Climate Change: An Overview
Background
According to the Environmental Protection Agency (EPA), multiple lines of evidence show that the earth’s climate is changing. The change is the result human activities that have caused a buildup of greenhouse gases in the atmosphere.
Earth’s temperature depends on a balance between energy entering and leaving the planet’s system. Energy enters the earth’s system in the form of sunlight. That sunlight is then reflected back into space or absorbed into the earth. Energy that is absorbed into the earth is then released as heat that warms the earth. Energy that is reflected back into space, does not warm the earth. Certain gases, known as “greenhouse gases,” within the earth’s atmosphere work to either slow or prevent the loss of heat into space. While the presence of greenhouse gases in the atmosphere is natural and needed to support life on earth, the recent buildup of those gasses is causing too much heat to be trapped within the planet’s system. This is causing the earth’s temperature to rise, which has led to a changing climate which has had negative impacts on human health, and natural ecosystems. Greenhouse gases are produced through a variety of human activities, including burning fossil fuels for energy, clearing forests, storing waste in landfills, and certain agricultural and industrial processes. The four key greenhouse gases largely responsible for global heating are carbon dioxide, methane, nitrous oxide, and F-gases which includes hydrofluorocarbons. Of those four, carbon dioxide is the primary contributor to climate change.
Climate change is affecting Americans across every region. Many economic sectors, such as agriculture and food security, water supplies, transportation, and energy have been or may be affected. Climate change is projected to become more disruptive throughout the twenty-first century and beyond. Extreme weather events are becoming more frequent. Recent years have shown an increase in drought, wildfires, poor air quality, and diseases transmitted by insects. Such events pose a great risk to agriculture because they have the potential to devastate crops and livestock in regions that are essential to maintaining America’s food supply.
Agriculture and forestry are somewhat unique in their ability to both produce and reduce greenhouse gasses. According to the EPA, agriculture in the United States accounts for 9% of the nation’s total greenhouse gas emissions. However, the biological processes inherent in agricultural production have the potential to offset vastly more emissions than they produce.
Reducing the amount of carbon dioxide present in the atmosphere is one of the primary methods currently used to counteract the effects of climate change. There are two main ways in which the amount of carbon dioxide in the atmosphere can be minimized. It can either be removed by a process called “carbon sequestration,” or emissions of carbon dioxide can be prevented or reduced at the source through “emissions reduction.” An emissions reduction is a specific set of practices that reduces the amount of greenhouse gas that is emitted. Examples of emissions reductions include clean forms of energy production, like wind, solar, hydro and biofuels. On the other hand, terrestrial carbon sequestration, as defined by the Department of Energy, “is the net removal of CO2 from the atmosphere by plants and microorganisms in the soil and the prevention of CO2 net emissions from terrestrial ecosystems into the atmosphere.” In other words, carbon sequestration is the process of pulling carbon out of the atmosphere and sequestering it in soil where it will not contribute to global heating. Typically, this process involves cultivating certain plants, and not tilling or otherwise disturbing the soil. Carbon sequestration projects can include reforestation, forestation, ocean and soil collections, and storage efforts. This topic will be further discussed below.
International Treaties on Climate Change
The United States was a signatory to the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, which set a goal to stabilize greenhouse gas concentrations in the atmosphere. Since the United States signed onto the UNFCCC, a variety of voluntary and regulatory actions have been proposed or undertaken, including monitoring of electric utility carbon dioxide emissions, improved appliance efficiency, and incentives for development of renewable energy sources. The EPA has initiated a partnership program in which businesses may participate on a voluntary basis. According to the EPA, this program has saved $37 billion and avoided emissions of 433 tons of carbon dioxide. In addition, cabinet departments, such as the Department of Energy, have supported research and innovation that would make fossil-fuel technologies cleaner and less harmful to both people and the environment.
In 2009, the EPA announced proposed findings that greenhouse gases “contribute to air pollution that may endanger public health or welfare.” This finding gave the EPA authority to regulate greenhouse gas emissions under the Clean Air Act.
In 2015, Congress enacted a multi-year phase-out of the renewable energy tax credit program. The program allowed for investment tax credits for investors who invested in renewable energy sources, which helped make the renewable energy industry cost-competitive and furthered research into renewable energy. The investment tax credit will be fully phased out by 2021.
In 2017, President Trump announced that the United States will withdraw from the Paris Climate Agreement. The Trump administration sent its official withdrawal to the United Nations, and the withdrawal became official in November of 2020. However, the Biden administration began the process to reenter the Paris Climate Agreement in 2021 shortly after taking office. The reentry became effective in February, 2021.
