Agriculture's Role in Greenhouse Gas Mitigation

Agricultures Role in Greenhouse Gas Mitigation

Agriculture's Role in Greenhouse Gas Mitigation

Prepared for the Pew Center on Global Climate Change
September 2006

By:
Keith Paustian, Colorado State University
John M. Antle, Montana State University
John Sheehan, National Renewable Energy Laboratory
Eldor A. Paul, Colorado State University

Press Release

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Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

This Pew Center report is the fourth in our series examining key sectors, technologies, and policy options to construct the “10-50 Solution” to climate change. The idea is that we need to tackle climate change over the next fifty years, one decade at a time. This report is also a companion paper to Agriculture and Forest Lands: U.S. Carbon Policy Strategies, being published simultaneously.

Our reports on electricity, buildings, and transportation described the options available now and in the future for reducing greenhouse gas emissions from those sectors. Agriculture may be less important than those other sectors in terms of its overall contribution to U.S. greenhouse gas emissions, but it has an important role to play within a strategy to address climate change. Agriculture is important not only because of the potential to reduce its own emissions, but because of its potential to reduce net emissions from other sectors. Agriculture can take carbon dioxide, the major greenhouse gas, out of the atmosphere and store it as carbon in plants and soils. Agriculture can also produce energy from biomass that can displace fossil fuels, the major contributor to greenhouse gas emissions.

Looking at options available now and in the future, this report yields the following insights for agriculture’s potential role in greenhouse gas mitigation:

• If farmers widely adopt the best management techniques to store carbon, and undertake cost-effective reductions in nitrous oxide and methane, aggregate U.S. greenhouse gas emissions could be reduced by 5 to 14 percent.

• With technological advances, biofuels could displace a significant fraction of fossil fuels and thereby reduce current U.S. GHG emissions by 9 to 24 percent. Using biomass to produce transportation fuels could also significantly reduce our reliance on imported petroleum.

• Further research is needed to bring down the costs of biofuels and, particularly if agriculture is to participate in a GHG cap-and-trade system, to better assess the impacts of practice changes.

• The level of reductions achieved will strongly depend on the policies adopted. Policies are needed to make it profitable for farmers to adopt climate-friendly practices, and to support needed research.

The authors and Pew Center would like to thank John Bennett, Henry Janzen, Marie Walsh, John Martin, and David Zilberman for their review of and advice on a previous draft of this report.

Executive Summary

The impact of human activities on the atmosphere and the accompanying risks of long-term global climate change are by now familiar topics to many people. Although most of the increase in greenhouse gas (GHG) concentrations is due to carbon dioxide (CO2) emissions from fossil fuels, globally about one-third of the total human-induced warming effect due to GHGs comes from agriculture and land-use change. U.S. agricultural emissions account for approximately 8 percent of total U.S. GHG emissions when weighted by their relative contribution to global warming. The agricultural sector has the potential not only to reduce these emissions but also to significantly reduce net U.S. GHG emissions from other sectors. The sector’s contribution to achieving GHG reduction goals will depend on economics as well as available technology and the biological and physical capacity of soils to sequester carbon. The level of reductions achieved will, consequently, strongly depend on the policies adopted. In particular, policies are needed to provide incentives that make it profitable for farmers to adopt GHG-mitigation practices and to support needed research.

The agricultural sector can reduce its own emissions, offset emissions from other sectors by removing CO2 from the atmosphere (via photosynthesis) and storing the carbon in soils, and reduce emissions in other sectors by displacing fossil fuels with biofuels. Through adoption of agricultural best management practices, U.S. farmers can reduce emissions of nitrous oxide from agricultural soils, methane from livestock production and manure, and CO2 from on-farm energy use. Improved management practices can also increase the uptake and storage of carbon in plants and soil. Every tonne of carbon added to, and stored in, plants or soils removes 3.6 tonnes of CO2 from the atmosphere. Furthermore, biomass from the agricultural sector can be used to produce biofuels, which can substitute for a portion of the fossil fuels currently used for energy.

