Options to overcome the barriers to pricing European agricultural emissions

Although agriculture could contribute substantially to European emission reductions, its mitigation potential lies untapped and dormant. Market-based instruments could be pivotal in incentivizing cost-effective abatement. However, sector specificities in transaction costs, leakage risks and distributional impacts impede its implementation. The significance of such barriers critically hinges on the dimensions of policy design. This article synthesizes the work on emissions pricing in agriculture together with the literature on the design of market-based instruments. To structure the discussion, an options space is suggested to map policy options, focusing on three key dimensions of policy design. More specifically, it examines the role of policy coverage, instruments and transfers to farmers in overcoming the barriers. First, the results show that a significant proportion of agricultural emissions and mitigation potential could be covered by a policy targeting large farms and few emission sources, thereby reducing transaction costs. Second, whether an instrument is voluntary or mandatory influences distributional outcomes and leakage. Voluntary instruments can mitigate distributional concerns and leakage risks but can lead to subsidy lock-in and carbon price distortion. Third, the impact on transfers resulting from the interaction of the Common Agricultural Policy (CAP) with emissions pricing will play a key role in shaping political feasibility and has so far been underappreciated.

POLICY RELEVANCE

Following the 2015 Paris Agreement, European climate policy is at a crossroads. Achieving cost-effectively the 2030 and 2050 European targets requires all sectors to reduce their emissions. Yet, the cornerstone of European climate policy, the European Union Emissions Trading System (EU ETS), covers only about half of European emissions. Major sectors have been so far largely exempted from carbon pricing, in particular transport and agriculture. While transport has been increasingly under the spotlight as a possible candidate for an EU ETS sectoral expansion, policy discussions on pricing agricultural emissions have been virtually absent. This article attempts to fill this gap by investigating options for market-based instruments to reduce agricultural emissions while taking barriers to implementation into account.     

Escaping the climate policy uncertainty trap: options contracts for REDD+

Climate policy uncertainty significantly hinders investments in low-carbon technologies, and the global community is behind schedule to curb carbon emissions. Strong actions will be necessary to limit the increase in global temperatures, and continued delays create risks of escalating climate change damages and future policy costs. These risks are system-wide, long-term and large-scale and thus hard to diversify across firms. Because of its unique scale, cost structure and near-term availability, Reducing Emissions from Deforestation and forest Degradation in developing countries (REDD+) has significant potential to help manage climate policy risks and facilitate the transition to lower greenhouse gas emissions. ‘Call’ options contracts in the form of the right but not the obligation to buy high-quality emissions reduction credits from jurisdictional REDD+ programmes at a predetermined price per ton of CO₂ could help unlock this potential despite the current lack of carbon markets that accept REDD+ for compliance. This approach could provide a globally important cost-containment mechanism and insurance for firms against higher future carbon prices, while channelling finance to avoid deforestation until policy uncertainties decline and carbon markets scale up.

Key policy insights

• Climate policy uncertainty discourages abatement investments, exposing firms to an escalating systemic risk of future rapid increases in emission control expenditures.

• This situation poses a risk of an abatement ‘short squeeze,’ paralleling the case in financial markets when prices jump sharply as investors rush to square accounts on an investment they have sold ‘short’, one they have bet against and promised to repay later in anticipation of falling prices.

• There is likely to be a willingness to pay for mechanisms that hedge the risks of abruptly rising carbon prices, in particular for ‘call’ options, the right but not the obligation to buy high-quality emissions reduction credits at a predetermined price, due to the significantly lower upfront capital expenditure compared to other hedging alternatives.

• Establishing rules as soon as possible for compliance market acceptance of high-quality emissions reductions credits from REDD+ would facilitate REDD+ transactions, including via options-based contracts, which could help fill the gap of uncertain climate policies in the short and medium term.

     

Mesocosm experiments identifying hotspots of groundwater upwelling in a water column by fibre optic distributed temperature sensing

Lacustrine groundwater discharge (LGD) can substantially impact ecosystem characteristics and functions. Fibre optic distributed temperature sensing (FO‐DTS) has been successfully used to locate groundwater discharge into lakes and rivers at the sediment–water interface, but locating groundwater discharge would be easier if it could be detected from the more accessible water surface. So far, it is not clear if how and under which conditions the LGD signal propagates through the water column to the water surface–atmosphere interface, and what perturbations and signal losses occur along this pathway. In the present study, LGD was simulated in a mesocosm experiment. Under winter conditions, water with temperatures of 14 to 16 °C was discharged at the bottom of a 10 × 2.8‐m mesocosm. Water within this mesocosm ranged from 4.0 to 7.4 °C. Four layers (20, 40, 60, and 80 cm above the sediment) of the 82 cm deep mesocosm were equipped with FO‐DTS for tracing thermal patterns in the mesocosm. Aims are (a) to test whether the positive buoyancy of relatively warm groundwater imported by LGD into shallow water bodies allows detection of LGD at the lake's water surface–atmosphere interface by FO‐DTS, (b) to analyse the propagation of the temperature signal from the sediment‐water interface through the water column, and (c) to learn more about detectability of the signal under different discharge rates and weather conditions. The experiments supported the benchmarking of scale dependencies and robustness of FO‐DTS applications for measuring upwelling into aquatic environments and revealed that weather conditions can have important impacts on the detection of upwelling at water surface–atmosphere interfaces at larger scales.     

