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Work package 2B Agriculture and water Deliverable 2B1: Report review of the literature Project: ClimateCost Project full title: Full Costs of Climate Change Grant agreement no.: 212774, collaborative project Proposal/Contract no.: ENV.2007.1.1.6.1. Start date of project: 01/01/09 Participants Ana Iglesias, Luis Garrote, Sonia Quiroga Universidad Politecnica de Madrid, Spain Date: 17/07/2009 Duration: 32 months ClimateCost – WP2B – D1 Title: Deliverable 2B1: Report review of the literature Purpose: Filename: Deliverable 2_1B vs 1.doc Date: July 2009 Authors: Ana Iglesias, Luis Garrote, Sonia Quiroga Document history: Status: Citation: Copyright: Copyright statement: Working paper number: ISBN: Project Coordinator: Thomas E Downing Stockholm Environment Institute, Oxford 266 Banbury Road, Suite 193 Oxford OX2 7DL, U.K. Tel: +44 1865 426316; Fax: +44 1865 421898 Mobile: +44 7968 065957 [email protected], www.sei.se/oxford Technical Coordinator: Paul Watkiss Paul Watkiss Associates [email protected] Tel +44 797 1049682 http://www.climatecost.cc/ ClimateCost – WP2B – D1 Table of Contents Introduction and Objectives.............................................................................................. 1 1 Objectives of WP2B ................................................................................................. 1 1.1 2 Objectives of deliverable D_2B1 .............................................................................................. 1 A review of previous studies .................................................................................... 2 Global impacts ......................................................................................................................................... 3 2.2 European wide impacts ............................................................................................................. 5 2.3 Synthesis of main impacts ....................................................................................................... 11 2.4 Monetary estimates.................................................................................................................. 19 2.5 Treatment of climate and socio-economic change .................................................................. 20 2.6 Disparities in the results .......................................................................................................... 20 3 A review of methods .............................................................................................. 21 3.1 3.2 3.3 3.4 3.5 3.6 4 Possible research strategy for ClimateCost ............................................................ 35 4.1 4.2 5 Approaches .............................................................................................................................. 21 Models ..................................................................................................................................... 22 Economic models .................................................................................................................... 26 Summary of methods............................................................................................................... 29 Treatment of adaptation........................................................................................................... 30 Treatment of sectoral inter-linkages ........................................................................................ 35 Planned methods of analysis for the ClimateCost study.......................................................... 35 Potential input to the integrated models and CGMs ................................................................ 40 References .............................................................................................................. 41 ClimateCost – WP2B – D1 Introduction and Objectives 1 Objectives of WP2B This work package focuses on agriculture and water resources. The general objective of WP 2B is to assess impacts from climate change on agriculture and water availability with and without adaptation. The physical impacts will be derived in detail from the scenarios of climate variability and change provided by WP1 for Europe. Possible impacts for China may be derived if climate scenarios and data for validation of the physical models are available. The results of the WP will generate the information for integrated assessment models and the economic models. The methodology will be an extension of the PESETA-Agriculture methodology, incorporating water availability and management and land use. The following aspects to be considered will be derived from the results of this Deliverable (literature review). The output from the task will aim to respond to policy questions related to vulnerability of regions and social groups, conflicts among water users and adequacy and revision of existing policy. The results will provide the quantitative estimation of agricultural production and water requirements to be used in the economic analysis; the water quantification of water availability for other sectors; evaluation of water requirements under climate and policy scenarios, the economic and environmental valuation of agricultural production and water. Deliverables: 1.1 2B1 Report Review of literature. Month 6. 2B2 Report Analysis for Europe (model ready). Month 15. 2B3 Report Analysis of impacts and adaptation for all scenarios and regions. Quantification of water requirement satisfaction across all sectors and evaluation of policy implications and scenarios (application of the model). Month 24. Objectives of deliverable D_2B1 This report aims to provide an improved understanding of the potential implications of climate change and adaptation options for agriculture and water for people. It also aims to assist policy to address the proprieties for adaptation. Following this section, this report includes a (section 2), a review of previous knowledge (section 3), a review of methods (section 4), an analysis of key issues (section 5), Finally, the key recommendations are presented in section 6. 1 ClimateCost – WP2B – D1 2 A review of previous studies Climatic conditions affect directly agriculture and water resources. Diseases and pest infestations over land and water are also weather-dependent. Societies, cultures and economies have evolved adapting to mean climatic conditions. The success of adaptation depends on the strategy, and it is determined by the economic, social, and environmental vulnerability. In regions of the world that are sensitive to climatic hazards -- droughts, floods, temperature extremes, storms, such as the Mediterranean, agricultural production varies largely and conflicts over water resources are common. In areas that concentrate activities of high economic value, the vulnerability to extreme events is high. Regardless of the coping strategy, climate extremes may have catastrophic consequences, particularly if such anomalies are not predicted. Climate is a main determinant of the productivity of the land and potential development of water resources. While aspects of climate change such as longer growing seasons and warmer temperatures may bring some benefits; there will also be a range of adverse impacts, including reduced water availability and more frequent extreme weather events. Agriculture has shown, throughout history, a great ability to adapt to changing conditions, with or without a conscious response by farmers. Water for people is always adapting to changes in society. However, it is likely that the changes imposed by climate change in the future and as expressed above will and have exceeded the limits of natural adaptation, thereby requiring policies to support and enable major changes in management. There have been several hundred studies into the potential impacts of climate change in water and agriculture. Studies have focussed on particular issues (e.g. soil erosion, biodiversity, and farm income), time-frames (e.g. 2020s, 2050s, and 2100), scenarios (e.g. SRES) and spatial scales (from local to global). Current knowledge about potential impacts is diverse and often fragmented. Below is a literature review that includes: 2 Global impacts: food production and irrigation water requirements European wide impacts: agricultural productivity Synthesis of main impacts Treatment of climate and socioeconomic change Disparities in the results ClimateCost – WP2B – D1 Global impacts 2.1.1 Impacts on food production Potential impacts of climate change on world food supply have been estimated in several studies (Parry et al., 2004). Results show that some regions may improve production, while others suffer yield losses. This could lead to shifts of agricultural production zones around the world. Furthermore, different crops will be affected differently, leading to the need for adaptation of supporting industries and markets. Climate change may alter the competitive position of countries with respect, for example, to exports of agricultural products. This may result from yields increasing as a result of altered climate in one country, whilst being reduced in another. The altered competitive position may not only affect exports, but also regional and farm-level income, rural employment and, of course, the type of crops grown in a region. While most studies are unlikely to include an analysis of competitiveness itself, it is possible to evaluate the relative position of a country by studying these analyses of climate change effects on global food trade. Indeed, some data on country-level output are available as part of the global studies. The combined model and scenario experiments demonstrate that the world, for the most part, appears to be able to continue to feed itself under the different climate and socio-economic scenarios during the rest of this century (Parry et al., 2004). However, this outcome is achieved through production in the developed countries (which mostly benefit from climate change) compensating for declines projected, for the most part, for developing nations. While global production appears stable, regional differences in crop production are likely to grow stronger through time, leading to a significant polarisation of effects, with substantial increases in prices and risk of hunger amongst the poorer nations, especially under scenarios of greater inequality. Although Figure 1 shows that global production appears stable (additional quantitative data are provided by Parry et al., 2004), regional differences in crop production are likely to grow stronger through time, leading to a significant polarization of effects, with substantial increases in prices and risk of hunger amongst the poorer nations. The most serious effects are at the margins (vulnerable regions and groups). Individuals particularly vulnerable to environmental change are those with relatively high exposures to changes, high sensitivities to changes, low coping and adaptive capacities, and low resilience and recovery potential. Adaptation is necessary, but adaptation has limits (technology and biotechnology, political and cultural). 3 ClimateCost – WP2B – D1 Figure 1 Percentage change in average crop yields for the HadCM2 climate change scenario. Source: Parry et al. (2004). 