United States Environmental Office of Atmospheric Programs (6207J) EPA 430-R-05-006 Protection Agency Washington, DC 20460 November 2005 Greenhouse Gas Mitigation Potential in U.S. Forestry and Agriculture

How to obtain copies You can electronically download this document from U.S. EPA���s web page at http://www.epa.gov/sequestration. To request free copies of this report, call the National Service Center for Environmental Publications (NSCEP) at 1 - (800) 490-9198. For further information For further information, contact Kenneth Andrasko, (202) 343-9281, andrasko.ken@epa.gov, or Benjamin DeAngelo, (202) 343-9107, deangelo.ben@epa.gov, U.S. Environmental Protection Agency.

Greenhouse Gas Mitigation Potential in U.S. Forestry and Agriculture November 2005 United States Environmental Protection Agency Office of Atmospheric Programs (6207J) 1200 Pennsylvania Ave., NW Washington, DC 20460

GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE

Acknowledgments This report was prepared under a contract between the U.S. Environmental Protection Agency (EPA) and RTI International. The main authors of the report are Brian C. Murray, Brent Sohngen,1 Allan J. Sommer, Brooks Depro, and Kelly Jones of RTI Bruce McCarl of Texas A&M University and Dhazn Gillig of American Express Corporation 2 and Benjamin DeAngelo and Kenneth Andrasko of EPA. The report was edited by Kenneth Andrasko and Benjamin DeAngelo of EPA. The authors acknowledge the FASOMGHG model develop- ment efforts over the past decade of Darius Adams of Oregon State University Ralph J. Alig of the USDA Forest Service in Corvallis, OR John ���Mac��� Calloway, UNEP Risoe Centre on Energy, Climate and Sustainable Development and Steven Winnett, EPA. We thank the following external reviewers: Richard Birdsey, USDA Forest Service John Brenner, USDA Natural Resources Conservation Service Suzie Greenhalgh, World Resources Institute Cesar Izaurralde, Pacific Northwest National Laboratory Jan Lewandrowski, USDA Office of the Chief Economist Ruben Lubowski, USDA Economic Research Service Michelle Manion, Union of Concerned Scientists Reid Miner, National Council for Air and Stream Improve- ment Sian Mooney, University of Wyoming Keith Paustian, Colorado State University Neil Sampson, The Sampson Group Ron Sands, Pacific Northwest National Laboratory and Tristram West, Oak Ridge National Laboratory. We also thank other EPA reviewers: Steven Rose, Francisco de la Chesnaye, Dina Kruger, Allen Fawcett, and John Powers. Research assistance was provided by Laurel Clayton and Catherine Corey of RTI. Sharon Barrell of RTI coordinated editing and publications support. 1 Dr. Sohngen was on sabbatical from The Ohio State University when working on this report at RTI. 2 Dr. Gillig was at Texas A&M University when she performed this work. GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE i

GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE ii

Table of Contents Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii List of Tables, Figures, and Boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Tables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii Figures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii Boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ES-1 1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-1 Purpose and Approach of this Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3 Organization of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3 2. Greenhouse Gas Mitigation Options in U.S. Forestry and Agriculture. . . . . . . . . . . . . . . . . . . . . . .2-1 Chapter 2 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1 Carbon Sequestration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1 Afforestation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2 Forest Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2 Agricultural Soil Carbon Sequestration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5 Grassland Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5 Grazing Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5 Riparian Buffers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-6 GHG Emissions Reduction Options in Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-6 Reduction of CO2 Emissions from Fossil Fuel Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-6 Reduction of Non-CO2 GHG Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-6 Biofuel Offsets of Fossil Fuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-9 Unique Time Dynamics of Carbon Sequestration Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-9 ���Saturation��� of Carbon Sequestration to Equilibrium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-9 Reversibility of Carbon Sequestration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11 Accounting for Carbon after Timber Harvests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12 Addressing Carbon Sequestration Dynamics in this Report. . . . . . . . . . . . . . . . . . . . . . . . . . 2-12 GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE iii

