Climate Change and...

Annotated Bibliography

Effects of Climate Change

Mitigation Costs

J. M. Antle, S. M. Capalbo, K. Paustian, M. K.Ali (2007). Estimating the economic potential for agricultural soil carbon sequestration in the Central United States using an aggregate econometric-process simulation model. Climatic Change V80 (1): 145-171

ABSTRACT: The purpose of this paper is to develop and apply a new method to assess economic potential for agricultural greenhouse gas mitigation. This method uses secondary economic data and conventional econometric production models, combined with estimates of soil carbon stocks derived from biophysical simulation models such as Century, to construct economic simulation models that estimate economic potential for carbon sequestration. Using this method, simulations for the central United States show that reduction in fallow and conservation tillage adoption in the wheat-pasture system could generate up to about 1.7 million MgC/yr, whereas increased adoption of conservation tillage in the corn–soy–feed system could generate up to about 6.2 million MgC/yr at a price of $200/MgC. About half of this potential could be achieved at relatively low carbon prices (in the range of $50 per ton). The model used in this analysis produced estimates of economic potential for soil carbon sequestration potential similar to results produced by much more data-intensive, field-scale models, suggesting that this simpler, aggregate modeling approach can produce credible estimates of soil carbon sequestration potential. Carbon rates were found to vary substantially over the region. Using average carbon rates for the region, the model produced carbon sequestration estimates within about 10% of those based on county-specific carbon rates, suggesting that effects of spatial heterogeneity in carbon rates may average out over a large region such as the central United States. However, the average carbon rates produced large prediction errors for individual counties, showing that estimates of carbon rates do need to be matched to the spatial scale of analysis. Transaction costs were found to have a potentially important impact on soil carbon supply at low carbon prices, particularly when carbon rates are low, but this effect diminishes as carbon prices increase.

This research was supported in part by the Montana State Agricultural Experiment Station, by the EPA STAR Climate Change program and by the Consortium for the Agricultural Mitigation of Greenhouse Gases. Although the research described in this article has been funded wholly or in part by the United States Environmental Protection Agency through grant R-82874501-0 to Montana State University, it has not been subjected to the Agency’s required peer and policy review and therefore does not necessarily reflect the views of the Agency and no official endorsement should be inferred.

Backeus, S., Wikstrom, P., Lamas, T. (2006). Modeling carbon sequestration and timber production in a regional case study. Silva Fennica 40 (4): 615-629

ABSTRACT: Forests make up large ecosystems and by the uptake of carbon dioxide can play an important role in mitigating the greenhouse effect. In this study, mitigation of carbon emissions through carbon uptake and storage in forest biomass and the use of forest biofuel for fossil fuel substitution were considered. The analysis was performed for a 3.2 million hectare region in northern Sweden. The objective was to maximize net present value for harvested timber, biofuel production and carbon sequestration. A carbon price for build-up of carbon storage and for emissions from harvested forest products was introduced to achieve an economic value for carbon sequestration. Forest development was simulated using an optimizing stand-level planning model, and the solution for the whole region was found using linear programming. A range of carbon prices was used to study the effect on harvest levels and carbon sequestration. At a zero carbon price, the mean annual harvest level was 5.4 million m3 , the mean annual carbon sequestration in forest biomass was 1.48 million tonnes and the mean annual replacement of carbon from fossil fuel with forest biofuel was 61,000 tonnes. Increasing the carbon price led to decreasing harvest levels of timber and decreasing harvest levels of forest biofuel. Also, thinning activities decreased more than clear-cut activities when the carbon prices increased. The level of carbon sequestration was governed by the harvest level and the site productivity. This led to varying results for different parts of the region.

Schneider, U. A., Mccarl, B. A. (2006). Appraising agricultural greenhouse gas mitigation potentials: effects of alternative assumptions. Agricultural Economics 35 (3): 277-287

ABSTRACT: There is interest in society in general and in the agricultural and forestry sectors concerning a land-based role in greenhouse gas mitigation reduction. Numerous studies have estimated the potential supply schedules at which agriculture and forestry could produce greenhouse gas offsets. However, such studies vary widely in critical assumptions regarding economic market adjustments, allowed scope of mitigation alternatives, and region of focus. Here, we examine the effects of using different assumptions on the total emission mitigation supply curve from agriculture and forestry in the United States. To do this we employ the U.S.-based Agricultural Sector and Mitigation of Greenhouse Gas Model and find that variations in such factors can have profound effects on the results. Differences between commonly employed methods shift economic mitigation potentials from -55 to + 85%. The bias is stronger at higher carbon prices due to afforestation and energy crop plantations that reduce supply of traditional commodities. Lower carbon prices promote management changes with smaller impacts on commodity supply.

