An output-based intensity approach for crediting greenhouse gas mitigation in agriculture: explanation and policy implications

Abstract

US legislators have recently proposed output-based emissions intensity metrics as an approach to credit greenhouse gas (GHG) offsets from agriculture and other uncapped sectors. This article explains the features and rationale of the output-based offset (OBO) approach, outlines a candidate accounting methodology, discusses the potential advantages and limitations of such an approach relative to the area-based offset (ABO) approach that is standard practice in some settings, and introduces possible policy implications. By incentivizing improvements in agricultural efficiency, the OBO approach strives to achieve the dual goals of food security and climate change mitigation. It expands the toolkit for achieving reductions in agricultural emissions, rewards technological advancement in both emission reductions and yields, and offers promise for addressing the problem of accounting for leakage. But because it is based on improvements in GHG efficiency in agriculture rather than on absolute reductions, emissions and climate risks could continue to rise while credits are being issued. An OBO approach might work best as a transitional strategy to address emissions from sectors or countries likely to remain outside a strict regulatory cap. Because it is the total atmospheric concentration of GHGs that creates the environmental threat of climate change, policies should ultimately focus not on the intensity of emissions but rather on their absolute levels.