3. Modeling Framework and Baseline. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-1 Chapter 3 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1 Modeling Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1 General Model Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2 Geographic Coverage/Regional Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4 Land Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4 General Economic Concepts: Optimizing Behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4 Forest-Sector Economic Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-6 Agriculture-Sector Economic Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8 Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9 Cross-Sector Land Interaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-10 Greenhouse Gas Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-10 Non-GHG Environmental Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-13 GHG Mitigation Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-13 Baseline GHG Projections from the Forest and Agriculture Sectors . . . . . . . . . . . . . . . . . . . . . . . 3-15 FASOMGHG Baseline Projections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-15 Comparison of FASOMGHG Baseline GHG Projection to Other Published Estimates . . 3-19 Applying FASOMGHG for the Purposes of this Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-24 4. Mitigation Potential: Comprehensive Scenarios with All Activities and All GHGs . . . . . . . . . . . . .4-1 Chapter 4 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1 Mitigation Responses under Various GHG Mitigation Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-2 Scenarios Description: Constant and Rising Incentives for GHG Mitigation . . . . . . . . . . . . 4-2 Mitigation Response to Constant GHG Price Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5 Mitigation Response to Rising GHG Price Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-18 Comparison of FASOMGHG Results with Other Analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-21 Richards and Stokes (2004): Forest Carbon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-21 Stavins (1999): Afforestation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-22 Sedjo, Sohngen, and Mendelsohn (2001): Forest Carbon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-23 USDA, Economic Research Service (2004): Agricultural Carbon Sequestration. . . . . . . . . 4-24 Recap of Study Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-24 Appendix 4.A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-25 GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE iv

5. Mitigation Potential of Selected Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5-1 Chapter 5 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-1 Fixed Quantities of National GHG Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2 National-Level Results by Activity and Time Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2 Regional Activity Contributions to National Mitigation Levels . . . . . . . . . . . . . . . . . . . . . . . . 5-7 National Mitigation Quantity Scenarios Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8 Limiting Payments by GHG Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8 Paying for CO2 Only vs. Paying for All GHGs: $15/t CO2 Eq. . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8 CO2 Only: Mitigation Over Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-9 Selected Activity Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-9 National Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-11 Regional Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-11 6. Implications of Mitigation via Selected Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6-1 Chapter 6 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-1 Project Quantification Issues and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-2 Quantifying the Net GHG Contribution of Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-2 Other Project Implementation Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-11 Preliminary Assessment of Implementation Factors by Major Mitigation Activity . . . . . . 6-13 Per-Acre Payments for Carbon Sequestration to Address Measurement Difficulties. . . . . . . . . 6-14 Scenario Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-14 Per-Acre Payments for Carbon Sequestered through Afforestation . . . . . . . . . . . . . . . . . . . 6-16 Per-Acre Payments for Agricultural Soil Carbon Sequestered through Changes in Tillage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-17 7. Non-GHG Environmental Co-effects of Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1 Chapter 7 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1 Land Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1 Regional Distribution of Land Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2 Timberland Management Intensity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-5 Agricultural Nonpoint Pollutant Runoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-5 Changes in Agricultural Runoff and Water Quality���Results from a Separate Case Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-8 Implications for Biodiversity of GHG Mitigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-11 GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE v

8. Summary of Insights on Key GHG Mitigation Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8-1 Key Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-1 Insights from Analyzed Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-2 While national mitigation rates decline over time (under constant price scenarios), cumulative GHG mitigation steadily increases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-2 Identifying attractive activities may require looking at a range of characteristics for each option.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-3 The quantity and timing of mitigation can determine the selected activities. . . . . . . . . . . . 8-3 Achieving a specific mitigation level within a narrow time frame may shift emissions to periods before and after the period of interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 8-3 Under scenarios of rising GHG payments, forest and agriculture mitigation action may be delayed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-6 GHG incentives reduce net emissions from the forest and agriculture sectors below baseline levels. If the incentives are strong enough, the joint sectors could move from a net emissions source to a sink. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-6 Leakage potential from limiting included mitigation activities may be largely confined to the forest sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-7 Raising GHG mitigation levels in forestry and agriculture can cause environmental co-effects, both good and bad. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-8 Payment method will determine efficiency of mitigation activities. . . . . . . . . . . . . . . . . . . . . 8-8 If outreach is needed to deliver GHG mitigation, these efforts might focus in regions with the largest mitigation potential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9 9. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-1 GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE vi

