Carbon trading schemes could play significant role in methane emissions reduction

The report presents EPA’s baseline forecast of methane emissions from the major anthropogenic sources in the US and gives the cost estimates of reducing these emissions. Emission estimates are given for 1990 through 1997 with projections for 2000 to 2020. The cost analysis is for 2000, 2010, and 2020.

The report proposes integrating the cost estimates for reducing methane emissions into economic analyses of US greenhouse gas (GHG) emission reductions to produce more comprehensive assessments of total GHG reductions. In this way, the report claims, the overall costs of reducing GHG emissions in the US could be reduced. If methane reductions are measured in terms of dollars per tonne of carbon equivalent (£/TCE), comparatively cheap methane reduction programmes could be substituted for costly carbon dioxide reduction schemes.

Despite the fact that the 2010 methane emission figures represent a 10 per cent increase over 1990 levels, the report points out that baseline forecasts exclude reductions associated with government programmes undertaken voluntarily by the sectors analysed. When these programmes – new technologies and management practices, for example – were taken into account, methane emissions are expected to remain below 1990 levels of 169.9 MTCE up to and including 2020.

The report estimates that up to 34.8 MTCE of reductions are possible in 2010 at energy market prices alone, ie. without any additional incentive in the form of payments for avoided emissions – measured in terms of dollars per tonne of carbon equivalent ($/TCE).

At higher emission reduction values, more reductions could be achieved. For example, EPA’s analysis indicates that with a value of $20/TCE for abated methane added to the energy market price, US reductions could reach 50.3 MTCE in 2010.

To make its emissions estimates, the EPA looked at the source industries in detail. Forecasts were based on factors such as consumption, prices, technological change and infrastructure.

The major methane emissions sources are: landfills, natural gas systems, coal mining, livestock manure management and enteric fermentation.

• For landfills – which accounts for 37 per cent of US anthropogenic methane emissions – the EPA found that baseline emissions are expected to decrease from 56.2 MTCE in 1990 to 52.0 MTCE in 2010 due to the Clean Air Act New Source Performance Standards and Emissions Guidelines (Landfill Rule). Using methane for electricity generation and as a fuel for use by a nearby end-user, EPA estimated that, in the absence of extra payments for avoiding emissions, about 21 per cent of baseline emissions could be captured and used cost-effectively in 2000. As the Landfill Rule takes effect, this figure decreases to 20 per cent in 2010. However, if landfill operators are paid an extra $30 for every ton of carbon equivalent of emissions avoided ($30/TCE), emissions could be reduced by 38 per cent from the baseline in 2000, and by 41 per cent in 2010. Emission reductions approach their maximum at $100/TCE in 2000 and $40/TCE in 2010.
• The report found that baseline methane emissions from the natural gas system during normal operations, maintenance and system upsets is expected to increase as natural gas consumption does. In 1990, emissions totalled about 32.9 MTCE. This figure rose to 33.5 MTCE in 1997, and is expected to reach 37.9 MTCE in 2010. EPA identified 118 technologies and practices that could help reduce these emissions and estimated that in 2000, 2010 and 2020 about 30 per cent could be avoided cost-effectively, based on the market value of the saved methane alone. When a value of $30/TCE is added to this, about 35 per cent of emissions can be reduced. At $100/TCE, about 40 per cent can be reduced.
• Coal mine methane emissions fell from 24.0 MTCE in 1990 to 18.8 MTCE by 1997, mainly due to reduced coal production at gassy mines and increased methane recovery. In 2010, baseline methane emissions will reach 28.0 MTCE due to growth in coal mining from deep mines. Using methane for natural gas and through catalytic oxidation technologies, EPA reports that 37 per cent of emissions from coal mines can be cost-effectively reduced at $0/TCE. Up to 71 per cent can be reduced at $30/TCE – or all the technically recoverable methane from this source.
• In 1990, emissions of methane from livestock stood at about 14.9MTCE. This figure had increased to 17.0 MTCE by 1997. Baseline emissions reach 22.3 MTCE by 2010 due to increases in total meat and dairy product consumption and increasing use of liquid waste management systems. Using anaerobic digestion technologies that capture methane to generate on-site electricity, emissions from livestock manure could be reduced in 2000 and 2010 by 14 per cent at current energy prices alone. With an additional $30/TCE, reductions reach 30 per cent in 2000, 31 per cent in 2010 and 32 per cent in 2020. At $100/TCE, emissions can be reduced by 63 per cent in 2000, 65 per cent in 2010 and 67 per cent in 2020.
• Methane emissions from livestock enteric fermentation will rise to 37.7 MTCE in 2020 from 34.1 MTCE in 1997 due to rising demand for US livestock products. These figures could be reduced using enhanced feeding and management practices. EPA did not quantify the costs and cost-effectiveness of these reductions in its report.