Climate Policy

Abstract: The Paris Agreement (UN, 2015) has established a global target of keeping the increase in the global average surface temperature to “well below” 2°C relative to preindustrial levels, and to pursue efforts to limit the temperature rise to 1.5°C. There are numerous scenarios for greenhouse gas (GHG) emission trajectories that are consistent with the climate stabilization at different levels. Many examples are included as part of the scenario assessment by the UN Intergovernmental Panel on Climate Change (IPCC, 2014) that summarizes the results from the scientific literature from different modeling groups. Fossil fuels are a primary source of human-induced GHG emissions and fossil fuel producers recognize the importance of energy-related emissions (Shell, 2013; BP, 2018; ExxonMobil, 2018). To provide an assessment of the temperature implications of the latest Shell scenario called “Sky” (Shell, 2018), we apply the MIT Integrated Global System Modeling (IGSM) framework (Sokolov et al., 2018) that combines a representation of a global economy and the Earth components (land, ocean, atmosphere).

Abstract: A wide variety of scenarios of future economic development and the resulting greenhouse gas (GHG) emissions have played significant roles in climate policy discussions. These scenarios are dependent on many underlying assumptions about future human activity, the pace and shape of political and technological change, and the availability of natural resources. Some scenarios are developed simply as “storylines”, where no attempt is made to assign the likelihood of a particular scenario occurring. Other scenarios try to assign probabilities to specific outcomes. To project the development of human systems for a hundred years is a heroic exercise, but it is a desirable task for informing climate-related decisions.

Abstract: This paper assesses the range of CO2 transport and storage costs and evaluates their impact on economy-wide modelling results of decarbonization pathways. Much analytic work has been dedicated to evaluating the cost and performance of various CO2 capture technologies, but less attention has been paid to evaluating the cost of CO2 transport and storage. Many integrated assessment modeling studies assume a combined cost for CO2 transport and storage that is uniform in all regions, commonly estimated at $10/tCO2. Realistically, the cost of CO2 transport and storage is not fixed at $10/tCO2 and varies across geographic, geologic, and institutional settings.

We surveyed the literature to identify key sources of variability in transport and storage costs and developed a method to quantify and incorporate these elements into a cost range. We find that onshore pipeline transport and storage costs vary from $4 to 45/tCO2 depending on key sources of variability including transport distance, scale (i.e. quantity of CO2 transported and stored), monitoring assumptions, reservoir geology, and transport cost variability such as pipeline capital costs.

Using the MIT Economic Projection and Policy Analysis (EPPA) model, we examined the impact of variability in transport and storage costs by applying a range of uniform costs in all regions in a future where global temperature rise is limited to 2°C. We then developed three modeling cases where transport and storage costs vary regionally. In these latter cases, global cumulative CO2 captured and stored through 2100 ranges from 290 to 377 Gt CO2, compared to 425 Gt CO2 when costs are assumed to be uniformly $10/t CO2 in all regions.

We conclude that the widely used assumption of $10/tCO2 for the transport and storage of CO2 is reasonable in some regions, but not in others. Moreover, CCS deployment is more sensitive to transport and storage costs in some regions than others, particularly China. More analysis is needed to further quantify CO2 transport and storage costs at a regional level.  

Executive Summary: In many ways, farmers are uniquely vulnerable to the effects of climate change, but they are also strategically positioned to be part of the solution. According to the Environmental Protection Agency, U.S. agriculture directly contributes about 10% of the total greenhouse gas (GHG) emissions of the entire national economy. However, with the right incentives, farmers can significantly reduce their emissions and sequester carbon on their land – thus turning the agricultural sector into a net carbon sink and taking large steps toward mitigating climate change.

It is increasingly important that farmers should take climate change seriously and work to turn from the current course – both for the future viability of the farming sector, as well as the security of global food supplies. Extreme weather is already intensifying: in 2019, for example, areas of the Midwest went from flooding to drought within the space of three months. Over the next several decades, the situation will only get worse: higher average temperatures and more variability in precipitation (resulting in more intense droughts and more extensive floods) are projected to lead to significant reductions in crop yields and livestock performance.

In addition, changes in climatic patterns are expected to make crops and animals more susceptible to pests and diseases, as well as expand the geographic ranges in which pests, diseases, and invasive weeds might flourish. There are countless examples of how this could be devastating. For the corn industry, hotter and drier summers in the U.S. Midwest could lead to more frequent problems with aflatoxin – a dangerous mold that would render harvests worthless. Some estimates find that increased aflatoxin contamination could cause losses to corn farmers valued at up to $1.68 billion annually.

Fortunately, the U.S. agricultural industry already has strong solutions to help farmers reduce their emissions, sequester carbon, and mitigate climate change. These solutions vary by sector, but include implementing reduced tillage, cover cropping, rotational grazing, improved feeding practices for livestock, methane capture from livestock manure and crop waste, and improved energy efficiency for on-farm activities such as irrigation and crop drying, as well as the increased generation and use of renewable energy. If these practices were put into more widespread use, it could help the industry become a consistent net sink for GHG emissions.

The U.S. government already has a significant array of voluntary programs in place to encourage farmers to adopt these types of practices, primarily coming in the form of technical assistance, cost share assistance, and tax incentives. Some examples of current impactful government programs include the U.S. Department of Agriculture’s (USDA) Environmental Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP), which combined will provide about $2.55 billion in financial assistance for fiscal year 2021, under the provisions of the 2018 farm bill. There are also a number of federal incentives for production of energy from methane digesters, wind turbines, and solar panels. These include grants and guaranteed loans under USDA’s Renewable Energy for America Program (REAP), assistance for planning from AgStar, and loans under the Energy Efficiency and Conservation Loan program, both of which are operated jointly by USDA and the U.S. Department of Energy (USDOE).

And yet, in spite of these programs, government efforts remain inadequate and unfocused, as U.S. agriculture continues to generate significant GHG emissions. In order to change course, and ultimately encourage a critical mass of farmers to adopt sustainable practices, more resources are needed under all the federal programs described above. In addition, more funding is needed for agricultural research and development (R&D) to help farmers improve the efficiency of key inputs such as energy, fertilizer, and irrigation water. Advances in animal and plant genetics, for example, also offer opportunities to improve agriculture’s GHG profile.

With the right encouragement and incentives, U.S. agriculture could be a climate change mitigation success story – moving from a significant contributor of GHG emissions to becoming a net carbon sink. This paper will outline a number of opportunities for reducing emissions from agricultural sources, and discuss how current incentives and government programs could be structured to maximize farmer participation. While climate change is a significant threat to the agricultural industry and global food supplies, it is not too late to turn course. Farmers can leap to the forefront of the broader U.S. campaign to mitigate climate change before it is too late.

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