Emissions Trading and Carbon Credits
The government is also trying to reduce the United States’ carbon footprint through a market-based system known as emissions trading. Emissions trading, also referred to as cap-and-trade, or carbon credit trading, requires a governmental body to set a limit on the amount of a pollutant that can be emitted. Companies are issued emission permits, or allowances, which allow them to release a specific amount of pollutants. If the company needs to increase its emission allowance, it must buy credits from those who pollute less than its permitted amount. The transfer of allowances is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than was needed. The total amount of allowances and credits cannot exceed the set cap, thus limiting total emissions to that level. The cap itself is usually lowered over time, thus aiming toward a national emissions reduction target. Currently, federal regulations that allow this type of system are the Cross-State Air Pollution Rule (CSAPS) and the Acid Rain Program.
Carbon credits are part of this benefit/penalty scheme, and are the reason that a cap-and-trade system could become so important for agriculture. These credits are earned through carbon sequestration, which is the capture and secure storage of carbon dioxide that would otherwise be emitted to or remain in the atmosphere. The ability of plants to sequester carbon through photosynthesis plays an important role in removal of carbon dioxide from the atmosphere. Carbon is sequestered (and thus credit is earned) by conservation farming (typically no-till or strip-till practices), grass plantings, the installation and use of anaerobic methane digesters, or tree plantings and reforestation. The amount of carbon sequestered is verified by an approved verifier, either in person or on paper, depending on the amount claimed.
The first step in determining carbon credits is to develop carbon baselines. These baselines, established through scientific modeling, determine the measure of carbon sequestered as of a certain date. In other words, the baseline measures the amount of greenhouse gas emissions that would have resulted without any additional carbon-sequestering practices. The term for the consequential net effect of the carbon-sequestering practices is additionality. It requires measurement of the difference between the baseline and the final greenhouse gas reduction benefit.
Determining additionality can be difficult because the equation involves several other variables. One such variable is leakage. Leakage considers how events outside the protected boundary will reduce a project’s carbon sequestration benefit. For example, by avoiding deforestation in one place, trees might be removed more quickly somewhere else. Another variable that should be accounted for is permanence. While emissions reductions are permanent, sequestered emissions such as carbon stored in soil or trees are temporal in nature; they are only captured for a certain amount of time. Once the ground cover is destroyed or the trees are removed, the carbon is again released into the atmosphere.
Currently, there is a strictly voluntary system in place to sell or trade carbon credits. The Chicago Climate Exchange (CCX) was originally the only place to trade carbon credits in the United States, but closed in 2010 due to inactivity of United States carbon markets. However, carbon credits can still be earned and traded in large bundles to other carbon exchanges such as the European Climate Exchange (ECX) and the Carbon Trade Exchange (CTX). In order to sell credits on an exchange, participants must work through an aggregator. An aggregator combines credits from several participants to create a bundle of credits large enough to trade on the exchange. When a participant enters into a contract with an aggregator, the participant has given the aggregator the rights to the carbon sequestered in exchange for payment. The aggregator chooses when to sell the credits in the market established by the exchange, and within 24 hours of the sale will receive payment from the exchange into the aggregator’s account. Then, at varying times throughout the year, depending on the aggregator, sales are totaled and payments are made to program enrollees.
International Action on Climate Change
Climate change is of global concern and is not a topic that can be remedied through the actions of one country. The first treaty to address climate change, the United Nations Framework Convention on Climate Change (UNFCCC), was completed and opened for signature in 1992. This treaty included commitments to establish national action plans for voluntary measures that could reduce greenhouse gas emissions to 1990 levels by the year 2000. The United States was one of the first nations to sign and ratify this treaty, and it entered into force in 1994. However, it was soon concluded by the parties that mandatory, rather than voluntary, reductions in emissions of the six major greenhouse gases would be necessary. The resulting Kyoto Protocol, which was completed in 1997 and entered into force in February 2005, committed industrialized nations that ratify it to specified, legally binding reductions in emissions of the six major greenhouse gases. As of May 2009, the UNFCCC Secretariat reported that 183 nations have ratified or accepted the Kyoto Protocol. On December 8, 2012, the Doha Amendment to the Kyoto Protocol was adopted. While the United States signed the protocol, it has not been ratified by the Senate and the United States is not bound by the provisions. In December 2015, parties to the UNFCCC reached an agreement to combat climate change and to intensify the actions and investments needed for a sustainable low carbon future. This became known as the Paris Climate Agreement. To date, 189 countries have ratified the agreement.
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