1. Carbon Sequestration in Agriculture Institutional Responses to the Kyoto Protocol in Australia, Canada, the European Union and the United States

2. Collaboration Linda M. Young – Montana State Alfons Weersink – University of Guelph Murray Fulton – U of Saskatchewan B. James Deaton – University of Guelph

3. Institutional response Why economic institutions emerged the way they did… One question: the EU has a carbon market but does not support carbon sequestration in agriculture, while US lacks a viable carbon market but has limited support for carbon sequestration in agriculture

4. Inclusion of LULUFC in KP Ratification of the KP Policies Supporting Agricultural Sequestration

5. EventAustraliaCanadaEUUS LULUFC KP Policies Possible Explanations Include: 1.Carbon sequestration opportunities - perfect information? 2. Interest Group Pressure: Industry, Agricultural, Environmental 3. Institutional Inertia

6. Inclusion of Sinks- LULUCF Hotly debated: whether or not to include sinks in the KP Rate of sequestration one problem Another with potential release Fear: granting credits not achieving real reductions EU: emissions reductions – not sequestration Baselines: in calculation of baselines? Not in all countries inventories Credits but not in baselines also problematic

7. EU: advocate for “real” reductions Environmental groups strong Climate Action Network “continues to have fundamental concerns about the use of sinks under the KP…” and want a variety of guarantees, about biodiversity, no monoculture, social assessments and etc. Agricultural interests not advocates Eventual compromise – internal disagreement

8. US, Canada and Australia all favored sinks US: undaunted by concerns about measuring and monitoring; unbalanced to ignore activities that remove carbon; comprehensive accounting to protect existing reservoirs Could account for ½ US reduction commitments!

9. Australia’s position contradictory Favored the inclusion of sinks But actually, a net emitter in the land change category Rate of land clearing 40%> revegetation Forestry provided an emission offset of 5% national emissions Comparative advantage not the only factor here

10. KP - put off the issue In 2001 Marrakesh Accords – guidelines for LULUFC Parties can receive credit for carbon sequestered through revegetation and cropland management in excess of 1990 levels. If land use included in their inventory, must account for both emission and sink activity during the commitment period

11. Negotiation of KP Conducted with a belief that they might be bound Australian government never supportive Use of sinks: reductions at least cost Information may not have been perfect Industry groups – support as least cost Agriculture – support as service provider

12. Ratification of the KP EU and Canada have ratified it Clinton administration negotiated Bush won’t ratify Voluntary limits Australia: never supportive; not ratified

13. EU Carbon Market Began operation in 2005 Limits emissions from 12,000 plants in six industries Can trade with other EU firms Linked to CDM and Joint Implementation Restrict use of imported credits Will not trade LULUFC activities

14. Canada GOC consultations domestic trading scheme – operational 2006 LFEs have emission targets Can purchase offsets Also (unlike EU) from carbon sinks ag and forestry GOC limited the price of carbon credits – CA$15/t

15. United States Some companies have purchased credits Idaho example Chicago Climate Exchange Industry/municipal members ↓ emissions Limited trades Iowa Farm Bureau

16. Australia No domestic trading program Reviewing new federal program to replace uncoordinated state programs NSW Electricity Benchmark Scheme Sydney Futures Exchange

17. Registries/Inventories Discussed in the paper Important to establish baselines, for reductions to count against however, A morass of details – Effectiveness determined by how well they meeting international standards US case – credit towards future limits

18. Why Governments Might Support Carbon Sequestration Achieve commitments at least cost Favored by industry and agricultural interest groups Environmental groups – US, EU Support producer income Achieve other environmental goals

19. Perhaps not least cost for EU & CA KP: rules, protocols still being devised EU: busy with new institutions NAPS, connection of JI and CDM Ag seq. – lots of additional infrastructure Canada: same, but more thought into role of agricultural sequestration Have to meet unfinished int. standards

20. US Carbon Sequestration Programs While KP rejected, agricultural sequestration not completely Embraced on a low level EQUIP and CRP Multitude of bills in Congress Not developing/meeting international standards

21. EU No market demand CAP also limited demand Treaty of Amsterdam CAP 2000 Still little in way of sequestration activities

22. Comparative Advantage and Stance New studies revise estimates First hypotheses – EU lacked comparative advantage

23. Canada Environmental objectives not income support policy GHG Mitigation program – cut emissions Identify and encourage sequestration Development of computer simulation models

24. Australia Only sequestration through trees Little potential for sequestration through crops – and salinity more pressing

25. EventAustraliaCanadaEUUS LULUFC INFORMATION; MAYBE INDUSTRY PRESSURE CS OPPORTUNITY; INTEREST GROUP PRESSURE INFORMATION; INTEREST GROUP PRESSURE; LEADERSHIP CS OPPORTUNITY; INTEREST GROUP PRESSURE KP INDUSTRY PRESSURE INTERST GROUP AND SOCIETAL VALUES LEADERSHIP INDUSTRY PRESSURE Policies INSTITUTIONS; ENV PROBLEMS; INST HISTORY; INTEREST GROUPS INSTITUTIONS; INTEREST GROUPS