2.1.2 Impacts on water for irrigation In a warmer climate, irrigation water demand is expected to increase for most regions (Arnell, 1999). As shown in Figure 2, this increase is projected to be more pronounced in southern areas of Europe (Döll and Siebert, 2001). Simulations of the effects of climate change on the water balance at the European scale (Arnell, 1999) suggest that under most climate change scenarios, northern Europe would see an increase in annual average streamflow, but southern Europe would experience a reduction in streamflow. According to the IPCC (IPCC, 2007), the level of confidence of these projections is estimated to be medium to high. Therefore, greater water shortages and increased competition between agricultural and urban as well as industrial uses of water are expected mostly for southern areas of Europe. This may lead to increasing restrictions on irrigation in agriculture and horticulture for these regions. For these reasons, we have characterized the potential intensity of this climate change impact as high for southern Europe. 4 ClimateCost – WP2B – D1 Private adaptation options to these impacts include agronomic practices such as conservation tillage or irrigation management (Olesen and Bindi, 2002). Increased competition for scarce water resources may promote the introduction of more efficient irrigation systems (Abildtrup and Gylling, 2001). However, private coping capacity can be considered moderate for this climate change impact because, in most European regions, are highly dependent on the adaptation actions adopted by the hydrological sector, where public intervention continues to play a key role. Some authors have pointed out the need of reforming water markets to encourage a more prudent use of water (Olesen and Bindi, 2002). Figure 2 Relative change of annual net irrigation requirement between present time (1961–1990) and 2025 as a result of climate change (MPI climate scenario; areas equipped for irrigation in 1995 shown). Source: Döll and Siebert, 2001. 2.2 2.2.1 European wide impacts Agricultural productivity Figure 3 shows that relative changes in European agricultural production are advantageous for northern countries while the most serious negative effects are in southern countries. The effects of climate change and increased atmospheric carbon dioxide are expected to lead, overall, to small increases in European crop productivity at moderate warming. Yet within this macro scale, impacts on crop yields are expected to vary across Europe. In southern Europe, higher temperatures and droughts are projected to worsen conditions in a region already vulnerable to climate variability. Crop productivity will be negatively affected by reduced water supply and heat stress, and will be at risk from increased frequency of wildfires. In central and eastern Europe, summer rainfall is projected to decline leading to increased water stress. In northern Europe and Alpine regions, climate change is projected to bring mixed effects: initial benefits such as increased crop yields (at moderate levels of warming) are likely to be outweighed over time by more frequent flooding and increasing ground instability. Altered carbon and nitrogen cycles may affect soil erosion and water quality in all regions. 5 ClimateCost – WP2B – D1 Some lowland crops that are currently grown in southern Europe will become viable further north or at higher altitudes. Energy crops (such as oilseed rape, maize, etc), solid bio-fuel crops, starch crops and barley show a northward expansion in potential cropping area, but a reduction in the south. Importantly, the potential benefits from climate change will only be possible if water requirements are met. Rising temperatures are expected to increase the frequency of heat stress and the risk of disease in livestock. Severe heat stress will enhance the risk of mortality in intensive livestock systems, most notably for pigs and broiler chickens in northwest Europe. Warmer conditions will support the dispersal of disease-bearing insects (including new vectors currently limited by colder temperatures) and enhance the survival of viruses. The productivity of forage crops along the Atlantic coast may be reduced by drought such that availability is no longer sufficient for livestock feed at current demand. Figure 3 Crop yield changes under the HadCM3/HIRHAM A2 and B2 scenarios for the period 2071-2100 and for the ECHAM4/ RCA3 A2 and B2 scenarios for the period 20112040 compared to baseline (Iglesias et al., 2007; PESETA Project). 2.2.2 Risks and opportunities in the European agroclimatic regions This section summarizes the projected impact of climate change in the main European agro-climatic areas based on state-of-the art knowledge. A detailed regional analysis of the risks and opportunities for the farming sector arising from these expected impacts in each area is presented in the following section. 6 ClimateCost – WP2B – D1 Figure 3 Main agro-climatic zones in Europe (Source: Iglesias et al., 2007; PESETA) BOREAL Important changes in temperature and precipitation are expected. Temperature will increase considerably in these northern latitudes, especially in Finland, with very significant increases in yearly precipitation. Winters are projected to be much wetter increasing the risks of winter floods and flash floods. Intense precipitation and severe storms are also expected to become more frequent. There will be potential for cultivating new areas and crops due to much longer growing seasons. Yields could increase by 40%, under limited warming but agriculture could suffer from new pests and diseases. The warmer climate could aggravate the problems of water quality in the Baltic Sea. Permafrost changes due to warming will also be of particular concern for soils. ATLANTIC NORTH Temperature increases by 2080 are expected to be moderate at 1.5 - 2.5 °C, while total annual rainfall is expected to decrease slightly in the summer, but with an increased risk of flooding in winter (Reynard et al., 2001). There will be potential for increasing yields of forage crops due to longer growing seasons and for increasing the area sown to barley and potatoes (Holden et al., 2003). Impacts on crop yields due to warming may vary according to crop type but new pests and diseases may be introduced. ATLANTIC CENTRAL Temperature increases of 2.5 to 4 °C are forecast. Precipitation is expected to decrease in total, but with increased proportion of rainfall falling over winter. This greater intensity of winter precipitation and warmer temperatures are expected to increase the frequency of storms and flooding, especially as in this zone there are the confluences of several large rivers. Summers are projected to become dryer and hotter. The longer growing season is forecast to increase yields of wheat. There is also likely to be an increase in the northern range over which crops such as soya and sunflowers may be grown. The greatest problem to be faced by agriculture in this zone may be rising sea level which may affect low-lying land in eastern England and the North Sea coasts of Belgium, the Netherlands and Germany, some of the most 7 ClimateCost – WP2B – D1 productive agricultural areas in those countries. Reduced water resources during summer may lead to conflicting demands between agriculture and other users. ATLANTIC SOUTH Temperature increases of 3 to 4 °C are forecast, while yearly rainfall is expected to decrease, especially in the southern part of the zone. Water resources may be a problem leading to conflict with other users. A greater risk of forest fires has been identified in this area, and this may have impacts on adjacent areas of permanent crops. Despite the decrease on total water availability, winter flooding is predicted to increase (De Cunha et al., 2002). Crop yields are predicted to decrease by c. 14%. CONTINENTAL NORTH Annual mean temperature increases are forecast to be in the order of 3 to 4 °C. Total annual rainfall is expected to increase, with precipitation increases in the winter while reduction in summer could occur in several areas. The increased rainfall is predicted to lead to a greater number of intense rainfall events and to increase the risk of flooding, which may be particularly severe as this area has large areas of low-lying land vulnerable to flooding from rivers. A warmer climate may lead to an increase in the northern range over which crops such as soya, sunflowers may be grown and potential increases in yield from the longer growing season. CONTINENTAL SOUTH Significant temperature increases of 3 to 5 °C are forecast, while total annual rainfall is expected to decrease. Reduced precipitation is predicted to reduce yields of wheat and maize. However, yields of crops with a greater requirement for heat are forecast to increase. Reduced precipitation and the encroachment of agriculture are expected to lead to a reduction in the area of wetlands. Extreme weather events may increase in frequency. ALPINE Increases in extreme weather events will affect vulnerable mountain areas while any intensification of the hydrological cycle is likely to increase erosion, floods, and glacier retreat. An accelerated rate of glacier retreat has been observed in the last decade. This zone is vulnerable to accelerated permafrost thaw, which may lead to destabilization of soils and landslides. Increased temperatures are forecast to decrease the depth of snow cover and reduce biodiversity. The distribution of land use will change due as the distribution of species in mountainous areas may shift upwards. MEDITERRANEAN NORTH Decreases in crop yields up to 40% under current management conditions are forecast for much of this zone. In addition yield variability is also forecast to increase. A decrease in water availability is predicted together with an increase in water demand. Decreasing water resources in some areas may affect soil structure while reduced soil drainage may lead to increased salinity. However, an increase in frequency and intensity of floods is predicted in some areas where significant winter rainfall is likely. These changes are expected to reduce the diversity of Mediterranean species. 8 ClimateCost – WP2B – D1 MEDITERRANEAN SOUTH Decreases in crop yields are also forecast for this zone, together with greater yield variability. A significant reduction in water availability is predicted together with an increase in water demand, leading to potential conflict between users. Decreasing water resources are likely to damage soil structure while reduced soil drainage may lead to increased salinity. These changes are expected to reduce the diversity of Mediterranean species. Table 1 summarises the climate change impacts by agro-climatic region (Iglesias et al., 2009). 