budget Office
4
GHG Emission Rules
  • Greenhouse gas rules are coming
  • Whether through legislation or regulation
  • EPA has the authority to regulate GHGs
  • Via Clean Air Act
  • However, Congress would like to set the rules
  • H.R. 2454, American Clean Energy and Security Act
    of 2009,
  • Passed in U.S. House of Rep. on 6/26/09, 219-212
  • S. 1733, Clean Energy Jobs and American Power Act
  • Introduced 9/30/09, In committee (actually, six
    committees)

5
U.S. GHG Emissions
Source EPA, Inventory of U.S. Greenhouse Gas
Emissions and Sinks 1990-2007
6
CO2 Emissions
Source EPA, Inventory of U.S. Greenhouse Gas
Emissions and Sinks 1990-2007
7
CH4 Emissions
Source EPA, Inventory of U.S. Greenhouse Gas
Emissions and Sinks 1990-2007
8
N2O Emissions
Source EPA, Inventory of U.S. Greenhouse Gas
Emissions and Sinks 1990-2007
9
GHG Emissions by Sector
Source EPA, Inventory of U.S. Greenhouse Gas
Emissions and Sinks 1990-2007
10
Agricultural GHG Emissions
Source EPA, Inventory of U.S. Greenhouse Gas
Emissions and Sinks 1990-2007
11
Climate Change Legislation
  • American Clean Energy and Security Act of 2009
    (H.R. 2454)
  • Requires utilities to supply an increasing
    percentage of their demand from a combination of
    energy efficiency savings and renewable energy
    (6 in 2012, 9.5 in 2014, 13 in 2016, 16.5 in
    2018, and 20 in 2021-2039).
  • Provides for issuing, trading, banking, retiring,
    and verifying renewable electricity credits.
  • Establishes targets to cap and reduce greenhouse
    gas (GHG) emissions, annually, so that GHG
    emissions from capped sources are reduced to 97
    of 2005 levels by 2012, 83 by 2020, 58 by 2030,
    and 17 by 2050 and establish a federal GHG
    registry.
  • Provides for trading, banking and borrowing,
    auctioning, selling, exchanging, transferring,
    holding, or retiring emission allowances.

Source Congressional Research Service
12
Climate Change Legislation
  • Agriculture provisions in H.R. 2454
  • Provides some exemptions from the GHG emission
    reduction requirements for agriculture and
    forestry
  • Provides incentive-based approach to GHG emission
    reduction/capture
  • Allows USDA to help establish eligible GHG offset
    practices and review of those practices
  • Shifts question on indirect-land-use to an
    independent panel for study with EPA and USDA to
    review in the future
  • Allows for a specific exemption for livestock
    (enteric fermentation from ruminant animals) from
    uncapped emissions guidelines

Source Craig Raysor, Gillon Associates, PLLC
13
Lots of Analysis
  • The EPA has funded the development of several
    models that are capable of examining the impact
    of this bill and other similar bills
  • The environmental economists who worked on these
    models are very well respected and the work is
    sound
  • However, the only certainty in the bill is the
    limit on carbon, everything else is assumption
    driven

Source ISU, Dermot Hayes presentation, Oct. 2009
14
Key Assumptions
  • The US economy was already on a slow growth path
    for energy consumption, the analysis assumes that
    this continues
  • Coal fired plants largely shut down and are
    replaced by nuclear
  • Enormous reliance on international and domestic
    offsets
  • If we cannot build the large number of nuclear
    plants or find the international offsets, then
    the price of carbon will increase at about twice
    the reported rate

Source ISU, Dermot Hayes presentation, Oct. 2009
15
Energy Sources
Source EPA Analysis of H.R. 2454, June 23, 2009
16
GHG Emissions Abatements
Source EPA Analysis of H.R. 2454, June 23, 2009
17
Domestic Offsets
  • Implementing regulations not yet written
  • Uncertainty about how the offsets would work in
    agriculture, particularly for conservation
    tillage, but the intention is clearly to use
    these offsets as a way to stimulate agricultural
    incomes
  • Consideration of leakage is prohibited pending a
    study
  • Heavy reliance on the growth of trees on pasture
    and crop land

Source ISU, Dermot Hayes presentation, Oct. 2009
18
Domestic Offsets
Source EPA Analysis of Waxman-Markey, April 20,
2009
19
Domestic Offsets
Source ISU, Dermot Hayes presentation, Oct. 2009
20
Shifting Land Patterns
Source EPA, Greenhouse Gas Mitigation Potential
in U.S. Forestry and Agriculture, Nov. 2005
21
International Offsets
  • Must be a developing country that is a member of
    a unilateral or multilateral emissions reduction
    agreement with the United States
  • Must have the technical capacity to monitor,
    measure, report and verify forest carbon fluxes
    resulting from deforestation
  • Must have the capacity to reduce emissions from
    deforestation, including strong forest governance
  • The international offset project itself must be
    shown to result in permanent verifiable
    reductions that are net of any leakage measures

Source ISU, Dermot Hayes presentation, Oct. 2009
22
Allowances
Source Congressional Research Service, June 2009
23
Carbon Prices Increase Over Time
Source EPA Analysis of H.R. 2454, June 23, 2009
24
Prices Are Sensitive to Offsets
Source EPA Analysis of H.R. 2454, June 23, 2009
25
Energy Price Paths
Source EPA Analysis of H.R. 2454, June 23, 2009
26
Impacts on an Average Household
Source EPA Analysis of H.R. 2454, June 23, 2009
27
Comparison of Results
Allowance Price
Source ISU, Dermot Hayes presentation, Oct. 2009
28
Climate Change Legislation Analysis
Source USDA, Office of Chief Economist,
The Impacts of the American Clean Energy and
Security Act of 2009 On U.S. Agriculture
29
Climate Change Legislation Analysis
Source USDA, Office of Chief Economist,
The Impacts of the American Clean Energy and
Security Act of 2009 On U.S. Agriculture
30
Climate Change Legislation Analysis
Source USDA, Office of Chief Economist,
The Impacts of the American Clean Energy and
Security Act of 2009 On U.S. Agriculture
31
Climate Change Legislation Analysis
Source USDA, Office of Chief Economist,
The Impacts of the American Clean Energy and
Security Act of 2009 On U.S. Agriculture
32
Concluding Thoughts
  • The potential for cropland conversion points to
    higher crop prices and feed costs
  • Crop prices and feed costs will likely track
    carbon prices
  • Cropland and pasture conversion will benefit
    landowners through higher rents
  • Agriculture will experience the benefits and the
    costs of climate change legislation

33
Thank you for your time!Any questions?
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