Justin Baker

Set-asides can be better climate investment than corn ethanol

Although various studies have shown that corn ethanol reduces greenhouse gas (GHG) emissions by displacing fossil fuel use, many of these studies fail to include how land-use history affects the net carbon balance through changes in soil carbon content. We evaluated the effectiveness and economic value of corn and cellulosic ethanol production for reducing net GHG emissions when produced on lands with different land-use histories, comparing these strategies with reductions achieved by set-aside programs such as the Conservation Reserve Program (CRP). Depending on prior land use, our analysis shows that C releases from the soil after planting corn for ethanol may in some cases completely offset C gains attributed to biofuel generation for at least 50 years. More surprisingly, based on our comprehensive analysis of 142 soil studies, soil C sequestered by setting aside former agricultural land was greater than the C credits generated by planting corn for ethanol on the same land for 40 years and had equal or greater economic net present value. Once commercially available, cellulosic ethanol produced in set-aside grasslands should provide the most efficient tool for GHG reduction of any scenario we examined. Our results suggest that conversion of CRP lands or other set-aside programs to corn ethanol production should not be encouraged through greenhouse gas policies.

Opportunities and Constraints for Forest Climate Mitigation

Reversing forest losses through restoration, improvement, and conservation is a critical goal for greenhouse gas mitigation. Here, we examine some ecological, demographic, and economic opportunities and constraints on forest-loss mitigation activities. Reduced deforestation and forest degradation could cut global deforestation rates in half by 2030, preserving 1.5 billion to 3 billion metric tons of carbon dioxide-equivalent (tCO2e) emissions yearly. Our new economic modeling for the United States suggests that greenhouse gas payments of up to

Analysis of the production and transaction costs of forest carbon offset projects in the USA.

50 per tCO2e could reduce greenhouse gas emissions by more than 700 million tCO2e per year through afforestation, forest management, and bioelectricity generation. However, simulated carbon payments also imply the reduction of agricultural land area in the United States by 10% or more, decreasing agricultural exports and raising commodity food prices, imports, and leakage. Using novel transgenic eucalypts as our example, we predict selective breeding and genetic engineering can improve productivity per area, but maximizing productivity and biomass could make maintaining water supply, biodiversity, and other ecosystem services a challenge in a carbon-constrained world.

The costs of uncoordinated infrastructure management in multi-reservoir river basins

Forest carbon offset project implementation costs, comprised of both production and transaction costs, could present an important barrier to private landowner participation in carbon offset markets. These costs likewise represent a largely undocumented component of forest carbon offset potential. Using a custom spreadsheet model and accounting tool, this study examines the implementation costs of different forest offset project types operating in different forest types under different accounting and sampling methodologies. Sensitivity results are summarized concisely through response surface regression analysis to illustrate the relative effect of project-specific variables on total implementation costs. Results suggest that transaction costs may represent a relatively small percentage of total project implementation costs - generally less than 25% of the total. Results also show that carbon accounting methods, specifically the method used to establish project baseline, may be among the most important factors in driving implementation costs on a per-ton-of-carbon-sequestered basis, dramatically increasing variability in both transaction and production costs. This suggests that accounting could be a large driver in the financial viability of forest offset projects, with transaction costs likely being of largest concern to those projects at the margin.

Are hydropower and irrigation development complements or substitutes?: the example of the Nam Ngum River in the Mekong Basin

Though there are surprisingly few estimates of the economic benefits of coordinated infrastructure development and operations in international river basins, there is a widespread belief that improved cooperation is beneficial for managing water scarcity and variability. Hydro-economic optimization models are commonly-used for identifying efficient allocation of water across time and space, but such models typically assume full coordination. In the real world, investment and operational decisions for specific projects are often made without full consideration of potential downstream impacts. This paper describes a tractable methodology for evaluating the economic benefits of infrastructure coordination. We demonstrate its application over a range of water availability scenarios in a catchment of the Mekong located in Lao PDR, the Nam Ngum River Basin. Results from this basin suggest that coordination improves system net benefits from irrigation and hydropower by approximately 3–12% (or US

An output-based intensity approach for crediting greenhouse gas mitigation in agriculture: explanation and policy implications:

12-53 million/yr) assuming moderate levels of flood control, and that the magnitude of coordination benefits generally increases with the level of water availability and with inflow variability. Similar analyses would be useful for developing a systematic understanding of the factors that increase the costs of non-cooperation in river basin systems worldwide, and would likely help to improve targeting of efforts to stimulate complicated negotiations over water resources.

