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Minnesota’s agriculture in a carbon constrained economy Bjorn Gangeness November 27, 2007
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Climate Change in Context Nearly inarguable evidence showing human influence in raising average global temps The challenge of what to do and how Solutions coming from different levels of government and citizen participation Different sectors play different roles - energy generation to consumption to agricultural production
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Minnesota’s emissions reduction goals 80% reduced carbon emissions below 2005 levels in 2050, 30% in 2025 (eq. to 45.3MMT) Reductions could come from efficiencies, reduced energy use, carbon offsets, geologic capture and storage, or terrestrial capture and storage
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Carbon and Agriculture Source: bp.com
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Carbon and Agriculture Large agricultural industry in Minnesota overwhelmingly focused on corn and soy New initiatives that will make perennial biofuel crops more attractive Governor’s NextGen Energy Initiative Reinvest in Minnesota – Clean Energy
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New Crop Initiatives and Carbon The problem is the extent in considering carbon sequestration in development No mention of carbon stock goals No anticipation of carbon cap and trade system If addressed, perennial biofuels may develop more securely in an unsure marketplace
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Reinvest in MN – Clean Energy $46 million requested appropriation for 2008 $40 M for bioenergy crop easements $6 M for administration 13,000 acres expected easements for a maximum 20 year payment of $3077/acre Recognition of potential to work with other initiatives within the Federal Farm Bill Tiered system of payments depending on type of practice implemented
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Example of Tiered System Tier I ($1500/acre) Switchgrass Tier II ($2000/acre) At least 4 native prairie species Tier III ($3000/acre) At least 4 native prairie species and permanent easement status Tiers modeled on Conservation Security Program
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Relevant Criteria Economic Efficiency Ecological Integrity Simplicity ($/MTCO2e) Viability Wildlife habitat Water Quality Biodiversity Manageable Understandable Complementary
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Alternatives No action – simply allow biofuels incentives to move forward on the current path Integrate carbon credit system into the tiered payment structure based on BMPs Set carbon stock increase goals for each tier Full Appropriation Assumed ($46M in 2008)
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No Action Alternative Economic Efficiency 13000 acre goal but likely higher 1.6 MTCO2e/acre/yr 21,000 MT/yr or ~ 420,000 MT over 20 yrs ($95/MT) Ecological Integrity Monoculture Perennial is good for WQ Habitat is better than row-crop Simplicity Monoculture is easier to harvest, plant, manage
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Carbon Credit Integration Tier I - Switchgrass (CCX 1 MT/acre- yr, $2.50 or $37.45 on ECFI 2010) Tier II - At least 4 native prairie species (CCX 1 MT/acre-yr, $2.50 or $37.45 on ECFI 2010) Tier III - At least 4 native prairie species and permanent easement status (CCX 1 MT/acre-yr, $2.50 or $37.45 on ECFI 2010) Changes to Tiers
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Carbon Credit Integration Addresses benefits of credit trading in each tier No control over the carbon credit market so no price guarantees Carbon markets are still voluntary, though a national system could change that
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Carbon Credit Integration Economic Efficiency Minimal administrative fees to integrate and promote seeking of carbon credits for practices Stacked payments make incentives more attractive Ecological integrity Grass species are not distinguished for in CCX Simplicity More complicated than No action, but stacked payments outweigh administrative consequences
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Goal of Increased Carbon Stocks Tier I - Switchgrass (CCX 1 MT/acre- yr, $2.50 or $37.45 on ECFI 2010) Tier II - At least 4 native prairie species and wetland restoration (4.4 MT/acre-yr in wetlands) Tier III - At least 4 native prairie species, short rotation woody crops and permanent easement status (7MT/acre-yr in SRWC) Changes to Tiers
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Goals of Increased Carbon Stocks Higher sequestration goals per tier with mixed practices Economic Efficiency More diversified fuelstocks, less market sensitivity Higher payments for higher sequestration rates Ecological Integrity Wetlands and SRWCs create more diverse habitat than simple grass species Simplicity The most complicated option
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Recommendations Train technical assistance providers in carbon markets Follow the progress of the development of Midwest GHG Reduction Accord Incorporate data from NextGen cellulosic pilot projects Create flexibility within the RIM-CE structure that allows for more fluid transitions to alternative crops (among/between species)
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