9 ClimateCost – WP2B – D1 Table 1 Climate change impacts on agro-climatic zones in Europe. Source: Iglesias et al., 2009. Agro-climatic Impact described and direction of change area Boreal Atlantic - Increase in crop suitability. - Positive relationship between yield and temperature. - Permafrost thaw. Destabilization of soils, landslides, negative effects on forests. - Changes in population distributions of terrestrial ecosystems, biodiversity loss. - Increase in pest populations and distribution with increased temperature. - Increased weather extremes and susceptibility of forest to extremes and pests. - Glaciers retreat with increased CO2 and temperature. - Increase in pest populations in boreal forests insects and distribution with increased temperature. - Decrease in productivity of short rotation forests. - Accelerated rate of glacier mass loss, secondary impacts on economy - Definition of agro-climatic regions, observed changes in distribution of barley and potato. - Decreased available water resources. Increased floods. - Increased frequency and intensity of forest fires. - Increased wheat yield with higher temperatures. - Changes in health, nutrition, productivity of livestock. - Land use change, ecosystem disturbances and fragmented populations. - Increased flood frequency. - Soil erosion - Continental 10 - Increased rate of melting of snow Decrease in precipitation leading to reduced yields of wheat Increase in frequency and intensity of floods. Glacier retreat and snow depth decrease. Disappearance of wetlands, encroachment of agriculture. Modification of forest structure and functions, decreased productivity. Intensification of hydrological cycles, more extreme events, need for management. Increase in crop production with increasing temperature, pests too. Increase in yields of soybean especially in mineral soil. Changes in crop productivity and distributions. Increased frequency of extreme floods and droughts events. Increased frequency and intensity of flash floods in the summer. Increased mortality of trees. Decrease in runoff of up to 50% in mountain areas. Snow cover early-melting. ClimateCost – WP2B – D1 Agro-climatic Impact described and direction of change area Alpine - Snow melt increase Intensification of hydrological cycle (increased erosion, floods and glacier retreat). - Increase in extreme climate events affecting vulnerable areas like mountains. - General increase, greater differences between day and night temperatures. - Increased speed of snow melt Secondary effects of glacier retreat on tourism economy. - Distribution of species in mountainous areas may shift upwards. - Accelerated permafrost thaw, destabilization of soils, landslides. - Observations of decreased snow depth, with differences among regions. - Higher than average temperature increase. Decrease of snow cover depth and loss of biodiversity - Accelerated rate of glacier mass loss in the last decade. - Observed changes in the inventory of biodiversity and species distribution. - Vegetation is quite stable but land use change is highly possible. - Distribution of pasture land use will change due to changing conditions Mediterranean - Increase in frequency and intensity of floods. Decrease in maize yields. General increase grapevine in yields. Decrease of yields up to 40% under current management conditions. General decrease in yields and increase in irrigation requirements. Crop yields variations Increased variability of yields and associated risk. Decrease in water availability and increase in water demand. Decreased productivity, changes in distribution. Reduced diversity of seedlings Loss of diversity in Mediterranean species. Changes in drainage of soils leading to increased salinity. Desertification Water resources deficit, affected soil structure. Synthesis of main impacts 2.3 Here we summarise the climate factors and determinants of change in agriculture, the expected direction of change and the potential consequences for agriculture and water for agriculture. The primary drivers include changes in atmospheric CO2, O3, sea level rise, extreme events, precipitation and average temperature and heat stress, as discussed below. Table 2 summarises the impacts on agriculture and water for agriculture derived from the changes in the main drivers. INCREASE IN ATMOSPHERIC CO2 The result is an increased biomass production and increased potential efficiency of physiological water use in crops and weeds. Modified hydrologic balance of soils due to C/N ratio modification. Changed weed ecology with potential for increased weed competition with crops. Agro- 11 ClimateCost – WP2B – D1 ecosystems modification. N cycle modification. Lower yield increase than expected INCREASE ATMOSPHERIC O3 Crop yield decrease INCREASE TEMPERATURE Increase differences in day-night temperature. Modifications in crop suitability and productivity. Changes in weeds, crop pests and diseases. Changes in water requirements. Changes in crop quality. Modifications in crop productivity and quality Increases in heat waves. Damage to grain formation, increase in some pests CHANGES IN THE HYDROLOGICAL CYCLE Increased temporal and spatial variability of floods and droughts Crop failure. Yield decrease. Competition for water Intensified hydrological cycle Changed patterns of erosion and accretion. Changed storm impacts. Changed occurrence of storm flooding and storm damage Increased water logging. Increased pest damage. Decrease in water resources availability, increase in demand SEA LEVEL RISE Sea level intrusion in coastal agricultural areas and salinization of water supply Table 2 Climate change impacts that determine risks and opportunities to agricultural production at the global or European wide scale. Source: Iglesias et al., 2009 Climate change impact Reference Europe or global scale studies Changes in agricultural optimal zones and agroecosystems due to changes in optimal farming conditions Antle et al., 2004; Darwin, 2004; Ewer et al., 2005; Fischer et al., 2005a; Lansigan et al., 1997; Metzger et al., 2006; Olesen et al., 2002; Rosato et al., 2003; Rousevell et al., 2005, 2006 Changes in crop productivity Agrell et al., 2004; Allard et al. 2003, 2004; Arnell et al., 2002; Carbone et al., 2003; Challinor et al., 2007; Chen et al., 2005; Daepp and quality et al., 2001; Darwin, 2004; Döös et al., 1999; Edwards et al., 2001; Ehleringer et al., 2002; Ewert et al., 2007; Fuhrer et al., 2003; Gill et al., 2002; Gregory et al., 2005; Jablonski et al., 2002; Kimball et al., 2002; Milchunas et al., 2005; Newman et al., 2001; Nowak et al., 2004; Ollinger et al., 2002; Parry et al., 2001, 2004; Peng et al., 2004; Picon-Cochard et al., 2004; Rosenzweig et al., 2001, 2005, 2008; Rotter et al., 1999 ; Shaw et al., 2002; Stacey et al., 2002; Teyssonneyre et al., 2002; Thomas et al., 2003; Tubiello et al., 2000, 2002; Wullschleger et al., 2002; Zhao et al., 2003; Zvereva et al 2006; Ashmore 2005; Fiscus et al., 2005; Caldwell et al., 2005; Dhakhwa et al., 1998; Volder et al., 2004; Mearns et al., 1996; Beniston 2004 ; Schar et al., 2004; Wheeler et al., 2000 12 ClimateCost – WP2B – D1 Climate change impact Reference Increased risk of agricultural pests, diseases, weeds Biodiversity loss Chakraborty et al., 2003; Chen et al., 2001, 2005a, 2005b; Cocu et al., 2005; Crozier et al., 2006; Easterling et al., 2001, 2003; Gan, 2004; Hannah et al., 2002; Iglesias et al., 2002; Patterson et al., 1999; Runion, 2003; Tamis et al., 2001; Todd et al., 2002 Increased risk of extreme events Arnell 1999; Bradford 2000; Burke et al., 2006; COPA-COGECA 2003; Hanson et al., 2000; Hisdal et al., 2001; Martinez et al., 2003; Motha et al., 2005; Reichstein et al., 2002; Rosenzweig et al., 2001; Vogt et al., 2000 Changes in water availability, Alcamo et al., 2003, 2007, 2008; Arnell, 1999, 2004; Boorman et al., permafrost, need of irrigation 1997; Döll 2002; Eckhardt et al., 2003; Fisher et al., 2005; Gleick, 2003; Mimikou et al., 2000; Rosenzweig et al., 2005; Vorosmarty et al., 2000 Deterioration of water and soil Laporte et al., 2002; Rounsevell et al., 1999, 2005a, 2005b, 2006; Yeo, 1998 quality, desertification Sea level intrusion Nicholls et al., 2004; Changes in livestock productivity Frank et al., 2001; Mitchell et al., 2001 Improvement of energy efficiency in glasshouses Due to increase in temperautre in the climate change scenarios 13 ClimateCost – WP2B – D1 CHANGES IN LAND USE A shift in the location of optimal conditions for specific crop or livestock production systems may lead to a loss of rural income and soil deterioration in the areas where those modes of production can no longer be maintained. Such losses of established farming practices may lead to a loss of cultural heritage, land abandonment and increased risk of desertification. There is a high risk of these problems occurring during the 21st century. Rising sea levels may also lead to significant land use changes. An indirect effect on agriculture may occur if rising sea levels make population centres uninhabitable. The displaced populations will need to be housed and at least some of the housing is likely to be built on agricultural land. CHANGES IN OPTIMAL FARMING SYSTEMS Adaptation to these changes would require new investments and managerial skills. The financial feasibility of the new investments required will depend on the profits generated by the new optimal farming systems. The support of public agricultural education networks and agricultural research centers plays a key role for facilitating to farmers the acquisition of new managerial skills. For this impact, private coping capacity could be considered moderate. Decreases in productivity could cause agricultural use land abandonment. The level of confidence of these projections are estimated to be low because their uncertainty is the result of adding the uncertainty on future agricultural prices to the uncertainty upon the climate change impacts on agricultural productivity. The intensity of this impact could be considered high in the areas were the optimal farming systems are extensive. Intensive farming systems are more resilient to climate change. CROP GROWTH CONDITIONS, CROP PRODUCTIVITY AND CROP DISTRIBUTION In some regions a positive relationship between temperature and crop yield is forecast with increased wheat and grass yields resulting from higher temperatures and increased CO2 concentrations. Greater concentrations of CO2 in the atmosphere have the potential to increase biomass production and to increase the physiological efficiency of water use in crops and weeds. However, increases in CO2 do not produce proportional increases in crop productivity; other factors play a significant role. While experiments with increased concentrations of CO2 under controlled conditions have been shown to significantly increase yields of crops, these increases have occurred when other factors such as moisture supply, nutrients and pest and disease incidence have not been limiting. In practice, an insufficient supply of water or nutrients or greater pest/disease attack or competition from weeds is expected to frequently negate the fertilizing impact of increased CO2 concentrations in the atmosphere. Since weed growth may also be enhanced by increased CO2, a changed weed ecology may emerge with the potential to increase weed competition with crops 14 ClimateCost – WP2B – D1 Increased concentrations of tropospheric ozone will be expected to reduce crop yields. Ozone enters plant leaves through the stomatal openings in the leaf surface where it produces by-products that reduce the efficiency of photosynthesis. When the optimum temperature range for a crop is exceeded, plant growth tends to be reduced. The optimum temperature varies between species, yet most crops are sensitive to episodes of high temperature. Air temperatures between 45 and 55°C that continue for at least 30 minutes damage crop leaves in most environments; even lower temperatures (35 to 40°C) can be damaging if they persist. The vulnerability of crops to temperature damage varies with developmental stage. High temperatures during reproductive development are particularly injurious – for example, to corn at tasseling, to soybean at flowering, and to wheat at grain-filling. Soybean is one crop that seems to be able to recover from heat stress. Heat stress and drought stress often occur simultaneously, with one contributing to the other. They are often accompanied by high solar irradiance and high winds. When crops are subjected to drought stress, their stomata close. Such closure reduces transpiration and, consequently, raises plant