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Estimating the potential CO2 mitigation from agricultural energy efficiency in the United States

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Abstract

Energy efficiency in agriculture is an underanalyzed aspect of a potential climate change mitigation strategy. According to the Fourth Assessment Report, experts report only medium agreement and medium evidence that energy efficiency can provide substantial reductions (Smith et al. 2007). This paper estimates the CO2 mitigation potential achievable through improvements in energy efficiency in the US agriculture sector. The data are presented in three formats: the cost data or break-even points of each technology, a marginal abatement supply curve expressed in terms of reduction in energy use by fuel category, and a marginal abatement supply curve expressed in terms of CO2 emission reductions by fuel category. The largest sources of energy use in the sector were identified as motors used in irrigation systems or other pumping operations; farm machinery such as tractors used in daily farm operations; and space conditioning, such as HVAC systems for livestock and crop-drying systems.

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Notes

  1. As we discuss in the section “Heterogeneity within mitigation options”, a distribution of operating hours is applied to each mitigation option to simulate the variation in applications and operating conditions that drive unique investment decisions. Thus, for example, we assume that units operating the largest number of hours, and hence having the greatest potential energy savings, are likely to adopt these high-efficiency technologies and will already be incorporated into the baseline trend in energy efficiency. Brown and Elliott (2005a) assumed a market penetration of 20% when evaluating potential energy efficiency gains in the US agricultural industry.

  2. The price premium estimate was developed by looking at 2008 MSRP values for the standard gas and analogous hybrid model of seven personal vehicles that included five SUVs and two passenger cars (Ford Escape, Honda Civic, Toyota Highlander, Mazda Tribute, Lexus RX 300/400, Camry, and Saturn Aura). MSRP values were obtained from Edmunds.com online database.

  3. Prices for John Deer tractor models 8420 (standard) and 8430 (high efficiency) were obtained from IRON Search.com online database. Prices represent a national average based on the stock of tractors included in the database.

  4. Dryer capacity was converted from bushels of corn using a conversion factor of 0.0254tonnes/bushel.

  5. Less the top 20% of units that are assumed to have already adopted the high-efficiency option or are built into the technology change baseline.

  6. All other recurring operation and maintenance (O&M) costs other than energy costs are assumed to be the same for high-efficiency and standard efficiency equipment; thus, maintenance costs do not appear in the break-even equation.

  7. Based on a conversion factor of 0.147GJ of diesel fuel (or 0.139million Btus per gallon).

  8. The break-even price is defined as the carbon price that equates to NPV of the investment equal to zero. Note that in the energy efficiency curves, any carbon tax or cost of carbon credits would be included in the price of energy. In the MAC analysis, the price of energy is fixed, and the cost of carbon is included in the break-even price.

  9. See Pagoulatos and Blackwell (1996) and Perrin (1972) for an overview of the asset replacement literature.

  10. Our analysis differs from some of the literature in that we are modeling the complete retirement of equipment as opposed to resale in a secondary market (where it would still be operating but with a new owner). As a result, we assume that its existing (scrap) value is minimal, and it is not included in the analysis.

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Authors and Affiliations

  1. RTI International, 3040 Cornwallis Rd, P.O. Box 12194, Research Triangle Park, NC, 27709, USA

    Michael Gallaher, Katherine Delhotal & Jeffrey Petrusa

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  1. Michael Gallaher
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  2. Katherine Delhotal
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  3. Jeffrey Petrusa
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Correspondence to Michael Gallaher.

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For special issue in the journal Energy Efficiency: Energy Efficiency: How Far Does It Get Us in Controlling Climate Change?

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Gallaher, M., Delhotal, K. & Petrusa, J. Estimating the potential CO2 mitigation from agricultural energy efficiency in the United States. Energy Efficiency 2, 207–220 (2009). https://doi.org/10.1007/s12053-008-9039-1

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