Energy and Climate- Solutions from the Land Nuffield Australian Farmers Conference March 8, 2010 Ernie Shea 25x’25 Project Coordinator

Formed through a grant from the Energy Future Coalition Organized to explore agriculture and forestry’s role in energy production Evolved to now include a diverse collection of agricultural, forestry, conservation, environment and business organizations and leaders 25x’25: a National Alliance

New Energy Future Fossil fuel resources are finite and diminishing Global energy consumption is increasing (nearly 60% by 2030) The world population is growing (9.1 billion by 2050) Fast-developing economies like India and China are demanding more resources Greenhouse gas emissions are increasing (World carbon dioxide emissions expected to increase by 1.9% annually between 2001 and 2025)

By the year 2025, America’s farms, ranches and forests will provide 25 percent of the total energy consumed in the U.S. while continuing to produce safe, abundant and affordable food, feed and fiber. Our Vision: 25x’25

This is a food, feed, fiber and fuel vision, that is economically viable for our society. With emerging technology we can produce multiple commodities.

Quads Renewable Energy 99.7 Quads Total Energy Consumed 31.7 Quads Renewable Energy Quads Total Energy Consumed 25x’25 is a BIG goal:

We will meet this goal by: Producing transportation fuels Harnessing wind energy Converting biogas emissions Capturing solar, hydro, and geothermal energy Providing biomass for generating heat and power

25x’25 Future

A 25x’25 Energy Future Means: $700 billion in annual economic growth 4-5 million new jobs 100 billion gallons of domestic biofuels quads of renewable electricity 1 billion ton reduction in GHG emissions

Governors’ Endorsements

State Legislature Resolutions

Passed by Congress as part of HR6 Signed into law by President Bush on December 19, x’25 is now a national renewable energy goal!

Critical Challenges & Opportunities Biofuel pushback Sustainability issues Woody biomass contributions Role of agriculture and forestry in a reduced carbon economy

Copenhagen Statement “Forestry and agriculture are where poverty reduction, food security and climate change come together and must be addressed in an integrated fashion”…… ( key message to negotiators from the ag and forestry communities, COP 15, Dec. 14, 2009)

25x’25 Carbon Work Group Charge: analyze agriculture and forestry’s role in a reduced-carbon economy and develop recommendations for how each sector can capitalize on efforts to reduce and capture carbon and greenhouse gas emissions.

Areas of Focus Ag and forestry impacts and opportunities; Mechanisms to manage GHG emissions; How ag and forestry could best participate in emerging carbon markets; and Guiding principles and policy imperatives

Carbon Work Group Key Findings Agriculture and forestry are uniquely positioned to deliver low-cost, near term and valuable solutions from the land: –Energy and national security –Economic development –Environmental services –Energy efficiency Under the right policy platform agriculture and forestry have much to gain from this opportunity.

Ag and forestry- responsible for 7 percent of total U.S. GHG emissions Source: EPA 2007

Have the potential to offset percent of total annual U.S. GHG emissions

Ag Reduction Opportunities Sequestration  Conservation tillage and crop rotations  Cover crops  Grazing practices  Biochar Avoided emissions  Biofuel production  Thermal bio-power and bio-heat  Renewable electrical power Emission reductions  Manure management  Fertilizer practices

Carbon Policy Imperatives Economically viable Include emission reductions, biological sequestration and avoided emissions Be outcome oriented and technology neutral Must be enforceable and allow ag and forestry to deliver reductions Recognize early actors

Primary Challenges Costs –Changes in operating practices –Tracking and selling offsets –Increased input cost (esp. fuel and fertilizer) Getting the correct enabling policy in place Development of viable markets Informing ag and forest sectors of opportunities, challenges, alternatives and consequences Shaping our own destiny

America is on a path to a low- carbon energy future that aims to: improve national security strengthen the economy contribute positively to the quality of life provide a cleaner environment

What is taking us there? Administration’s Energy Goals Congressional Actions EPA Actions Supreme Court and Federal Appeals Court Actions

Congressional Action Waxman-Markey (June ’09) Kerry- Boxer (Sept. ’09) Stabenow “CEPA” Kerry-Lieberman-Graham bill Collins-Cantwell Cap and Dividend bill Energy- only approach

Unresolved Policy Issues Carbon price mechanism Renewable Energy Incentives (RES) Transmission Upgrades Definition of eligible biomass Indirect land use issues Costs and impacts to economy Nukes and Clean Coal

Where are we? Renewable energy now 10.5 percent of total U.S. energy production Sheen on “bioenergy” solutions is fading; Policy makers focusing on “ultra cleans” Ag is a divided house; defensive strategies Food, feed, fiber, energy and climate challenges not being managed in an integrated fashion. Lack a comprehensive national energy plan

What’s coming? Pressure to deliver sustainable energy solutions will increase Climate change challenges will escalate $2 trillion global clean energy market China is rushing to capture this market Emerging opportunity to be compensated for environmental services

Potential Gross Revenue Source: EPA 2007

Carbon as a Revenue Crop

UT-25x’25 Study Crop Net Returns by Selected Scenario: 2010 – 2025

Total Net Returns*, 2025 Multiple Offsets / RCN Forage Replacement changes from baseline * Includes agriculture, livestock, forest residues, methane Regional impacts of Cap-and-Trade predominantly positive

Total Net Returns*, 2025 Multiple Offsets / RCN Herd Reduction changes from baseline * Includes agriculture, livestock, forest residues, methane However, regional impacts vary by livestock treatment

Points to Ponder We are on a path to a low carbon energy future Multiple drivers for change Regulatory solution looming if Congress fails to act Global Climate Change talks continuing Ag and forestry are well positioned to deliver solutions to climate change

America wants and needs a new energy future that is: cleaner improves national security strengthens the economy contributes positively to the quality of life Agriculture can contribute to these outcomes!