temperatures. The delineation of agro-climatic regions is likely to change. There may be losses of indigenous crop varieties, in particular traditional top and soft fruit varieties. The risks associated with these problems are considered high for some crops and regions. Episodes of high relative humidity, frost, and hail can also affect yield and quality of fruit and vegetables. In some regions a positive relationship between temperature and crop yield is forecast with increased wheat and grass yields from higher temperatures and increased CO2 concentrations. The distribution of agro-climatic regions is likely to change. There may also be losses of indigenous crop varieties, in particular traditional top and soft fruit varieties. The risks associated with these problems are considered high for some crops and regions. LOSS OF RURAL INCOME AND CULTURAL HERITAGE In some regions of Europe, economic welfare of rural societies depends heavily on incomes generated by agriculture. Likewise, traditional farming systems are valued by some societies as a cultural heritage. The level of confidence of projections related to this impact are considered to be low because their uncertainty is the result of adding the uncertainty on future agricultural prices, the uncertainty upon the climate change impacts on agricultural productivity, and the uncertainty related to the society perception on the value of this cultural heritage. Alternative income generator activities and employments in rural areas contribute to increase the private coping activity of farmers. Technology and innovation can also contribute to improve the competitiveness of European farming systems. Despite these considerations, we have considered that farmer's private coping activity against the climate change impact is moderate. The intensity of this effect is difficult to characterize qualitatively on the basis of the information available. 15 ClimateCost – WP2B – D1 AGRICULTURAL PESTS AND DISEASES Crop yield and quality may decrease, risking loss of rural income due to the incidence of new or more intense problems of pests and disease. Actions taken to mitigate these risks may lead to a decrease in water quality from increased use of pesticides. The risk of these problems has been assessed as medium. CONSEQUENCES OF AGRICULTURAL CHANGES FOR BIODIVERSITY Climate change is likely to lead to changes in the distribution of species. The great speed at which climate is forecast to change is likely to lead to a loss of natural adaptation options and a loss of diversity, especially in Mediterranean species. Changes in land use due to climate change may lead to ecosystems disturbances and fragmented populations. These risks are regarded as of medium likelihood. INCREASED RISK An increasing number of studies are showing the effect of current climate variability and extremes in agricultural production, especially in areas where crops are cultivated near their climatic limits (Rosenzweig et al., 1999; Iglesias et al., 2000). Changes in climate variability and extremes are likely to be at least as important as changes in mean climate conditions in determining climate change impacts and vulnerability (high confidence) (IPCC TAR, 2001). Increased frequency of extremes events could result in higher insurance fees. The application of risk management techniques may contribute to increase the private coping capacity of farmers in these areas. But the ability of crop diversification strategies to mitigate the increase in climate variability impacts depend on the magnitude of such increase. The private adaptive capacity to this impact is considered low. EXPENDITURE IN EMERGENCY AND REMEDIATION ACTIONS The need for increased spending as a result of damage caused by extreme weather events will lead to a loss of rural income and economic imbalances between the more and less prosperous parts of Europe, especially since insurance cover tends to increase with higher income. The risk of this is regarded as high for regions with low adaptive capacity, but medium for other regions of Europe. CHANGES IN WATER RESOURCES The impacts of climate change and increased climate variability water resource availability and demand. The main consequences of changes in water resources include: 16 Increased demand for water in all regions due to increases in crop evapotranspiration in response to increased temperatures. Increased water shortages, particularly in the spring and summer months, increasing the water requirement for irrigation, especially in southern and southeastern Europe. Reduced water quality due to higher water temperatures and lower levels of runoff in some regions, particularly in summer, imposing further stress in irrigated areas. ClimateCost – WP2B – D1 W ATER RESOURCE AND IRRIGATION REQUIREMENTS Changes in hydrological regimes will lead to differences in water needs by agriculture. Decreased availability of water may lead to crops suffering moisture stress, insufficient water being available for irrigation, possible risks of reduced water quality, increased risk of soil salinization and conflicts between users. For crop production, a change in the seasonality of precipitation may be even more important than a change in the annual total. The water regime of crops is also vulnerable to a rise in the daily rate and potential seasonal pattern of evapotranspiration, brought on by warmer temperature, drier air, or windier conditions. Interannual variability of precipitation is a major cause of variation in crop yields and yield quality. Crop yields are most likely to suffer if dry periods occur during critical developmental stages. In most grain crops, flowering, pollination, and grain-filling are especially sensitive to water stress. Management practices offer strategies for growing crops in water-scarce conditions. For example, the effects of drought can be minimized by early planting of cultivars with rapid rates of development; fallowing and weed control can help to conserve moisture in the soil. By reducing vegetative cover, droughts exacerbate wind and water erosion, thus affecting future crop productivity. Increasing demand for water is likely to lead to increased groundwater abstraction and depletion of those resources. The likelihood of these risks occurring is reported as high. Excessively wet years may also cause yield declines due to waterlogging and increased pest infestations. High soil moisture in humid areas can also hinder field operations. Intense bursts of rainfall may damage younger plants and promote lodging of standing crops with ripening grain. The extent of crop damage depends on the duration of precipitation and flooding, crop developmental stage, and air and soil temperatures. TOO MUCH WATER Heavier winter rain and the decreased proportion of winter precipitation falling and being stored as snow will increase the occurrence of floods, damaging crops at vulnerable stages of development and disrupting farm activity. Excessively wet years may cause declining yields as a result of waterlogging and increased pest and disease problems. Intense rain and hail-storms can affect yield and quality of vulnerable crops, such as soft fruits. Sea level rise will directly impact some agricultural land, contribute to greater pressures via changes to land use around urban areas and increase the salinity of some water resources. TOO LITTLE WATER 17 ClimateCost – WP2B – D1 Reduced water availability may lead to insufficient water available for irrigation, crops suffering from heat and drought stress, and increased competition for water resources may result in higher prices and regulatory pressure. Increased manure and fertiliser applications (as a response to reduced nutrient uptake), may lead to a reduction in water quality as nutrients and other leachates are not sufficiently diluted by rainfall. Drought will lead to soil degradation, which is a major threat to the sustainability of Europe’s land resources and may impair the ability of European agriculture to successfully adapt to climate change. Increased salinity may result in land abandonment as it becomes unsuitable for cropping. W ATER QUALITY, SOIL FERTILITY, SALINITY AND EROSION Lower levels of winter rainfall will mean that various leachates are not adequately diluted, leading to decreased water quality. Other climate-induced changes in crop growth, such as reduced yields and associated extra fertilizer and manure loading, will exacerbate the problem of water quality. Increased salinity, as a result of drought or seal level rise, may lead to land becoming unsuitable for cropping and being abandoned. In extreme cases this may lead to desertification. The risk of these problems occurring is reported to be high. Soil degradation is a major threat to the sustainability of Europe’s land resources and may impair the ability of European agriculture to adapt successfully to climate change. European soils are currently experiencing a range of conservation problems, including high erosion rates (and erosion-derived agro-chemical pollution of waterways), declines in soil organic matter and vulnerability of soil organic carbon pools. These are linked to site factors and changing land management practices and are being exacerbated by climate change and the increasing incidence of extreme weather events. Although different EU policies (e.g. agriculture, nature conservation, pesticides, and water) have the potential to contribute to soil protection, they are not in themselves sufficient to ensure adequate levels of protection for all soils in Europe. For this reason, the EC adopted (in September 2006) a comprehensive EU strategy dedicated to soil protection. The proposal for a Framework Directive (COM(2006)232) sets out common principles for protecting soils across the EU, from which Member States can decide how best to protect their own soils and use them in a sustainable manner. However, the Directive must embrace the potential synergies between soil protection, land use change, the long-term sustainability of farming systems and climate change, linking in issues of adaptation and mitigation, carbon sequestration and the emission of greenhouse gases in the agriculture sector. 