List of Tables, Figures, and Boxes Tables Table 2-1: Representative Carbon Sequestration Rates and Saturation Periods for Key Agriculture, Land-Use Change, and Forestry Practices . . . . . . . . . . . . . . . . . . . . . 2-3 Table 2-2: Agricultural Non-CO2 Emissions by Source, 2003 (Tg CO2 Eq.). . . . . . . . . . . . . . . . . . . . . 2-7 Table 3-1: FASOMGHG Model: Key Dimensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-3 Table 3-2: FASOMGHG Regional Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-5 Table 3-3: Agriculture-Sector Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8 Table 3-4: GHG Emission Sources and Sinks in FASOMGHG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-11 Table 3-5: Broad GHG Mitigation Strategies Covered in FASOMGHG. . . . . . . . . . . . . . . . . . . . . . . 3-13 Table 3-6: Mitigation Options Not Explicitly Captured in FASOMGHG. . . . . . . . . . . . . . . . . . . . . . 3-14 Table 3-7: U.S. Land-Use Change for Major Categories: 1982���1997 . . . . . . . . . . . . . . . . . . . . . . . . . . 3-16 Table 3-8: Baseline Forest and Agriculture GHG Net Annual Emissions by Activity and Decade for the United States: FASOMGHG Model: 2010���2050 . . . . . . . . . . . . . . . . 3-18 Table 3-9: Net Annual CO2 Flux from U.S. Forest Carbon Stocks: 1990 and 2000, EPA Inventory Quantities (in Tg CO2 per year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-20 Table 3-10: Projected Net CO2 Flux from U.S. Forest Carbon Stocks: 1990���2040, USDA Forest Service Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-20 Table 3-11: Non-CO2 GHG Emissions from Agriculture (Tg CO2 Eq.): EPA GHG Inventory, 1990���2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-23 Table 4-1: Core Price Scenarios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3 Table 4-2: CO2 and C Price Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3 Table 4-3: Acreage Converted from Conventional Tillage to Reduced Tillage under Baseline and GHG Prices: U.S. Total (Million acres) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7 Table 4-4: Comparison of Annualized GHG Mitigation Estimates (Tg CO2 Eq. per year) across Alternative Time Horizons at a GHG Price of $15/t CO2 Eq. . . . . . . . . . . . . . . . . 4-11 Table 4-5: National GHG Mitigation Totals by Activity: Annualized Averages, 2010���2110. . . . . . 4-12 Table 4-6: Top 10 Region-Activity Mitigation Combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-17 Table 4-7: Comparison of FASOMGHG Results in this Chapter to Range of Estimates from Richards and Stokes��� (2004) Review Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-21 GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE vii

Table 4-8: Comparison of FASOMGHG Results in this Chapter to Stavins��� (1999) Study. . . . . . . 4-22 Table 4-9: Comparison of FASOMGHG Forest Carbon Sequestration Results in this Chapter with Sedjo, Sohngen, and Mendelsohn (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-23 Table 4-10: Comparison of this Study with Lewandrowski et al. (2004) (USDA ERS) . . . . . . . . . . . 4-24 Table 4.A.1: Key Results at the National Level by Activity, Time Period, and Constant-Price Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-25 Table 4.A.2: Total Forest and Agricultural GHG Mitigation by Region . . . . . . . . . . . . . . . . . . . . . . . . . 4-26 Table 4.A.3: Forest and Agricultural GHG Mitigation by Activity, Region, and Price Scenario . . . 4-26 Table 4.A.4: Key Results at the National Level by Activity, Time Period, and Rising Price Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-28 Table 5-1: National GHG Mitigation Quantity Scenarios for 2025 and 2055 . . . . . . . . . . . . . . . . . . . 5-2 Table 5-2: National Mitigation, by Scenario and Activity, for Least-Cost Quantity in 2025 and 2055: Annualized over 2010���2110. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-3 Table 5-3: Least-Cost Mitigation Response to Fixed National GHG Mitigation Levels in 2015, 2025, and 2055 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6 Table 5-4: GHG Mitigation Quantity Ranking by Region/Activity Combination: Fixed National Mitigation Quantity Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-7 Table 5-5: Mitigation Quantities: Payments for CO2 Only vs. Payment for All GHGs ($15 per t CO2 Eq.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8 Table 5-6: National GHG Mitigation Totals in Key Years by Activity: Payment for CO2 Only at $15/t CO2 Eq. (Includes Non-CO2 GHGs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-9 Table 5-7: Selected Activity Scenarios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-10 Table 5-8: GHG Mitigation under Payment for Specific Activity Scenarios . . . . . . . . . . . . . . . . . . . 5-11 Table 6-1: Candidate Approaches for Accounting for Reversal Risk from Carbon-Based GHG Mitigation Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-4 Table 6-2: Leakage Estimates by Mitigation Activity at a GHG Price of $15/t CO2 Eq. . . . . . . . . . . 6-6 Table 6-3: Afforestation Regional Leakage Estimates from Murray et al. (2004). . . . . . . . . . . . . . . . 6-9 Table 6-4: Forest Preservation and Avoided Deforestation Regional Leakage Results from Murray et al. (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-9 Table 6-5: Implementation Issues for Selected Activities and Projects: Leakage Estimates from FASOMGHG and MMV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-14 GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE viii