Carbon stocks in agricultural soils are currently increasing by 12 million metric tonnes (MMT) of carbon annually. If farmers widely adopt the best management techniques now available, an estimated 70 to 220 MMT of carbon could be stored in U.S. agricultural soils annually. Together with attainable nitrous oxide and methane reductions, these mitigation options represent 5 to 14 percent of total U.S. GHG emissions. The relevant management technologies and practices can be deployed quickly and at costs that are low relative to many other GHG-reduction options. To achieve maximum results, however, policies must be put in place to promote, and make attractive to farmers, practices that increase soil carbon and efficiently use fertilizers, pesticides, irrigation, and animal feeds. It is also important to ensure funding to improve the measurement and assessment methods for agricultural GHG emissions and reductions, including expansion of the U.S. Department of Agriculture’s National Resource Inventory. In particular, this inventory needs to include a network of permanent sites where key management activities and soil attributes are monitored over time. Such sites would provide information vital to helping farmers select the most promising management practices in specific locations.

Profitability of management practices varies widely by region, as does the amount of carbon storage attainable. Initial national-level studies suggest that, with moderate incentives (up to $50/tonne of carbon, or $13 per tonne of CO2), up to 70 MMT of carbon per year might be stored on agricultural lands and up to 270 MMT of carbon per year might be stored through converting agricultural land to forests. Mitigation options based on storage of carbon in soils would predominate in the Midwest and Great Plains regions; whereas in the Southeast, agricultural land would tend to be converted to forestland. Information on the costs and supply of GHG reductions from reducing nitrous oxide and methane emissions are very limited, and more studies in these areas are needed.

Agriculture can also reduce GHG emissions by providing biofuels—fuels derived from biomass sources such as corn, soybeans, crop residues, trees, and grasses. Substitution of biofuels for fossil fuels has the potential to reduce U.S. GHG emissions significantly and to provide a major portion of transportation fuels. The contribution of biofuels to GHG reductions will be highly dependent on policies, fossil fuel prices, the specific fossil fuels replaced, the technologies used to convert biomass into energy, and per acre yields of energy crops. In a “best-case” scenario, where energy crops are produced on 15 percent of current U.S. agricultural land at four-times current yields, bioenergy could supply a total of 20 exajoules (EJ)—almost one-fifth of the total U.S. year-2004 demand for energy. This corresponds to a 14 to 24 percent reduction of year-2004 U.S. GHG emissions, depending on how the biomass is used. If advanced conversion technologies are not widely deployed, or if yield gains are more modest, GHG reductions would be on the order of 9 to 20 percent. For biofuels to reach their full potential in reducing GHG emissions, long-term, greatly enhanced support for fundamental research is needed.

Application of best management practices in agriculture and use of biofuels for GHG mitigation can have substantial ­co-benefits. Increasing the organic matter content of soils (which accompanies soil carbon storage) improves soil quality and fertility, increases water retention, and reduces erosion. More efficient use of nitrogen can reduce nutrient runoff and improve water quality in both surface and ground waters. Similarly, improving manure management to reduce methane and nitrous oxide emissions is beneficial to water and air quality and reduces odors. Biofuel use, particularly substituting energy crops for imported petroleum for transportation, has important energy security benefits. However, as biofuel use expands, it will be important to ensure that biomass is produced responsibly, taking both environmental and socio-economic impacts into consideration.

Although challenges remain, agriculture has much to offer in helping to reduce net GHG emissions to the atmosphere, while at the same time improving the environment and the sustainability of the agricultural sector. Further research and development will result in improved assessments of GHG contributions from agriculture, increases in agriculture’s contribution to renewable energy for the nation, better ways to manage lands, and design of more efficient policies. Government policy plays an important role in making best management practices and biofuel production economically attractive, and farmers will adopt best management practices for GHG reduction only if they seem profitable. Perceived risks and availability of information and capital play important roles in perceptions of profitability. Thus, risk reduction, availability of information, and access to capital are some of the key issues that must be addressed through policies. With the right policy framework, U.S. farmers will be important partners in efforts to reduce GHG emissions while reaping multiple co-benefits.