18 ClimateCost – WP2B – D1 CHANGES IN OPTIMAL CONDITIONS FOR LIVESTOCK PRODUCTION A warmer and drier climate may reduce forage production leading to changes in optimal farming systems and loss of rural income in areas dependent on traditional grazing agriculture. In some northern areas a warmer climate, by extending the growing season, has the potential to increase forage production. However, such areas are also forecast to have increased over-winter rainfall and so it may be difficult to fully utilise the increased potential. In other parts of Europe new crops such as soya could be grown to produce livestock feed. However, a switch away from grazed forages and increasing heat stress, both leading to an increased requirement for livestock housing, will increase costs and, by increasing manure production, may lead to a decrease in water quality in consequence of contamination following manure spreading. The risk associated with these problems is regarded as low. 2.4 Monetary estimates The effects of climate change in regional, national, or global agricultural economy have been analysed by using several types of economic models in order to estimate the potential impacts of climate change on production, consumption, income, gross domestic product (GDP), employment, and farm value (Darwin, 2004; Kaiser et al., 1993; Reilly et al., 2003). For agricultural impact assessment, the models allocate domestic and foreign consumption and regional production based on given perturbations of crop production, water supply, and demand for irrigation derived from biophysical techniques. Population growth and improvements in technology are set exogenously. These models measure the potential magnitude of climate change impacts on the economic welfare of both producers and consumers of agricultural goods. The predicted changes in production and prices from agricultural sector models can then be used in general equilibrium models of the larger economy. Computable General Equilibrium (CGE) models comprise a representation of all major economic sectors, empirically estimated parameters and no unaccounted supply sources or demand sinks. In general equilibrium models countries are linked through trade, world market prices and financial flows, and change in relative prices induce general equilibrium effects throughout the whole economy. Although partial equilibrium models make it possible to estimate the costs of policy measures, taking substitution processes in production and consumption as well as market clearing conditions into account, CGE models additionally allow for adjustments in all sectors, enable to consider the interactions between the intermediate input market and markets for other commodities or intermediate inputs, and complete the link between factor incomes and consumer expenditures (Conrad, 2001). The Stern Review of the Economics of Climate Change (Stern et al., 2006) argues that “the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year. This has been challenged by many economists with large working experience in climate change. 19 ClimateCost – WP2B – D1 Quiroga and Iglesias (2008) provide monetary estimates of the impacts of climate change in European agriculture. Future scenarios are derived from several socioeconomic scenarios and experiments conducted using global climate models and regional climate models. The economic valuation is conducted by using GTAP general equilibrium model across simulations based on crop productivity changes that consider no restrictions in the volume water availability for irrigation in current irrigated areas or in the application of nitrogen fertilizer. Thus the results should be considered optimistic from the production point and pessimistic from the environmental point of view. Regional differences between northern and southern European countries are found and the monetary estimates show that uncertainty derived from socio-economic scenarios has a larger effect than uncertainty derived from climate scenarios. 2.5 Treatment of climate and socio-economic change Table 3 presents a summary of the treatment of climate and socio-economic changes in the impact studies in agriculture and water resources published over the last 20 years. Table 3 Treatment of climate and socio-economic change Treatment of climate and socioeconomic change Climate change scenarios considered Aspects considered in the published studies Climate variables considered T, PP, Solar radiation , CO2 Socio-economic variables Time periods Productivity, land use, water availability, GDP, population 2010 to 2100 Consideration of major events Rarely All IPCC scenarios Long-term (post 2100) catastrophic events Very rarely (input for WP3) Very high climate sensitivity (>6 C) Very rarely 2.6 Disparities in the results Many studies provide different results. There are a number of reasons for this. Impacts occur at different scales (farm, community, region, country). However, assessments of climate impacts, and modelling of agricultural productivity, are usually at regional, national or global scales. The application of information from coarse-scale impact studies to devise farm-level adaptation measures is fraught with difficulties. The inherent uncertainty in climate science, tools and impacts projections may lead to confused results and communication of the results. The main disparity in the results arises from the different assumptions on the consideration of water (or lack of consideration) in the agricultural assessments. 20 ClimateCost – WP2B – D1 A review of methods 3 This section describes the methods used in the assessment of the specific climate change impacts being considered. This section focuses on the methods for making climate change impact evaluations. The merits of each approach vary according to the level of impact being studied, and they may frequently be mutually supportive. For example, simple agro-climatic indices often provide the necessary information on how crops respond to varying rainfall and temperature in wide geographical areas; crop-specific models are use to test alternative management that can in turn be used as a component for an economic model that analyses regional vulnerability or national adaptation strategies. Therefore, a mix of approaches is often the most rewarding. 3.1 Approaches Studies at the Country level provide an opportunity for establishing the communication pathways between technical information and policy. In many cases the potential for application of the results of the assessment strongly depend on the sources of technical information provided overlooking the content of the information. Ogunseitan (2003) analyses the different sources of information and their potential for influencing policy development in Africa. Three different sources of technical information are recognized: Local scientific knowledge; technology transfer from foreign experts and communicated to the local experts (scientists and/or policy makers); and multi-national, in which information is co-produced by international collaborations. The technical information can be evaluated by analyzing three characteristics: Relevance (i.e., relative level of national attention paid to the information), credibility (i.e., level of trust and believability attributed by regional agencies to international sources), and legitimacy (i.e., subscription of national agencies to the recommendations of the technical assessments). Table 4 outlines the strengths and weaknesses of the approaches for producing technical information summarizing the research of Ogunseitan (2003). Table 4 Approaches to produce information. Information source: Ogunseitan (2003). Approach Strengths Weaknesses Local scientific knowledge - Highly relevant - Non participation of the - Focus on the potential of climate international community may change to exacerbate existing question the credibility of the local stresses assessments by the - Integration of local perspectives internationally connected local increases the credibility of the scientists that may influence assessments policy makers 21 ClimateCost – WP2B – D1 Research and - International accredited scientists - Scientifically credible technology transfer increase the credibility of the international assessments may assessment suffer from perception of - Funding and support from foreign irrelevance at the local level sources may encourage the - Studies focused at the global legitimacy of the assessment or regional level may compromise credibility at the local level Multi-National - Integration of the local - Focus on international forums cooperation perspectives and international and issues may affect the accredited scientists and legitimacy at the National level Institutions may increase the legitimacy of the assessments It is important that impacts, vulnerability and adaptation assessments be undertaken for as many different locations as possible and for different sizes of study region, focusing not only on final production, but also on other indicators of vulnerability of the agricultural sector. This will only be most useful, however, if the methods of assessment are broadly compatible, enabling the generation of sets of results that can be compared and integrated into a wider picture of the world food system as a whole. The purpose of this chapter is to provide a review toward a set of approaches that will enable progress toward this objective. The adaptation capacity of the agriculture sector in developing countries is challenged in particular, because climate change comes in conjunction with high development pressure, increasing populations, water management that is already regulating most of available water resources, and agricultural systems that are often not adapted (anymore) to local conditions. Evidence for limits to adaptation of socioeconomic and agricultural systems in many regions can be documented in recent history. For example, water management schemes were not able to cope with sustained droughts or floods in the late 1990s and early 2000s in many countries, causing severe damage to agriculture and to vulnerable populations. Effective measures to cope with long-term drought and water scarcity are limited and difficult to implement because of the variety of the stakeholders involved and the lack of adequate means to negotiate new policies. 3.2 Models In addition, studies can be undertaken using a regional approach or a site-specific approach. In a regional approach, several existing simple tools can be applied and tested under a range of conditions in a given region, and the results are visualized in the form of maps. This simple regional approach is essential for integrating climate change, crop production, water demand indices, and socioeconomic indices at the regional scale, thus providing a first-order evaluating tool to analyze possible adaptation strategies. Each of these different methods yields information on different types of impacts. For example, simple agroclimatic indices can be used to analyze large-area shifts of 22 ClimateCost – WP2B – D1 cropping zones, whereas process-based crop growth models should be used to analyze changes in crop yields. Effects on income, livelihoods, and employment are assessed using economic and social forms of analysis. The major challenge facing all agriculture-climate evaluations is the incorporation of qualitative changes deriving from complex interactions. For example, a decrease in crop yields in developing countries leads to severe qualitative changes. Whether the resulting chain of interactions (e.g., from malnutrition to social conflicts) can be modelled is rather dubious. AGROCLIMATIC INDICES AND GIS Simple agroclimatic indices combined with GIS have been used to provide an initial evaluation of both global agricultural climate change impacts and shifts in agricultural suitable areas in particular regions. The agroclimatic indices are based on simple relationships of crop suitability or potential to climate (e.g., identifying the temperature thresholds of a given crop or using accumulated temperature over the growing season to predict crop yields; e.g., Holden, 2001). This type of empirically derived coefficient is especially useful for broad-scale mapping of areas of potential impact. The agroclimatic indices are based on simple relationships of crop suitability or potential to climate (e.g., identifying the temperature thresholds of a given crop or using accumulated temperature over the growing season to predict crop yields) (Petr, 1991; Holden, 2001; Tooming, 1993). This type of empirically-derived coefficients are especially useful for broad-scale mapping of areas of potential impact. Indices frequently used to measure moisture include: Thornthwaite’s Precipitation Effectiveness Index; Palmer Drought Index; Relative Dryness Index; Standart Precipitation Index. When combined with a spatially comprehensive data base and a geographic information system (GIS), simple agroclimatic indices enable