Table 6-6: Qualitative Consideration of Implementation Issues for Selected Activities and Projects: Baselines, Additionality, and Reversal Risk . . . . . . . . . . . . . . . . . . . . . . . . . 6-15 Table 6-7: Per-Acre vs. Per-Tonne Payment Approaches for Afforestation: 2015 and 2010���2110 Annualized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-16 Table 6-8: Agricultural Soil Carbon Sequestration Payment Approaches: 2015 and 2010���2110 Annualized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-18 Table 7-1: Land Use under the Baseline, $15, and $50 (Constant) GHG Price Scenarios: 2015 and 2055 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2 Table 7-2: Change in Pollutant Loadings for Selected Agricultural Pollutants and the WQI for the $6.80 per tonne CO2 Eq. Scenario, using the ASMGHG-NWPCAM Model Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-10 Table 8-1: Characteristics of GHG Mitigation Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-4 Table 8-2: Potential Implications of Mitigation Level and Time Frame . . . . . . . . . . . . . . . . . . . . . . . . 8-4 Table 8-3: Leakage Estimates by Mitigation Activity at a GHG Price of $15/t CO2 Eq. . . . . . . . . . . . 8-7 Figures Figure 1-1: Forestry and Agriculture Net Contribution to GHG Emissions in the United States, 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2 Figure 2-2: Conceptual Model of Soil Organic Matter Decomposition and Accumulation Figure 2-3: Absolute Change in the Annual Rate of Carbon Sequestered Following a Figure 2-1: Agricultural Non-CO2 Emissions by Source Relative to All Other GHG Emissions . . . 2-7 Following Disturbance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10 Change from Conventional Tillage (CT) to No-Till (NT) . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11 Figure 2-4: Carbon Accumulation on an Afforested Stand to Saturation . . . . . . . . . . . . . . . . . . . . . . 2-11 Figure 2-5: Cumulative Carbon Changes for a Scenario Involving Afforestation and Harvest . . . 2-12 Figure 3-1: FASOMGHG Regions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-5 Figure 3-2: FASOMGHG Market Linkages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-10 Figure 3-3: Cumulative Carbon Changes for a Scenario Involving Afforestation and Harvest . . . 3-12 Figure 3-4: Baseline Land-Use Projections, FASOMGHG: 2010���2050 (Million acres) . . . . . . . . . . 3-15 Figure 3-5: Total Factor Productivity in U.S. Agriculture: 1949���1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 3-17 Figure 3-6: Forest and Agriculture Products Price Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-17 GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE ix

Figure 3-7: Comparison of Projected Baseline Carbon Sequestration Trends in U.S. Forests: FASOMGHG vs. USDA Forest Service Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-21 Figure 3-8: Comparison of Projected Baseline Non-CO2 GHG: FASOMGHG vs. Scheehle and Kruger (in press) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-23 Figure 4-1: Price Trajectories for Rising-Price Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-4 Figure 4-2: Land Use in 2025 at Different GHG Price Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-6 Figure 4-3: Timberland Area over Time: $50/t CO2 Eq. vs. Baseline . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-6 Figure 4-4: Effect of GHG Prices on Forest Management Variables, 2015 . . . . . . . . . . . . . . . . . . . . . . . 4-8 Figure 4-5: National GHG Mitigation at Representative Years by Price (2015, 2025, and 2055) . . . . 4-8 Figure 4-6: Cumulative GHG Mitigation over Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-9 Figure 4-7: Comparison of Actual, Cumulative Average, and Annualized GHG Mitigation Value Calculations at $15/t CO2 Eq.: 2010���2110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-11 Figure 4-8: GHG Mitigation Supply Function from National GHG Mitigation Totals by Activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-12 Figure 4-9: Model Sensitivity to Saturation Period toward a New Soil Carbon Equilibrium from Tillage Change: GHG Price = $15/t CO2 Eq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-15 Figure 4-10: Sensitivity of Model Results to Assumed Biofuel Demand Restrictions: GHG Price = $30/t CO2 Eq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-15 Figure 4-11: Total Forest and Agriculture GHG Mitigation by Region . . . . . . . . . . . . . . . . . . . . . . . . . 4-16 Figure 4-12: Pollutant Loading Effects Over Time of a $15/t CO2 Eq. GHG Price . . . . . . . . . . . . . . . . 4-18 Figure 4-13: Constant-Price Scenarios vs. Rising-Price Scenarios and GHG Mitigation . . . . . . . . . . 4-19 Figure 4-14: Cumulative GHG Mitigation over Time: $3/t CO2 Price Rising at Two Rates . . . . . . . . 4-20 Figure 4-15: Cumulative GHG Mitigation over Time: $20/t CO2 Price Rising by $1.30 per Year ($75 cap) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-20 Figure 5-1: Least-Cost Mitigation Quantities by Scenario and Activity in 2025 and 2055. . . . . . . . . 5-3 Figure 5-2: Scenarios with Objective of Mitigating: (a) 375 Tg CO2 Eq. in 2025 and Maintaining (b) 375 in 2025 and 900 Tg CO2 Eq. in 2055 and (c) 375 Tg CO2 Eq. in 2025 without Maintaining Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-5 Figure 5-3: Cumulative Mitigation: Payment for CO2 Only (Includes Non-CO2 GHGs) vs. All GHGs at $15/t CO2 Eq.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-10 Figure 5-4: GHG Mitigation under Payments for Afforestation and Forest Management Only at $15/t CO2 Eq.: By Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-12 GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE x