Sperow, M. (2007). The marginal costs of carbon sequestration: Implications of one greenhouse gas mitigation activity. Journal of Soil & Water Conservation 62 (6): 367-375

ABSTRACT: This paper provides a method for estimating the marginal cost of soil carbon (C) derived from setting aside highly erodible cropland in the United States. Increases in soil carbon are estimated using a modified Intergovernmental Panel on Climate Change soil organic carbon inventory method and National Resources Inventory data. Marginal costs of soil carbon sequestration activities are based on the opportunity cost of removing highly erodible land from crop production using land rental rates adjusted to account for the productivity of cropland and Conservation Reserve Program rental rates. Total soil carbon sequestration from setting aside highly erodible land is over 10 Tg C yr−1 (11.0 Mtn C yr−1 ) on the 21.9 Mha (54.1 Mac) where corn, cotton, sorghum, soybean, wheat, or fallow were grown in 1997. The marginal cost of stored carbon based on these estimates range from $11 to $4,492 Mg−1 C ($10 to $4,075 tn−1 C) with a US weighted average of $288 Mg−1 C ($261tn−1 C). Changes in US crop production levels from removing land from crop production are also estimated.

G. Marland, R.A. Pielke, Sr., M. Apps, R. Avissar, R. A. Betts, K.J. Davis, P.C. Frumhoff, S.T. Jackson, L.A. Joyce, P. Kauppi, J. Katzenberger, K. G. MacDicken, R. P. Neilson, J. O. Niles, D. S. Niyogi, R. J. Norby, N. Pena, N. Sampson, Y. Xue (2003). The climatic impacts of land surface change and carbon management, and the implications for climate-change mitigation policy. Climate Policy 3 (2): 149-157

ABSTRACT: Strategies to mitigate anthropogenic climate change recognize that carbon sequestration in the terrestrial biosphere can reduce the build-up of carbon dioxide in the Earth’s atmosphere. However, climate mitigation policies do not generally incorporate the effects of these changes in the land surface on the surface albedo, the fluxes of sensible and latent heat to the atmosphere, and the distribution of energy within the climate system. Changes in these components of the surface energy budget can affect the local, regional, and global climate. Given the goal of mitigating climate change, it is important to consider all of the effects of changes in terrestrial vegetation and to work toward a better understanding of the full climate system. Acknowledging the importance of land surface change as a component of climate change makes it more challenging to create a system of credits and debits wherein emission or sequestration of carbon in the biosphere is equated with emission of carbon from fossil fuels. Recognition of the complexity of human-caused changes in climate does not, however, weaken the importance of actions that would seek to minimize our disturbance of the Earth’s environmental system and that would reduce societal and ecological vulnerability to environmental change and variability.

Stavins, R.N., K.R. Richards (2005). The cost of U.S. forest-based carbon sequestration. Pew Center on Global Climate Change: 52 p.

FIRST PARAGRAPH: When and if the United States decides on mandatory policies to address global climate change, it will be necessary to decide whether carbon sequestration should be part of the domestic portfolio of compliance activities. The potential costs of carbon sequestration policies will presumably be a major criterion, so it is important to assess the cost of supplying forest-based carbon sequestration in the United States. In this report we survey major studies, examine the factors that have affected their carbon sequestration cost estimates, and synthesize the results.

Ruth, M., Coelho, D., Karetnikov, D. (2008). The U.S. economic impacts of climate change and the costs of inaction. Renewable Resources Journal 25 (2): 15-18

ABSTRACT: It is argued that estimating the damage costs of a certain benchmark climate change is not sufficient. What is needed are cost functions and confidence intervals. Although these are contained in the integrated models and their technical manuals, this paper brings them into the open in order to stimulate discussion. After briefly reviewing the benchmark climate change damage costs, region-specific cost functions are presented which distinguish tangible from intangible losses and the losses due to a changing climate from those due to a changed climate. Furthermore, cost functions are assumed to be quadratic, as an approximation of the unknown but presumably convex functions. Results from the damage module of the integrated climate economy modelFUND are presented. Next, uncertainties are incorporated and expected damages are calculated. It is shown that because of convex loss functions and right-skewed uncertainties, the risk premium is substantial, calling for more action than analysis based on best-guess estimates. The final section explores some needs for further scientific research.