Will U.S. Forests Continue to Be a Carbon Sink

Hydropower and irrigation developments to address rising demand for food and energy are modifying the water balance of the Mekong Basin. Infrastructure investment decisions are also frequently made from a sub-catchment perspective. This paper compares river flows with irrigation development stages in the Nam Ngum sub-basin where the potential for irrigation and hydropower expansion is largely untapped. It shows that full hydropower development in this basin allows irrigation water use to triple, even as it reduces competition with environmental flow requirements. The implications for the wider Mekong are, however, unclear, particularly given uncertainty over parallel transformations elsewhere in the basin.

Evaluating the effects of climate change on US agricultural systems: sensitivity to regional impact and trade expansion scenarios

US legislators have recently proposed output-based emissions intensity metrics as an approach to credit greenhouse gas (GHG) offsets from agriculture and other uncapped sectors. This article explains the features and rationale of the output-based offset (OBO) approach, outlines a candidate accounting methodology, discusses the potential advantages and limitations of such an approach relative to the area-based offset (ABO) approach that is standard practice in some settings, and introduces possible policy implications. By incentivizing improvements in agricultural efficiency, the OBO approach strives to achieve the dual goals of food security and climate change mitigation. It expands the toolkit for achieving reductions in agricultural emissions, rewards technological advancement in both emission reductions and yields, and offers promise for addressing the problem of accounting for leakage. But because it is based on improvements in GHG efficiency in agriculture rather than on absolute reductions, emissions and climate risks could continue to rise while credits are being issued. An OBO approach might work best as a transitional strategy to address emissions from sectors or countries likely to remain outside a strict regulatory cap. Because it is the total atmospheric concentration of GHGs that creates the environmental threat of climate change, policies should ultimately focus not on the intensity of emissions but rather on their absolute levels.

Analyzing Economic Tradeoffs of Water Use in the Nam Ngum River Basin, Lao PDR

This paper develops structural dynamic methods to project future carbon fluxes in forests. These methods account for land management changes on both the intensive and extensive margins, both of which are critical components of future carbon fluxes. When implemented, the model suggests that U.S. forests remain a carbon sink through most of the coming century, sequestering 128 Tg C y−1. Constraining forestland to its current boundaries and constraining management to current levels reduce average sequestration by 25 to 28 Tg C y−1. An increase in demand leads to increased management and greater sequestration in forests. The results are robust to climate change. (JEL Q23, Q54)

Crop Productivity and the Global Livestock Sector: Implications for Land Use Change and Greenhouse Gas Emissions

Agriculture is one of the sectors that is expected to be most significantly impacted by climate change. There has been considerable interest in assessing these impacts and many recent studies investigating agricultural impacts for individual countries and regions using an array of models. However, the great majority of existing studies explore impacts on a country or region of interest without explicitly accounting for impacts on the rest of the world. This approach can bias the results of impact assessments for agriculture given the importance of global trade in this sector. Due to potential impacts on relative competitiveness, international trade, global supply, and prices, the net impacts of climate change on the agricultural sector in each region depend not only on productivity impacts within that region, but on how climate change impacts agricultural productivity throughout the world. In this study, we apply a global model of agriculture and forestry to evaluate climate change impacts on US agriculture with and without accounting for climate change impacts in the rest of the world. In addition, we examine scenarios where trade is expanded to explore the implications for regional allocation of production, trade volumes, and prices. To our knowledge, this is one of the only attempts to explicitly quantify the relative importance of accounting for global climate change when conducting regional assessments of climate change impacts. The results of our analyses reveal substantial differences in estimated impacts on the US agricultural sector when accounting for global impacts vs. US-only impacts, particularly for commodities where the United States has a smaller share of global production. In addition, we find that freer trade can play an important role in helping to buffer regional productivity shocks.