Proglacial groundwater storage dynamics under climate change and glacier retreat

Proglacial aquifers are an important water store in glacierised mountain catchments that supplement meltwater-fed river flows and support freshwater ecosystems. Climate change and glacier retreat will perturb water storage in these aquifers, yet the climate-glacier-groundwater response cascade has rarely been studied and remains poorly understood. This study implements an integrated modelling approach that combines distributed glacio-hydrological and groundwater models with climate change projections to evaluate the evolution of groundwater storage dynamics and surface-groundwater exchanges in a temperate, glacierised catchment in Iceland. Focused infiltration along the meltwater-fed Virkisá River channel is found to be an important source of groundwater recharge and is projected to provide 14%–20% of total groundwater recharge by the 2080s. The simulations highlight a mechanism by which glacier retreat could inhibit river recharge in the future due to the loss of diurnal melt cycling in the runoff hydrograph. However, the evolution of proglacial groundwater level dynamics show considerable resilience to changes in river recharge and, instead, are driven by changes in the magnitude and seasonal timing of diffuse recharge from year-round rainfall. The majority of scenarios simulate an overall reduction in groundwater levels with a maximum 30-day average groundwater level reduction of 1 m. The simulations replicate observational studies of baseflow to the river, where up to 15% of the 30-day average river flow comes from groundwater outside of the melt season. This is forecast to reduce to 3%–8% by the 2080s due to increased contributions from rainfall and meltwater runoff. During the melt season, groundwater will continue to contribute 1%–3% of river flow despite significant reductions in meltwater runoff inputs. Therefore it is concluded that, in the proglacial region, groundwater will continue to provide only limited buffering of river flows as the glacier retreats.     

Modeling core-scale permeability anisotropy in highly bioturbated “tight oil” reservoir rocks

A high-resolution simulation model of a heterogeneous low-permeability rock sample is used to investigate the effects of physical and biogenic sedimentary structures on scaling and anisotropy of absolute permeability at the core scale. Several simulation sub-samples with random locations and volumes were also selected for evaluation of the effects of scale and lithological composition on the calculated permeability. Vertical and horizontal permeability values (from whole core simulation) are in good agreement with routine core analysis (RCA) measurements from offsetting cores. Despite relatively good reservoir quality associated with geobodies of biogenic and relic bedding structures, results from the full diameter core simulation demonstrate that their limited volumetric abundance and restricted connectivity prevent these features from controlling fluid flow in these rocks. In fact, permeability seems to be dominated by the tighter encasing matrix, which exhibits average permeability values very close to those reported from RCA. Geometric averaging offers a better representation for the upscaling of horizontal permeability datasets; whereas, both geometric and harmonic averaging work similarly well for the vertical measurements. The methodology used in this work is particularly applicable to the detailed characterization of reservoir rocks with a high degree of heterogeneity caused by biological reworking and diagenesis.     

Behavior of arsenic and antimony in the surface freshwater reaches of a highly turbid estuary, the Gironde Estuary, France

This study reports on the behavior of two redox-sensitive elements, As and Sb, along the turbidity gradient in the freshwater reaches of the turbid Gironde Estuary. During a 17-month survey, surface water and suspended particulate matter (SPM) were sampled monthly at six sites representing both fluvial branches of the Gironde Estuary. Additionally, two longitudinal high resolution profiles were sampled along the fluvial estuary of the Garonne Branch during two contrasted seasons, i.e. with and without the presence of the maximum turbidity zone (MTZ). Seasonal variability and spatial distribution of dissolved (<0.2 μm; <0.02 μm) and particulate As, Sb and Fe were measured and combined with SPM data to understand metalloid behavior in the estuarine freshwater turbidity gradient.At the two main fluvial entries of the Gironde Estuary, dissolved As and Sb concentrations showed strong (by a factor of 2–4) seasonal variations, that were only partly controlled by discharge-related dilution. Seasonal addition of dissolved As and Sb was attributed to the degradation of particulate As and Sb carrier phases in bottom sediment and/or in the adjacent aquifers, rather than release from SPM. In the surface freshwater reaches of the Gironde Estuary, Sb behaved conservatively under all hydrological conditions. In contrast, As was strongly reactive in the presence of the MTZ, with opposite behaviors in the two fluvial branches of the estuary: in the Garonne Branch As was removed from the dissolved phase, whereas in the Dordogne Branch As was added. Redistribution of As between the dissolved and the particulate phases along the turbidity gradient in estuarine freshwater only affected the <0.02 μm fraction, as the 0.02–0.2 μm fraction remained constant (300 ng L⁻¹ in September 2005). Accordingly, As removal seemed to be decoupled from concomitant “colloidal” (0.02–0.2 μm) Fe flocculation in the turbidity gradient. The contrasting behavior of dissolved As in the fluvial estuaries of the Garonne and Dordogne Branches was attributed to sorption processes during equilibration of river-borne dissolved As with estuarine SPM forming the MTZ. This equilibrium, described by a distinct distribution coefficient K_d(As)  11,000 L kg⁻¹ in the MTZ, resulted in either As release (desorption; Dordogne Branch) or removal (adsorption; Garonne Branch) in the respective fluvial estuaries. A mixing experiment under controlled laboratory conditions tended to support that equilibration between the dissolved phase and MTZ particles may induce both As release and removal in the estuarine freshwater reaches, with As distribution evolving towards a distinct K_d value for increasing SPM concentrations. The long-term survey allowed estimating annual (2004) dissolved fluxes of As and, for the first time Sb, at the main fluvial entries of the Gironde Estuary at 30.7 t a⁻¹ and 3.2 t a⁻¹ (Garonne River) and at 8.0 t a⁻¹ and 2.3 t a⁻¹ (Dordogne River), respectively.     