J.M. Rootzén, G. Berndes, N.H. Ravindranath, H.I. Somashekar, I.K. Murthy, P. Sudha, M. Ostwald (2009). Carbon sequestration versus bioenergy: A case study from South India exploring the relative land-use efficiency of two options for climate change mitigation. Biomass and Bioenergy In Press - Corrected Proof

ABSTRACT: This case study has been carried out as a comparison between two different land-use strategies for climate change mitigation, with possible application within the Clean Development Mechanisms. The benefits of afforestation for carbon sequestration versus for bioenergy production are compared in the context of development planning to meet increasing domestic and agricultural demand for electricity in Hosahalli village, Karnataka, India. One option is to increase the local biomass based electricity generation, requiring an increased biomass plantation area. This option is compared with fossil based electricity generation where the area is instead used for producing wood for non-energy purposes while also sequestering carbon in the soil and standing biomass. The different options have been assessed using the PRO-COMAP model. The ranking of the different options varies depending on the system boundaries and time period. Results indicate that, in the short term (30 years) perspective, the mitigation potential of the long rotation plantation is largest, followed by the short rotation plantation delivering wood for energy. The bioenergy option is however preferred if a long-term view is taken. Short rotation forests delivering wood for short-lived non-energy products have the smallest mitigation potential, unless a large share of the wood products are used for energy purposes (replacing fossil fuels) after having served their initial purpose. If managed in a sustainable manner all of these strategies can contribute to the improvement of the social and environmental situation of the local community.

H. Feng (2005). The dynamics of carbon sequestration and alternative carbon accounting, with an application to the upper Mississippi River Basin. Ecological Economics 54 (1): 23-35

ABSTRACT: Carbon sequestration is a temporal process in which carbon is continuously being stored/released over a period of time. Different methods of carbon accounting can be used to account for this temporal nature including annual average carbon, annualized carbon, and ton-year carbon. In this paper, starting by exposing the underlying connections among these methods, we examine how the comparisons of sequestration projects are affected by these methods and the major factors affecting them. We explore the empirical implications on carbon sequestration policies by applying these accounting methods to the Upper Mississippi River Basin, a large and important agriculture area in the US. We found that the differences are significant in terms of the location of land that might be chosen and the distribution of carbon sequestration over the area, although the total amount of carbon sequestered does not differ considerably across programs that use different accounting methods or different values of the major factors.

Winjum, J. K., Brown, S., Schlamadinger, B. (1998). Forest harvests and wood products: sources and sinks of atmospheric carbon dioxide. Forest Science 44 (2): 272-284

ABSTRACT: Changes in the net carbon (C) sink-source balance related to a country's forest harvesting and use of wood products is an important component in making country-level inventories of greenhouse gas emissions, a current activity within many signatory nations to the UN Framework Convention on Climate Change. We propose two approaches for estimating national C inventories from forest harvesting and wood product utilization (excluding forest regrowth): the atmospheric-flow method and the stock-change method. The former has the atmosphere as its system of interest and counts all flows to and from the atmosphere for a particular country. The latter looks at a country's forest and wood product C stocks and how they change over time. Here we develop these two methods, and estimate national C source-sink balance from the readily available FAO global forest products database for countries, regions, and the world. Both methods gave a worldwide estimated source of 980 Tg of C in 1990 as a result of forest harvests and wood product utilization; about 60% came from developing countries and 40% from developed countries. Estimates (Tg C) for selected developing countries for the atmospheric-flow/stock-change method were: Brazil, 72/73; India, 81/80; Indonesia, 53/56; and Ivory Coast, 3.9/4.3; and for selected developed countries (again atmospheric-flow/stock-change method): Canada, 36/50; Finland, 8.8/13; New Zealand, 2.7/3.4; and United States 141/138. Net wood exporters show lower numbers in the atmospheric-flow method, net wood importers in the stock-change method. Among the variables that most consistently and strongly affected C emissions for a given country in 1990 were: roundwood production, slash left to oxidize, and commodity wood put into uses ≥ 5 yr. We conclude with a discussion that shows how choosing either one of the two methods for wood harvest accounting has potential policy implications or impacts on the incentives or disincentives to use wood.

Kindermann, G., Obersteiner, M., Sohngen, B.., Sathaye, J., Andrasko, K., Rametsteiner, E., Schlamadinger, B., Wunder, S., Beach, R. (2008). Global cost estimates of reducing carbon emissions through avoided deforestation. Proceedings of the National Academy of Sciences 105 (30): 10302-10307

ABSTRACT: Tropical deforestation is estimated to cause about one-quarter of anthropogenic carbon emissions, loss of biodiversity, and other environmental services. United Nations Framework Convention for Climate Change talks are now considering mechanisms for avoiding deforestation (AD), but the economic potential of AD has yet to be addressed. We use three economic models of global land use and management to analyze the potential contribution of AD activities to reduced greenhouse gas emissions. AD activities are found to be a competitive, low-cost abatement option. A program providing a 10% reduction in deforestation from 2005 to 2030 could provide 0.3–0.6 Gt (1 Gt = 1 × 105 g) CO2 ·yr−1 in emission reductions and would require $0.4 billion to $1.7 billion·yr−1 for 30 years. A 50% reduction in deforestation from 2005 to 2030 could provide 1.5–2.7 Gt CO2 ·yr−1 in emission reductions and would require $17.2 billion to $28.0 billion·yr−1 . Finally, some caveats to the analysis that could increase costs of AD programs are described.

bottom right