the mapping of altered crop potential for quite large areas at relatively low cost. This combination of agroclimatic index, GIS and a synthetic climatic scenario offers rapid and inexpensive means of mapping the effects of climatic change on crop suitability. Examples of the application of agroclimatic indices in Africa (Badini et al., 1997) and Europe (Carter and Saarikko, 1996; Holden, 2003; Holden and Brereton, 2004) provide an analysis and understanding of the intimate relationships between the weather, soils and agricultural production systems, and especially the complexities associated with the variability and distribution of rainfall and soil type are essential elements in improving crop production and agricultural planning decision making. There are three basic methods for agroclimatic spatial analysis and the choice of the method depends on data availability (Carter and Saarikko, 1996). First, the simplest method of representing zones is to interpolate between site estimates onto a base map. Here subjective methods can be used to account for local features such as soils, altitude or proximity to lakes, which are known to influence crop potential. The second method is to first interpolate the original environmental data to a finer resolution, e.g., to a regular grid, and compute the measures using the gridded data. This method has been applied both for suitability and productivity purposes. In the third method a region 23 ClimateCost – WP2B – D1 is divided into contiguous units of varying size depending on the environmental properties. The indices can then be calculated at sites that are considered representative of predefined homogenous areas to derive spatial estimated. STATISTICAL MODELS AND YIELD FUNCTIONS Complex multivariate models attempt to provide a statistical explanation of observed phenomena by accounting for the most important factors (e.g., predicting crop yields on the basis of temperature, rainfall, sowing date and fertiliser application). Statistical models may be developed from empirical data or from the combination of empirical data and simulated data that represents the causal mechanisms of the agricultural responses to climate. Models build only on the basis of present day climatic variations are well understood and relevant for engaging stakeholders. A possible weakness in considering future climate change is their limited ability to predict effects of climatic events that lie outside the range of present day variability. The method may also be criticised for being based on statistical relationships between factors rather than on an understanding of the important causal mechanisms. However, where models are founded on a good knowledge of the determining processes and where there are good grounds for extrapolation, they can still be useful predictive tools in climate impact assessment. Multiple regression models can be developed to represent process-based yield responses to these environmental and management variables. Yield functions have been used to evaluate the sensitivity and adaptation to climate in China (Rosenzweig et al., 1997), Spain (Iglesias et al., 1999), and globally (Parry et al., 2003). PROCESS-BASED CROP MODELS Process-based models use simplified functions to express the interactions between crop growth and the major environmental factors that affect crops (i.e., climate, soils, and management), and many have been used in climate impact assessments. Most were developed as tools in agricultural management, particularly for providing information on the optimal amounts of input (such as fertilizers, pesticides, and irrigation) and their optimal timing. Dynamic crop models are now available for most of the major crops. In each case, the aim is to predict the response of a given crop to specific climate, soil, and management factors governing production. The ICASA/IBSNAT dynamic crop growth models (International Consortium for Application of Systems Approaches to Agriculture – International Benchmark Sites Network for Agrotechnology Transfer) are structured as a decision support system to facilitate simulations of crop responses to management (DSSAT). The ICASA/IBSNAT models have been used widely for evaluating climate impacts in agriculture at different levels ranging from individual sites to wide geographic areas (see Rosenzweig and Iglesias, 1994, 1998, for a full description of the method). This type of model structure is particularly useful in evaluating the adaptation of agricultural management to climate change. The DSSAT software includes all ICASA/IBSNAT models with an interface that allows output analysis. 24 ClimateCost – WP2B – D1 The WOFOST model suite is generic and includes model parameters for certain crops (Supit et al., 1994; Boogaard et al., 1998). There are several versions of the models, which are under continuous development at the University of Wageningen. The EPIC model (Erosion Productivity Impact Calculator; Sharpley and Williams, 1990) incorporates simplified crop growth functions that respond to climate, environment, and management; it has been used in some climate impact assessments. CROPWAT is an empirical irrigation management model developed by the United Nations Food and Agriculture Organization (FAO) to calculate regional crop water and irrigation requirements from climatic and crop data (CROPWAT, 1995, 2004). Net irrigation demand (balance between the crop evapotranspiration and the water available for the crop) can be calculated for more than 1,000 sites around the world included in the FAOClim database (FAO, 2004). The model can be adjusted to include irrigation efficiency for each region. Rosenzweig and Iglesias (1998) provide more complete guidelines for using crop models in adaptation studies. Table 5 summarises the main characteristics and data requirements of the DSSAT models. Table 5 Description of the DSSAT crop models Description: The DSSAT models use simplified functions to predict the growth of crops as influenced by the major factors that affect yields, i.e., genetics, climate (daily solar radiation, maximum and minimum temperatures, and precipitation), soils, and management. Models are available for many crops (see Table 7.5); these have been validated over a wide range of environments and are not specific to any particular location or soil type. Modeled processes include phenological development, growth of vegetative and reproductive plant parts, extension growth of leaves and stems, senescence of leaves, biomass production and partitioning among plant parts, and root system dynamics. The models include subroutines to simulate the soil and crop water balance and the nitrogen balance. Variables: The primary variable influencing each phase of plant development is temperature. Potential dry matter production is a function of intercepted radiation; the interception by the canopy is determined by leaf area. The dry matter allocation to different parts of the plant (grain, leaves, stem, roots, etc.) is determined by phenological stage and degree of water stress. Final grain yield is the product of plant population, kernels per plant, and kernel weight. To account for the effect of elevated carbon dioxide on stomatal closure and increased leaf area index, a ratio of transpiration under elevated CO2 conditions to that under ambient conditions is added. Inputs Type of data Requirements Source of data Current climate Daily maximum and minimum National meteorological or research temperatures and solar institutions. Daily data may be radiation for at least a 20simulated from monthly averages year period. when not available. Modified climate (climate Modified daily maximum and National meteorological or research change scenarios) minimum temperatures, institutions. precipitation, and solar radiation for a period of the same length as the current climate. 25 ClimateCost – WP2B – D1 Crop management Soils Economics (optional) Crop variety, sowing date Agricultural research institutions. and density, fertilizer and irrigation inputs (dates and amounts). Soil albedo and drainage, Agricultural or hydrological research and a description of the institutions. different layers of the soil profile (texture, water holding capacity, organic matter, and nitrogen). Cost of labor and price of unit Agricultural statistics. production. Outputs: Variables included in the summary output file are the main phenological events, yield and yield components. For more information: Rosenzweig and Iglesias, 1994 and 1998. 3.3 Economic models GENERAL CONSIDERATIONS Economic models are designed to estimate the potential impacts of climate change on production, consumption, income, gross domestic product (GDP), employment, and farm value. These may be only partial indicators of social welfare, however. Not all social systems, households, and individuals (for example, smallholder farmers) may be appropriately represented in models that are based on producer and consumer theory. Many of the economic models used in impact analyses to date do not account for the climate-induced alterations in the availability of land and water for irrigation, although such important considerations can be included. Studies and models based on marketoriented economies assume profit and utility maximizing behaviour. Several types of economic approaches have been used for agricultural impact assessment. The most useful of these are simple economic forecasting approaches (e.g., Benioff et al., 1996), which are forecasts based on a structured framework of available economic (production, consumption, and governing policies) and agricultural (production techniques and alternative crops) information. These are generally simple techniques that can be used in most climate impact studies. The following approaches can also be used, although they are relatively complicated and may be difficult, time-consuming, or expensive to apply. Three broad classes of economic model can be identified: Programming models, economic models, and Input-Output models. Programming models have an objective function and constraints. The objective function represents the behaviour of the producer (e.g., profit maximising or cost minimizing). If the objective function and constraints are linear, the model is a Quadratic Programming (QP) model. If either the objective function or the constraints are nonlinear, the resulting model is a Nonlinear Programming model. 