1. Simplified time accounting for ILUC Michael O’Hare University of California, Berkeley July 2010 1EWG VII-10 O'Hare

2. Variables G v = “direct” – variable emissions from one MJ production G c = ILUC – capital investment emissions for one MJ production capacity EWG VII-10 O'Hare2

3. Challenge combine G v and G c with minimal assumptions to generate a per-MJ GHG intensity EWG VII-10 O'Hare3 Amortizing G c into a variable cost requires knowing production period Ignores atmospheric persistence & cumulative warming Should include a discount rate

4. EWG VII-10 O'Hare4 Kløverpris & Mueller: ILUC accelerates conversion

5. Implication of K-M model A single year of biofuel production, if cropland is overall increasing for other reasons, displaces ILUC that would occur anyway to one year earlier. EWG VII-10 O'Hare5

6. Note that: All discharges in this model occur within a year of each other, so residence time, analytic horizon, etc. don’t matter There is no avoiding a discount rate, for any action with a time delay component EWG VII-10 O'Hare6

7. If ILUC is land clearing that will occur anyway next year, (annual land clearing > biofuel ILUC) Example: US corn ethanol, Hertel et al G c G total = 60 + (800 x.05/1.05) = 98 EWG VII-10 O'Hare7

8. Refinements Production discharges might be discounted half a year (as though occurring in the middle of the year) Delayed afforestation needs to be handled with a complete time model EWG VII-10 O'Hare8