Review on dating methods: Numerical dating in the quaternary geology of High Asia

Over the past few years, OSL and TCN datings of glacial material from High Asia have come into fashion. To this day, however, these techniques do not permit safe calibration. The intensity of the cosmic ray flux is being modulated by the solar and terrestrial magnetic fields and their secular fluctuations in the past. So far, these variations cannot be converted into the respective local TCN production rates for High Asia. We have reason to believe that the ages that are being calculated despite these uncertainties are generally overestimated. This assessment is supported by conventional radiocarbon dates and above all by the glacial chronology developed independently on the basis of the Quaternary geological method. The strongly emerging evidence for a much more extensive LGM glaciation of High Asia is, however, either being ignored or rejected by many authors, solely on the basis of the above-mentioned uncalibrated datings. This self-conceit based on the “dating fallacy”, as we call it, should be avoided since it goes decidedly against the standards of the scientific method established in Quaternary geology and makes a fundamental scientific discussion impossible.     

Using subsurface metazoan fauna to indicate groundwater–surface water interactions in the Nakdong River floodplain, South Korea

Hydrological interactions between surface water and groundwater (GW) can be described using hydrochemical and biological methods. Surface water–groundwater interactions and their effects on groundwater invertebrate communities were studied in the Nakdong River floodplain in South Korea. Furthermore, the GW-Fauna-Index, a promising new index for assessing the strength of surface-water influence on groundwater, was tested. The influence of surface water on groundwater decreased with increasing depth and distance from the river. While hydrochemistry prevailingly reflected the origin of the waters in the study area (i.e. whether alluvial or from adjacent rock), faunal communities seemed to display an affinity to surface-water intrusion. Fauna reacted quickly to changes in hydrology, and temporal changes in faunal community structure were significantly linked to the hydrological situation in the floodplain. The metazoan faunal community and the GW-Fauna-Index allow a distinction between surface and subsurface waters with varying degrees of exchange. The results indicate that hydrological conditions are reflected by faunal assemblages on a high spatiotemporal resolution, and that surface-water intrusion can be estimated using the GW-Fauna-Index.     

Global change and the biogeochemistry of the North Sea: the possible role of phytoplankton and phytoplankton grazing

Phytoplankton plays a dominant role in shelf biogeochemistry by producing the major part of organic matter. Part of the organic matter will reach the sediment where diagenetic processes like denitrification, apatite formation or burial will remove nutrients from the biogeochemical cycle. In this article current knowledge on the decadal plankton variability in the North Sea is summarized and possible implications of these changes for the biogeochemistry of the North Sea are discussed. Most of the observed interdecadal dynamics seem to be linked to large-scale oceanographic and atmospheric processes. Prominent changes in the North Sea ecosystem have taken place around 1979 and 1988. In general, the phytoplankton color (CPRS indicator of phytoplankton biomass) reached minimum values during the end of the 1970s and has increased especially since the mid 1980s. Changes with a similar timing have been identified in many time series from the North Sea through the entire ecosystem and are sometimes referred to as regime shifts. It is suggested that the impact of global change on the local biogeochemistry is largely driven by the phyto- and zooplankton dynamics during spring and early summer. At that time the extent of zooplankton–phytoplankton interaction either allows that a large part of the new production is settling to the sediment, or that a significant part of the new production including the fixed nutrients is kept within the pelagic system. The origin of the extent of the phytoplankton–zooplankton interaction in spring is probably set in the previous autumn and winter. In coastal areas, both large-scale atmospheric and oceanographic changes as well as anthropogenic factors influence the long-term dynamics. Due to eutrophication, local primary production nowadays still is up to five times higher than during pre-industrial conditions, despite a decreasing trend. Recently, introduced species have strengthened the filter feeder component of coastal ecosystems. Especially in shallow coastal seas like the Wadden Sea, this will enhance particle retention, shift organic matter degradation to the benthic compartment and enhance nutrient removal from the biogeochemical cycle by denitrification or apatite formation.