26 ClimateCost – WP2B – D1 Economic models consist of supply and/or demand functions which use as independent variables prices and a number of 'technical' variables, and usually include time to represent those parts of the economy that undergo steady change. Like programming models, these models also have their parameters numerically quantified, but econometric models differ substantially in their structure from programming models. Input-output (IO) models are developed to study the interdependence of production activities. The outputs of some activities become inputs for others, and vice versa. These input-output relationships are generally assumed to be constant, which is a weakness of the approach, since re-organization of production or feedback effects (such as between demand and prices) may change relationships between activities. This is of particular concern when projecting production activities beyond a few years into the future. ECONOMIC REGRESSION MODELS Mendelson et al, 1994. Statistical relationships between climate variables and economic indicators. Farmer adaptation to local climate conditions is implicitly considered. World food prices and domestic farm output prices are considered constant. ECONOMIC CROSS-SECTIONAL MODELS One form of economic analysis is the use of spatial analogues, that is, cropping patterns in areas with climates similar to what may happen under climate change. This Ricardian approach has been used in a number of applications (e.g., Mendelsohn et al., 1994, 1999). Economic models can be based on statistical relationships between climate variables and economic indicators. An advantage of the approach is that farmer adaptation to local climate conditions is implicitly considered. Among the disadvantages are that food prices and domestic farm output prices are considered constant, and key factors that determine agricultural production, such as water availability and carbon fertilization, are not generally considered. MICROECONOMIC MODELS (FARM LEVEL) These are models based on the goal of maximizing economic returns to inputs. They are designed to simulate the decision-making process of a representative farmer regarding methods of production and allocation of land, labor, existing infrastructure, and new capital. These farm models have most often been developed as tools for rural planning and agricultural extension, simulating the effects of changes in inputs (e.g., fertilizers, irrigation, credit, management skills) on farm strategy (e.g., cropping mix, employment). They tend to be optimizing economic models using linear programming and require quite specific data and advanced analytic skills. Many take a range of farm types that is representative of those existing in a region and, for each of these types, simulate the mix of crops and inputs that would maximize farm income under given conditions. These conditions can be varied (variation of weather, prices of crops, and fertilizers) and the appropriate farm response modeled. Changes of climate, instead of variations of weather, can be input, and the farm-level response in output and income is then simulated. HOUSEHOLD AND VILLAGE MODELS 27 ClimateCost – WP2B – D1 In semi-commercial economies, it may be more appropriate to focus on the household or village as the unit of response. Here the objective may be to secure a minimum level of income rather than to maximize income, and the focus of analysis should be on the strategies developed to reduce the negative effects of crop yield changes rather than increase the positive ones. Frequently referred to as coping strategies, these have been analyzed in particular detail in the context of risk of hunger (often related to drought). As with farm models, those climate impact assessments that have included successful analyses on responses at the household and village level have tended to borrow from existing studies, adapting them to consider changes in climate rather than variations of weather. For specific examples of their use in climate impact assessment in Kenya and India, see Akong’a et al. in Parry et al. (1998) and Jodha in Gadgil et al. (1988). For a more general discussion, see Downing (1991). COST AND BENEFITS One of the most valuable forms in which results of impact assessments can be provided is as costs or benefits. Methods of evaluating these range from formal economic techniques such as cost benefit analysis to descriptive or qualitative assessments. Cost-benefit analysis is often employed to assess the most efficient allocation of resources. This is achieved through the balancing or optimisation of various costs and benefits anticipated in undertaking a new project or implementing a new policy, accounting for the reallocation of resources likely to be brought about by external influences such as climate change. The approach makes explicit the expectation that a change in resource allocation is likely to yield benefits as well as costs, a useful counterpoint to many climate impact studies, where negative impacts have tended to receive the greatest attention. MACROECONOMIC MODELS These can be models of a regional, national, or global agricultural economy. For climate change purposes, the models allocate domestic and foreign consumption and regional production based on given perturbations of crop production, water supply, and demand for irrigation derived from biophysical techniques. Population growth and improvements in technology are set exogenously. These models measure the potential magnitude of climate change impacts on the economic welfare of both producers and consumers of agricultural goods. The predicted changes in production and prices from agricultural sector models can then be used in general equilibrium models of the larger economy. Adams et al. (1990) and Fischer et al. (2002) provide key examples of the use of macroeconomic models. 28 ClimateCost – WP2B – D1 3.4 Summary of methods Table 6 summarises the methods in the agricultural sector. Table 6 Summary of the characteristics of the main agricultural models Type of model Description and use Strengths Agroclimatic Based on combinations Simple indices and GIS of climate factors calculation. Effective for important for comparing across regions crops. Used in many or crops. agricultural planning studies. Useful for general audiences. Statistical Based on the empirical models and yield relationship between functions observed climate and crop responses. Used in yield prediction for famine early warning and commodity markets. Process-based Calculate crop crop models responses to factors that affect growth and yield (i.e., climate, soils, and management). Used by many agricultural scientists for research and development. Weaknesses Climate based only, lack management responses or consideration of carbon fertilization. Presentday crop and Do not explain causal climatic variations are well mechanisms. May not described. capture future climate crop relationships or CO2 fertilization. Process based, widely calibrated, and validated. Useful for testing a broad range of adaptations. Test mitigation and adaptation strategies simultaneously. Available for most major crops. Require detailed weather and management data for best results. Economic tools Calculate land values, Useful for incorporating commodity prices, and financial considerations economic outcomes for and market-based farmers and consumers adaptations. based on crop production data. Not all social systems, households, and individuals appropriately represented. Climateinduced alterations in availability of land and water not always taken into account. Focus on profit and utilitymaximizing behavior. Models are complex and require a lot of data. Household and Description of coping Useful in semi-commercial village models strategies for current economies. conditions by household and village as the unit of response. Not generalizable; Do not capture future climate stresses, if different from current. 29 ClimateCost – WP2B – D1 3.5 Treatment of adaptation A single, widely accepted set of procedures has not been established for evaluating local or regional adaptation to climate change, probably due in part to the great differences in priorities between different locations. Furthermore, assessing adaptation options involves value adjustments, which are subjective and can be controversial. The optimal method needs to measure the effectiveness of the adaptation and to incorporate the information into a concise form usable by decision-makers. The complexity of dealing with conflicting objectives and multiple criteria is recognized as one of the most difficult issues in conducting adaptation analyses. Box 1 Definitions: impact, risk, opportunity, adaptation Impacts are the consequences of climate change that are likely to affect agricultural activities. For example, a decrease in rainfall during summer is likely to impact grain filling of cereals. Risk is the possible adverse outcome of a particular impact. From the example given above, there is a risk that summer droughts will reduce wheat yields. Opportunity is the possible beneficial outcome of a particular impact. From the example given above, there is an opportunity that increased average temperatures will expand the potential areas for cultivation in northern European regions that are currently limited due to sub zero temperatures in the spring. Adaptation is a measure, or measures, that can be taken to reduce the impact of a particular risk. From the example above, there are a number of means by which cereal growers could adapt to increased summer drought, such as using irrigation. European agricultural policy faces some serious challenges in the coming decades – even without climate change. The most striking of these are the loss of comparative advantage in relation to international growers, competition for international markets, declining rural populations, land deterioration, competition for water resources, and rising costs due to environmental protection policies. Demographic changes are altering vulnerability to water shortages and agricultural production in many areas, with potentially serious consequences at local and regional levels. Population and land-use dynamics, and the overall policies for environmental protection, agriculture, and water resource management, are the key drivers for possible adaptation options to climate change. The 2003 reforms of the CAP were a first step towards a framework for the sustainable development of EU agriculture. The central objective of the reforms was to promote an agricultural sector that was competitive and responsive to the market. This was founded on the principles of high standards for the environment, the public, animal and plant health, and animal welfare. Decoupling brought about greater market responsiveness, whereas higher standards were achieved through cross compliance. The future direction of the CAP is likely to build on the 2003 reforms, with a continued shift from market intervention and further decoupling. Notably, the production of key commodities, including sugar, tobacco, olive oil, and fruit and vegetables, have been 30 ClimateCost – WP2B – D1 reformed since 2003, and negotiations between Member States on reform of the wine sector are underway. To minimize the negative impacts of climate change on European agriculture, and to take advantage of the potential benefits, adaptation efforts will need to be introduced at all levels and may need to be coordinated across the EU. Changes at the level of an individual farmer, relating to tillage practice, cultivar variety, planting date and the use of external inputs have been widely studied and demonstrate that adaptation to climate impacts can occur autonomously to some degree with little or no external support. However, farm businesses are unlikely to be able to adapt to the extent, speed and severity of impacts of anticipated changing climatic patterns and extreme events, leaving European agriculture increasingly unstable and vulnerable. The issue is even more pertinent where ‘at risk’ regions and farm businesses are already economically marginal or at the edge of climate tolerance. Here overall rules for farm support, Rural Development policy and crisis management will play important roles in increasing agriculture’s resilience to climate change impacts. The key task facing those this climate adaptation assessment is to identify those regions likely to be vulnerable to climate change, so that impacts can be avoided (or at least reduced) through implementation of appropriate measures of adaptation that are in synergy with the overall environmental, agricultural and water policies of the European Union. Adaptation refers to all those responses to climate change that may be used to reduce vulnerability or to actions designed to take advantage of new opportunities that may arise as a result of climate change. Adaptive capacity is the ability of a system to adjust to climate change, including climate variability and extremes, to moderate potential damages, to take advantage of opportunities, or to cope with the consequences Private adaptation is on the actor’s rational self interest and it is initiated and implemented by individuals, households or private companies. Public adaptation addresses collective needs and it is initiated and implemented by governments at all levels. While most adaptation to climate change will ultimately be characterised by responses at the farm level, encouragement of response by policy affects the speed and extent of adoption. Most major adaptations may require 10 to 20 years to implement. Two broad types of adaptation are considered here: farm-based adaptation (private) and policy adaptation (public). Farm based adaptation includes changes in crops or crop management. Table 13 outlines examples of farm based adaptation measures that can be implemented. The degree of implementation or success of the measures depends on the adaptive capacity of farmers as individual agents. The adaptive capacity can be evaluated by using indicators (Table 14). The indicators of adaptive capacity for European farmers are very robust, suggesting that their adaptive capacity is very high and therefore it can be safely assumed that private adaptation may be optimally implemented providing that there are not policy restrictions (i.e., environmental issues arising from options that result in environmental damage). 