Conclusions

Farmers’ decisions about whether to adopt new management practices and whether to grow energy crops will ultimately determine the level of success of any agricultural sector GHG mitigation strategy. Farmers’ decisions are motivated first and foremost by what they perceive to be most profitable. Thus, mitigation practices must be economically attractive to farmers. If farmers can be persuaded to adopt desired practices, the impacts on GHG emissions could be significant. It is technically feasible that 70 to 220 million metric tons (MMT) of carbon could be added to U.S. agricultural soils annually over two to three decades. This would remove 260 to 810 MMT of carbon dioxide (CO2) from the atmosphere annually, offsetting 4 to 11 percent of current U.S. GHG emissions. Economic potential to store carbon varies substantially by region, and current studies suggest that at prices of $50 per tonne of carbon ($13 per tonne CO2), soil carbon increases would be limited to 70 MMT per year. If an aggressive research and development (R&D) program succeeds in substantially improving per-acre yields of energy crops and reducing costs of conversion technologies, biomass from agricultural sources could supply up to 19 percent of total current U.S. energy consumption. This would yield GHG savings on the order of 180 to 470 MMT of carbon, which is equivalent to reducing CO2 emissions by 670 to 1,710 MMT CO2 per year (by substituting for fossil fuels) or 9 to 24 percent of total U.S. year-2004 GHG emissions.

Overall, studies so far indicate that agriculture is likely to be a competitive supplier of emission reductions if and when farmers are offered suitable payments. Among agricultural mitigation options, soil carbon sequestration will likely be most significant for lower carbon prices (less than $50 per tonne of carbon or $13 per tonne CO2). At higher prices, afforestation and biofuel options become increasingly more competitive.

Agricultural activities have a broad and multi-faceted impact on all three of the main GHGs—carbon dioxide, methane, and nitrous oxide—and policies designed to mitigate GHGs must consider impacts on all three GHGs. Globally, land use (including agriculture) accounts for about one-third of all GHG emissions due to human activities. In the United States the proportional contribution is smaller, about 8 percent of net U.S. GHG emissions. A variety of agricultural sources contribute to these emissions, including fossil fuel consumption in agricultural production; oxidation of soil organic matter and attendant CO2 releases; nitrous oxide emissions from nitrogen fertilizer, manure, and plant residues; and methane emissions from ruminant animals, animal wastes, and flooded rice.

However, agriculture as a sector is unique in that it can function as a sink for both CO2 and methane, helping to reduce their concentrations in the atmosphere. In addition, agricultural production of biofuels can provide a substitute for some of the fossil fuel currently used for energy. Thus, agricultural mitigation of GHGs includes utilization of agriculture’s sink capacity, reduction of agricultural emissions, and bioenergy production. Utilization of agriculture’s sink capacity is primarily accomplished through increasing soil carbon stocks. Soil carbon increases, which are typically in the 0.1 to 1 tonnes per hectare per year range, could be achieved through adoption of practices such as:

• Reducing the frequency and intensity of soil tillage;
• Including more hay crops in annual rotations;
• Production of high-residue-yielding crops and reduced fallow periods;
• Improved pasture and rangeland management; and
• Conservation set-asides and restoration of degraded lands.

Although soil emissions of nitrous oxide constitute the largest GHG emissions from U.S. agriculture in terms of global warming potential, both measuring emissions and achieving large reductions will be challenging. On average, nitrous oxide emissions are roughly proportional to the amount of nitrogen added to soils, through nitrogen fertilizer, manure, and nitrogen-fixing legume crops. Since nitrogen fertilizer use is an important component of modern, high-yield agriculture, more efficient use of nitrogen inputs is the key to reduction of nitrous oxide emissions through:

• Use of soil testing to determine fertilizer requirements;
• Better timing and placement of fertilizer; and
• Use of nitrification inhibitors and controlled-release fertilizer.

Agricultural methane emissions in the United States occur largely from livestock production through enteric fermentation and during manure storage. Methane capture and use to produce energy is an almost ideal way to address emissions from manure, as it reduces methane emissions, reduces GHG emissions from fossil fuels by providing a substitute energy source, and also provides air and water quality benefits. Strategies to address emissions from enteric fermentation include: improving animal health and genetics, feed additives, and more productive grazing systems.

