Comment Log Display

April 22, 2009

California Air Resources Board
Headquarters Building
Sacramento, CA 95812

REF: Significant uncertainty surrounds Indirect Land-Use Change
(ILUC) estimates; therefore ILUC factors should be excluded until
better data and documentation are available and scientifically
peer-reviewed

Dear Board Members:

We applaud your pioneering efforts to establish a LCFS and support
your initiatives to reduce emissions and improve welfare for
present and future citizens. 

We are writing to recommend that CARB reconsider the proposal to
include indirect carbon emissions from land-use change (or Indirect
Land-Use Change – ILUC – factors) in the Low Carbon Fuel Standard
(LCFS) rule. A delay in adopting the ILUC component of the proposal
for GHG emission calculation is warranted because current ILUC
emission factors are theoretical estimates rather than
science-based calculations and inclusion runs the risk of
undermining a very important initiative. 

The ILUC estimates carry significant uncertainty because they are
based on:  (a) a model that was never validated or calibrated for
the purpose of estimating land-use change; (b) input data for land
use with degrees of uncertainty much larger in magnitude than the
changes modeled, casting considerable doubt on the validity of
results; (c) one set of modeling results when the same model
produced wide-ranging results for indirect land-use change in
response to minor adjustments in assumptions and inputs (and there
is ongoing debate surrounding the accuracy and validity of many of
those assumptions, factors and inputs) as documented in the papers
published on the GTAP website and for CARB in the past 24 months;
and (d) a hypothesis for indirect land-use change that does not
meet the “rules of reason” tests established in US courts for
indirect environmental impacts, exposing the LCFS rule to
potentially serious implementation obstacles that could be avoided
if the ILUC component were postponed until better data and
analytical tools are developed. 

Our examination of the land use and economic models show that
there is not currently any accepted approach for calculating
indirect land-use change impacts from U.S. biofuel production and
policy.  Mr. Oladosu (co-author of this comment letter) is an
economist who has worked with the GTAP and other global equilibrium
models. GTAP has not been calibrated or validated for making
land-use change estimates. The GTAP modeling assumptions used to
estimate ILUC do not come close to reflecting the conditions and
forces that prevail in the areas where impacts are estimated to
occur. Baseline land-cover and land-use data and other underlying
assumptions for the modeling carry huge uncertainties, yet these
uncertain inputs determine the results. The sensitivity of results
is illustrated in part by the wide range of ILUC results reported
among the GTAP reports issued on this topic in 2008 and 2009.

Several US Court decisions have considered if and when indirect
environmental impacts need to be incorporated under proposed
government projects. The decisions can be assembled under “rules of
reason” that help determine when indirect impacts should be
incorporated. The basic question is, “Are the impacts (indirect
land use change effects, in this case) reasonably certain to occur
as a result of proposed action, or is the estimate (of ILUC) based
on speculation?”  There is a lack of consensus on this issue in the
scientific community. But, several considerations from past court
cases may help answer the “rule of reason” question: 

(a)	Are estimated ILUC impacts speculative within the context of
all the other events, circumstances and contingencies that exist to
enable the effect (e.g. deforestation)?
(b)	Is the impact (loss of natural habitat/deforestation)
inevitable, independent of the proposed action and the theorized
indirect impacts?  
(c)	Does the “precautionary principle” clearly favor one proposed
action over another? (e.g. What are the impacts on land use change
and deforestation if less biofuels are accepted under LCFS due to
the assumed ILUC factors?)
(d)	Is the estimated impact increasingly tenuous as inquiry
extends outward from the core project area?
(e)	If there is a “reasonably foreseeable” indirect impact, does
it occur in a remote locale that is not under direct U.S. control?
(f)	What is the “legally relevant cause” of the impact? (Is the
ILUC impact isolated from the proposed action?)

When a reasonable person asks these questions, can it be concluded
that the estimated indirect impacts are caused by the proposed
action? In the case of the California LCFS, rather than include
ILUC factors at this time as proposed, we recommend that a more
prudent approach would be to identify these as possible indirect
impacts and recommend mitigations to limit the likelihood of
negative effects. Such mitigations could include adherence to
sustainable production standards that are developed and monitored
by third parties.

Keith Kline (co-author of this comment letter) has spent over
twenty years, the majority of his professional career, working on
international programs to protect biodiversity, promote sustainable
development and reduce deforestation. In that capacity, Mr. Kline
witnessed tremendous land conversion impacts, direct and indirect,
of oil and gas exploration activities in developing nations. These
are driven by world demand for petroleum products but are
overlooked in the proposed CARB rule. Such resource extraction
activities may very well be among the most significant factors
contributing to the accelerated loss of natural habitat in the
remaining forest zones of our planet. 

We have also witnessed “market-mediated” impacts in forest
frontier zones of developing nations and found that improved prices
and expanded market options for products, as expected under biofuel
policies, reduce pressures for deforestation and provide tools and
incentives to promote more sustainable land use. 

In sum, the market-mediated land-use change impacts hypothesized
by GTAP and similar economic models are not merely inaccurate
estimates; they may indeed be the opposite to what could be
expected in the real world, particularly when one looks at first
time forest conversion and biofuel production backed by incentives
for sustainable production, environmental legislation and
enforcement. More research is needed to better understand the
interactions among these factors, going beyond theories, to
calibrate and validate models that reflect how behavior is
impacted, and to better quantify the degree and direction of
impacts from biofuels. 

Sincerely, 

Keith Kline and 
Gbadebo Oladosu