In yesterday’s installment, ClimateIntel discussed California’s draft Low Carbon Fuel Standard (LCFS), which is designed to reduce greenhouse gas emissions in the state by over 16 million metric tons by 2020-nearly 10% of the total reduction goals set by the state. In the draft proposal, California Air Resources Board (CARB) staff set forth an analytical means of calculating relative “carbon intensity” of the competing fuelstocks.  As part of that analysis, CARB staff included a factor for “indirect land use changes” (ILUC). The logic for considering ILUC is that if increased production of a specific type of biofuel in the United States causes a shift in land use, the immediate and future GHG emissions resulting from that land use change should be included in the life-cycle GHG emissions for that biofuel.  The theory for including indirect effects in measure of carbon intensity is generally not controversial.  Difficulties arise, however, when the theory is put into practice.

The debate with respect to the CARB draft proposal centers on the indirect effects of increased demand for certainly biologically-derived fuels and the resulting change in land-use patterns, both locally and globally.  As the report states, “A land use change effect is initially triggered by a significant increase in the demand for a cop-based biofuel.”  That increase demand changes the market dynamics for that particular crop, stimulating increased production, which, “if [it] takes place on land formerly in non-agricultural uses,” results in land use change impacts, such as “the carbon released to the atmosphere from the lost cover vegetation and disturbed soils in the periods following the land use conversion.”

When these land use changes are taken into account, as some studies show, total emissions from biofuels are significantly higher, calling in to question their effectiveness as a barrier to further climate change. This assertion, however, has been fiercely debated, as it requires a number of assumptions about how supply and demand dynamics affect land use, and what practices are used in the production of crops for fuel stocks.

The crux of the debate seems to derive from the notion that many factors drive land use changes.  Other factors that influence land use changes includes urbanization, economic growth that drives demand for land-based food, population growth, feed and fiber production, and extracting lumber or mineral resources.  Perhaps even more important, the modeling of indirect effects should consider the different and rapidly evolving land use policies of the United States and other nations.  The land use impacts of these factors are difficult to quantify and there is considerable uncertainty about predicting their future magnitude and effects.  

In California, the LCFS is determined by examining the carbon intensity of various fuels. When examining corn and sugarcane based biofuels, the analysis included emissions due to indirect effects-to the dismay of some researchers and biofuel executives, who argue in a letter to the California Air Resources Board that the land use analysis is over sensitive and weighted against crop-based fuelstocks.

With indirect land use change included in the analysis, three production methods for creating ethanol (called “pathways” in the report) had comparable or higher emissions than traditional fuels. All three were produced with Midwestern corn stock, though the bulk of their emissions came from direct effects, such as the transport of the products into California.

Actions in California may provide a template for national action: the U.S. Environmental Protection Agency (EPA) has also proposed to consider these indirect land use changes in its national Renewable Fuel Standard, though it has not yet decided how to make those calculations. As with the decision by the state of California, EPA’s decision has also engendered both criticism and praise.

For further information about this topic, please contact Akin Gump.