Storing carbon in soils, reducing nitrous oxide and methane emissions, and producing energy from animal wastes all are potential sources of income or cost reductions for farmers. Relatively few studies of the economic feasibility of agricultural soil carbon sequestration have been done to date, and studies of the economics of nitrous oxide and methane reductions are even more limited. Initial conclusions from studies of the profitability of practices that sequester carbon include:

• Geographic differences in the technical potential and cost of carbon sequestration are substantial;

• Cost considerations are likely to limit agricultural mitigation to levels well below those suggested by technical potential; and

• Strategies based on contracts that pay per tonne of carbon stored or that take into account geographic variation in environmental and economic conditions are more economically efficient (less costly) than contracts based on average conditions.

In addition to profitability strictly defined, several other factors are likely to affect farmers’ willingness to participate in mitigation programs:

• Risk, particularly given the likelihood of long-term contracts for carbon sequestration and the high likelihood of changes in economic and technological conditions that can result in unforeseen costs;

• Financial constraints and access to credit when adopting new practices;

• Uncertainty about the long-term effects on crop productivity of adopting carbon sequestering practices;

• Program implementation costs, including contract and transaction costs; and

• Sociological factors, such as age and education level of farmers, farm size, and access to information.

Production of biomass energy could provide a significant opportunity for agriculture to contribute to GHG mitigation. The overall impact of agricultural biomass on GHG mitigation depends on (1) how much energy can be produced from biomass, and (2) the net (life cycle) GHG impact of biomass use for energy. Biomass is particularly well-suited to providing liquid fuel substitutes for petroleum. However, further development of advanced technologies for conversion of biomass into transportation fuels is needed to make biomass more cost-competitive with petroleum.

Current U.S. agricultural bioenegy products for transportation fuels include ethanol made from corn grain, and biodiesel. Although the efficiency of grain-based ethanol production has improved over time, fossil energy use in its production is still high (three units of fossil energy required to produce four units of ethanol energy), limiting its value as a GHG offset. Moreover, there is likely to be an upper limit on the amount of corn-grain ethanol that can be produced economically, currently estimated at 10 billion gallons per year, less than one percent of current energy demand. Biodiesel, made from oil seed crops (e.g., soybean, sunflower) is more energy efficient—about 1 unit of fossil energy to produce 3 units of biodiesel energy, but biodiesel from oil seed crops is currently 50 to 90 percent more expensive than conventional diesel.

Responsible use of agricultural residues such as corn stover or wheat straw for biofuel production could supply 2 to 6 percent of current total U.S. energy demand or 7 to 24 percent of total U.S. petroleum energy demand in the on-road transportation sector. Addressing sustainability issues (soil conservation) is important in determining the amount of residues that could be utilized. Production of energy crops such as switchgrass at current yield rates could displace perhaps an additional 3 percent of current energy supply while utilizing about 10 percent of the total U.S. agricultural area. Improvements in grass genetics could potentially boost this amount to 6 to 12 percent of current energy supply, using up to 15 percent of prime cropland. Potential bioenergy supply from corn, animal manure, CRP lands, agricultural residues, and energy crops grown on prime agricultural land could represent almost one-fifth of total year-2004 U.S. energy demand and more than 80 percent of current U.S. petroleum energy demand in the on-road transportation sector.

Designing and implementing effective agricultural mitigation strategies depends on cost-effective and reliable methods to estimate GHG fluxes and carbon stock changes. Collecting information on management activities such as tillage practices, fertilizer use, and grazing practices at some or all of the NRI locations would improve GHG inventories and assessments. Establishment of a national soil-monitoring network along with additional long-term experiments that include measurements of nitrous oxide and methane fluxes are also needed to improve GHG estimation methods and reduce uncertainty.

A single “magic bullet” solution to the problem of reducing GHG emissions from fossil energy is unlikely, and biomass can play a useful role within a diverse portfolio of GHG reduction strategies. Practices that sequester carbon can maintain and increase soil organic matter, thereby improving soil quality and fertility, increasing water-holding capacity, and reducing erosion. More efficient use of nitrogen and other farm inputs is key to reducing GHG emissions and nutrient runoff, as well as to improving water quality in both surface and ground waters. Using digesters to capture methane from animal wastes can improve air quality and reduce undesirable odors. Consequently, policies should consider not only the GHG benefits but also associated co-benefits to arrive at the most effective solutions in a comprehensive framework. Further R&D is needed to improve the assessment of agriculture’s GHG contributions, to find better ways to manage lands to improve environmental quality, to design efficient policies to implement mitigation options, and to strengthen agriculture’s potential to contribute to producing renewable energy. Although challenges remain, agriculture has much to offer in helping to reduce GHGs in the atmosphere while at the same time improving the environment and the sustainability of agricultural resources.

