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

Abstract

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.

Mitigating N<sub>2</sub>O emissions from soil: from patching leaks to transformative action

“…Therefore, finding the right denominator for assessing N 2 O emissions is a challenging task. Yield-scaled emissions are practical for assessing the eco-efficiency of a particular field, but are problematic when it comes to absolute emission reductions at a global scale (Van Groenigen et al, 2010;Murray and Baker, 2011 While the terms inter-and transdisciplinary research are frequently dropped as buzzwords, especially in research evolving around real-world problems, challenges associated with working across scholarly disciplines, or collaborations between academic and non-academic actors, cannot be underestimated. So-called interdisciplinary projects often regress to research consortia that merely accommodate exchange of final research findings, rather than fostering true joint creation of new knowledge (Bruce et al, 2004).…”

An Overview of Carbon Offsets from Agriculture

“…A possible solution is the establishment of insurance mechanisms for farmers who fail to reach the GHG threshold due to unexpected yield losses. Murray & Baker (2011) conclude that an intensity-based approach could be more effective as a transitional strategy to address emissions from agriculture but that, in the long term, policies should focus on absolute levels of emissions.…”

“…An output-based offset approach. Murray & Baker (2011) contrast the usage of the OBO approach over an area-based offset (ABO) approach when designing a carbon offset program. An ABO approach is focused on absolute GHG reductions that are determined per hectare under the specific conservation practice.…”

“…Their third approach is based on either (a) broadening an offset program to include more uncapped sectors or (b) enlarging a regulatory cap to include uncapped activities (Murray & Jenkins 2010). Alternatively, Murray & Baker (2011) claim that OBO could eliminate the need for a leakage discounting and that OBO credits implicitly capture leakage effects in on-site crediting. Murray & Baker focus on supply responses but ignore demand response, which is a major limitation of their model.…”

“…Besides these above-discussed four approaches for designing carbon offset policies, several papers list specific steps for implementing offset programs (see Antle et al 2003, Gramig 2010, Hahn & Richards 2010, Mooney et al 2002, Murray & Baker 2011, and Paustian et al 2001. Table 1 summarizes some empirical studies on carbon offset programs from agriculture.…”