1. Climate Change... Risks and Opportunities Taylor Davis John Deere Public Affairs Worldwide October 16, 2007

2. Slide 2 Overview Background –Agriculture –John Deere What’s Going on Now? –Who are the new players? –What remains the same? Addressing Global Climate Change –State and regional actions –Federal action –Risks / Rewards / Roles

3. Slide 3 Background Greenhouse effect Greenhouse gases Are they pollutants – yes, according to US Supreme Court

4. Slide 4 Agriculture / Forestry Emissions –Inputs (e.g., fertilizer, mobile sources) –Operations (e.g., methane) Carbon sinks/credits –Soil / forest carbon sequestration –Credits under cap & trade system Low carbon biofuels –Ethanol –Biodiesel Alternative energy (e.g., wind power)

5. Slide 5 John Deere / Climate Change Engines Manufacturing Products / customers

6. Slide 6 What’s Changed? Congressional control New / additional players –Business leaders –Religious groups, hunters/fishers, others –State, local, regional, involvement Massachusetts vs. Environmental Protection Agency –EPA has authority to regulate greenhouse gas emissions –CO 2 within CAA broad definition of air pollutant –Catalyst for comprehensive federal climate change legislation

7. Slide 7 What’s The Same? Federal policy Regional differences (e.g., coal vs. non-coal states) Economic/competitiveness concerns Still need 60 Senate votes Difficult nature of solutions

8. Slide 8 Global Climate Change

9. Slide 9 State Action Busy with initiatives for various reasons –Climate concerns –Economic development –Energy prices –Energy independence –Air quality –Traffic congestion –Political leadership

10. Slide 10 States With GHG Emission Targets

11. Slide 11 State / Regional Actions (Regional Agreements)

12. Slide 12 State / Regional Actions (Registries)

13. Slide 13 State / Regional Actions (RPS)

14. Slide 14 State / Regional Actions (State Biofuels Mandates/Incentives )

15. Slide 15 Federal Action in 110th? 5 Key proposals for emissions reductions/ Cap-and-Trade –Sanders-Boxer:42%/63% –Kerry-Snowe:42%/61% –McCain-Lieberman:39%/59% –Feinstein-Carper:25%/45% –Bingaman-Specter:7.6%/21.9% Some economy-wide, some just power sector Some are only “upstream,” others hybrid of “upstream” and “downstream”

16. Slide 16 Risks Events: flooding, drought, coastal erosion Regulatory: Clean Air Act, National Environmental Policy Act, Endangered Species Act, US EPA actions Litigation: Public nuisance claims, tort, state enforcement Reputation: Public and investor relations Competitive: Differentiating products and services

17. Slide 17 Rewards Security Economic –Products –Services Environmental –Sustainable practices –Air/water quality

18. Slide 18 Roles Business Non-governmental organizations Federal, local and state government Iowa’s role? –Low carbon fuels –Other renewable energy resources

19. Slide 19 Climate Change... Risks and Opportunities QUESTIONS?