About the Authors

Keith Paustian
Professor
Colorado State University

Keith Paustian is a Professor in the Department of Soil and Crop Sciences and a Senior Research Scientist at the Natural Resources Ecology Laboratory (NREL) at Colorado State University.  He also serves on the Scientific Steering Committee for the US Carbon Cycle Science Program.  Professor Paustian co-chaired the Council on Agricultural Science and Technology (CAST) taskforce on agriculture, climate change, and greenhouse gases; and served as Coordinating Lead Author for the Intergovernmental Panel on Climate Change’s (IPCC) volume on greenhouse gas inventory methods for agriculture, forestry and other land use.

Professor Paustian’s work includes assessment of greenhouse gas emissions and carbon sequestration for the annual US inventory, and development of accounting tools for farmers and ranchers to get credit under the US 1605B voluntary GHG reduction program.  He and his colleagues have developed models for estimating GHG inventories in developing countries, models now being applied in 11 countries in Latin America, Africa and Asia.  Professor Paustian’s areas of research include assessment of agricultural mitigation strategies, evaluation of environmental impacts of agricultural bioenergy production, soil organic matter dynamics, and agroecosystem ecology.  Professor Paustian has written more than 100 journal articles and book chapters. He is currently working to develop effective mitigation strategies and better methods to measure and predict greenhouse gas (GHG) emissions from agriculture.

John M. Antle
Professor
Montana State University

John M. Antle is a professor in the Department of Agricultural Economics and Economics at Montana State University. He holds a B.A. in economics and mathematics from Albion College, and a Ph.D. in economics from the University of Chicago.  Prior to joining Montana State, he served as assistant and associate professor at the University of California, Davis; and as Gilbert White Fellow at Resources for the Future; senior staff economist for the President's Council of Economic Advisers; and member of the National Resource Council's Board on Agriculture.   He was President of the American Agricultural Economics Association from 1999-2000.  His current research focuses on the sustainability of agricultural systems, greenhouse gas mitigation and impacts of climate change in agriculture, and payments for ecosystem services in agriculture.

John Sheehan
Senior Engineer
National Renewable Energy Laboratory

John Sheehan holds a B.S. and an M.S. degree in chemical and biochemical engineering from the University of Pennsylvania and Lehigh University, respectively.   He has served as an analyst and project manager at the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) since 1991.  During his tenure at NREL, Sheehan has led research on the production and use of biodiesel and ethanol.  In the past six years, Sheehan has authored groundbreaking life cycle assessments of biodiesel and ethanol technology, including a comprehensive life cycle evaluation of soybean-based biodiesel.  His most recent study is an evaluation of the sustainability of use of agricultural residues as a feedstock for fuel ethanol production. 

From 2002 to 2005, Mr. Sheehan led strategic planning activities for the Department of Energy’s Biomass Program.  In October 2005, he joined the newly formed Strategic Energy Analysis Center at NREL, where he supports the Office of Planning, Budget and Analysis within DOE’s Office of Energy Efficiency and Renewable Energy.

Eldor A. Paul
Professor
Colorado State University

Eldor Paul is currently a Senior Research Scholar at the Natural Recourses Ecology Laboratory and Professor of Soil and Crop Sciences Colorado State University.   Previously he held academic positions in Canada, and at the University of California, Berkeley, and Michigan State University.

Professor Paul has written over 260 articles and books, and his research interests include the ecology of soil biota, the role of nutrients such as nitrogen in plant growth, and the dynamics of carbon and nitrogen in sustainable agriculture and global change. His studies on the sequestration of carbon and nitrogen under afforestation and the sensitivity of different soil organic matter fractions to increased temperatures have led to a better understanding of the role of soils in climate change.