Figure 5-5: GHG Mitigation under Payments for Biofuel Offsets Only at $3/t CO2 Eq., Rising at 4 Percent per Year, By Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-13 Figure 5-6: GHG Mitigation by Region and Activity under Payments for Agricultural Management Only: $15/t CO2 Eq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-13 Figure 5-7: Regional Distribution of Soil Carbon Sequestration under Payment for Soil Carbon Only: $15/t CO2 Eq. Constant Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-14 Figure 6-1: Regional Leakage Flows for Afforestation-Only Payment Scenario: $15/t CO2 Eq. . . . . 6-8 Figure 6-2: Regional Shares of Afforestation Carbon Sequestration by Payment Approach . . . . . 6-17 Figure 6-3: Regional Shares of Agricultural Soil Carbon Sequestration by Payment Approach . . 6-18 Figure 7-1a: Land-Use Allocation by Eastern U.S. Regions in 2015: Baseline and the $15 and $50 Constant GHG Price Scenarios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-3 Figure 7-1b: Land-Use Allocation by Eastern U.S. Regions in 2055: Baseline and the $15 and $50 Constant GHG Price Scenarios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-3 Figure 7-2a: Land-Use Allocation by Western U.S. Regions in 2015: Baseline and the $15 and $50 Constant GHG Price Scenarios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-4 Figure 7-2b: Land-Use Allocation by Western U.S. Regions in 2055: Baseline and the $15 and $50 Constant GHG Price Scenarios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-4 Figure 7-3: Soil Erosion Index over Time by (Constant) GHG Price Scenario (Baseline = 100) . . . . 7-6 Figure 7-4: Phosphorous Loading Index over Time by (Constant) GHG Price Scenario (Baseline = 100) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-7 Figure 7-5: Nitrogen Runoff Index over Time by (Constant) GHG Price Scenario (Baseline = 100) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-8 Figure 7-6: Pesticide Index over Time by (Constant) GHG Price Scenario (Baseline = 100) . . . . . . . 7-8 Figure 7-7: Changes in Water Quality from Soil Carbon Sequestration and Other Agricultural Management Changes under $6.8 per Tonne CO2 Scenario in ca. 2020, using the ASMGHG-NWPCAM Integrated Agriculture Water Quality Model. . . . . . . . . . . . . . . 7-10 Figure 8-1: National GHG Mitigation at Three Focus Dates by GHG Price: Average Annual . . . . . 8-2 Figure 8-2: Cumulative GHG Mitigation in Tg CO2 Eq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-3 Figure 8-3: Responses to Set Mitigation Quantities: Cumulative Mitigation to 2100 . . . . . . . . . . . . . 8-5 Figure 8-4: Constant Price Scenarios vs. Rising Price Scenarios and GHG Mitigation . . . . . . . . . . . 8-6 Figure 8-5: Cumulative Net Emissions/Sinks for Forestry and Agriculture: Comparison of Baseline and Comprehensive Mitigation Scenarios at Constant Prices over Time . . . . 8-7 GREENHOUSE GAS MITIGATION POTENTIAL IN U.S. FORESTRY AND AGRICULTURE xi