31 ClimateCost – WP2B – D1 Policy based adaptation creates synergies with the farmers’ responses particularly in countries where education of the rural population is limited. Agricultural research to test the robustness of alternative farming strategies and development of new crop varieties are also among the policy based measures with a potential for being effective in the future. Public adaptation may be implemented at the local level or regional level. For example, at the local level adaptation initiatives may combine water reallocation initiatives, engineering and structural improvements to water supply infrastructure, agriculture policies and urban planning/management. At the national/regional level, priorities include placing greater emphasis on integrated, cross-sectoral water resources management, using river basins as resource management units, and encouraging sound and management practices. Given increasing demands, the prevalence and sensitivity of many simple water management systems to fluctuations in precipitation and runoff, and the considerable time and expense required to implement many adaptation measures, the agriculture and water resources sectors in many areas and countries will remain vulnerable to climate variability. Water management is partly determined by legislation and co-operation among government entities, within countries and internationally; altered water supply and demand would call for a reconsideration of existing legal and cooperative arrangements. In contrast with private adaptation, public adaptation is far more uncertain and difficult to project. In Europe, the trend in agricultural and water policy focuses on resource management, and in most cases environmental issues are gaining relevance in contrast with agricultural production and this trend will be intensified after 2012 when the CAP will be revised. Policy adaptation is more limited than private farmers’ adaptation since the management of scarce resources – especially water -- implies the establishment of priorities between production strategies, other users such energy, and the environment. In this context two scenarios may modify the results obtained of the physical impacts: Adaptation with emphasis on water resources protection and urban development. This may be taken as the case of no agricultural adaptation. Adaptation with emphasis with protection of agricultural production and rural development. This may be taken as the case of best scenario for agricultural adaptation. The implications of these two policy scenarios are not uniform across all regions in Europe. In some regions, such as Boreal, Continental North or Atlantic North, agriculture in future scenarios does not depend on water policy and therefore water management policy will have no effect in crop yields, but restrictions in the use of fertilisers are expected to have an effect. The greatest effects of adaptation are expected in Southern Europe, where water availability for irrigation is crucial to maintain agricultural activity. The patterns are positive effects except on Mediterranean countries. The most important increases seem to concern the continental south region, where the 32 ClimateCost – WP2B – D1 productivity increases enlarge GDP more intensively due to the importance of agricultural sector in the region. Water restrictions and socio-economic variables that modify the probabilities of change occurring may also be considered in further studies. The monetary estimates also show that in all cases the socio-economic signal, including population patterns (such as migrations) has a larger effect over economic results than the climate signal. That is relevant since the physical effects studies can not capture this effect, while don’t consider factors reallocation. In this study, a common categorisation of planned adaptations into two main groups has been followed (HM Government UK, 2006), classified here as “building adaptive capacity” and “taking adaptive action” (Table 24). These are complementary forms of action, with adaptive actions usually following later in time after adaptive capacity has been built up. The term “adaptive capacity”, used in this definition of vulnerability, has also been widely cited in the literature, often with reference to human groups (from individuals to communities to institutions) that could adapt to climate change. However, the definition extends beyond human activities. “Adaptive capacity is the ability of a system to adjust to climate change, including climate variability and extremes, to moderate potential damages, to take advantage of opportunities, or to cope with the consequences” (IPCC, 2001). Building adaptive capacity involves ensuring that the scientific, technical and socioeconomic evidence, the skills, the governmental and non-governmental partnerships, the policies and the resources are in place to enable adaptation to be undertaken. An example is the UK Government’s Climate Change Impacts and Adaptation (Agriculture) R & D Programme (Defra, 2005) which has considered: the implications of drought risk and increased winter rainfall for crop performance; the impacts of climate change on grassland systems, nutrient pollution and soil function; identification and costing of agricultural adaptive responses; and knowledge transfer issues. In many cases, efforts to build adaptive capacity may be best made at a sectoral level, but even within individual organisations, or for an individual farmer, a certain amount of capacity building (e.g. awareness-raising, education) is initially required as the foundation for the next step of taking actual adaptive action. Taking adaptive action involves increasing the resilience of systems, structures and people to climate risks by reducing their vulnerability and optimising their ability to accommodate and adapt to change. An example from northwest Europe is the management of flood meadows to accommodate increased rainfall and the development of water storage facilities for use in summer irrigation. Anticipatory adaptation, as opposed to reactive adaptation, is important for sustaining existing and future assets with long life spans. Efforts to take adaptive action will necessarily be location and context specific, as they require a deliberate change of practice, whether in management, process or infrastructure. Adaptation strategies are put in place to deliver adaptations. An adaptation strategy is a broad plan of action that is implemented through policies and measures. Adaptation strategies are not only reactions to posed threats of climate change, but 33 ClimateCost – WP2B – D1 can comprise at the same time a large number of technical, social, economic and environmental challenges (Iglesias et al., 2007a; Olesen and Bindi, 2002). Table 7 Summary of approaches to adaptation Type of adaptation Building adaptive capacity Characteristics Examples Creating the information and conditions (regulatory, institutional, and managerial) that enable adaptation actions to be undertaken Climate change impacts research funded by agriculture advisory services. Awareness-raising among farmers. Genetic resources for breeding programmes. Policy support tools. Taking adaptive Taking actions that will help reduce Creating water collection and storage action vulnerability to climate risks or exploit facilities on farms for use in irrigation. opportunities Introducing new crop varieties. Diversification. Resource management tools and infrastructure. Autonomous or Adaptation that occurs naturally or Natural responses of agricultural crops unassisted arises not as a conscious response to seasonal changes. Autonomous adaptation to changing climate farming practices evolution. We have categorised three types of adaptation options in the agriculture sector: management, technical/equipment and infrastructural. The type of measure will largely determine the extent to which farmers can adopt them without additional assistance. Farmers should be able to carry out some changes in management measures without support. This will also be true, to a large extent, for technical measures, while infrastructural measures are likely to require significant capital investment. Some examples of this simple classification are given below, together with some caveats to its use. MANAGEMENT MEASURES The choice of crop variety and pesticide are management decisions which farmers make every year. These decisions are based on information taken from a number of sources: agrochemical industry publications and representatives, government extension service advisers, discussions with other farmers and articles in the farming press; larger farmers may employ professional consultants to provide guidance. To a large extent, the market forces that have driven historic innovation and adaptation may continue to drive the adoption of new measures. TECHNICAL/EQUIPMENT MEASURES The distinction between these and management measures are somewhat arbitrary, as technical understanding is needed to implement the management decisions outlined above. However, the introduction of new crops or livestock, together with the agrochemicals needed, may be considered technical since the husbandry requirements may be new to the farming community. The introduction of improved irrigation equipment may also be regarded as a technical measure. Advice may be needed from government agencies, as commercial firms may be slow to develop 34 ClimateCost – WP2B – D1 products in these areas, waiting instead to see if markets can be established before committing resources to product development and promulgation. Extensive breeding and testing programmes may be necessary to identify cultivars and breeds appropriate to changing local conditions. INFRASTRUCTURAL MEASURES Infrastructural measures will vary greatly in scale and expense, but all will require an element of capital investment. The introduction of on-farm harvesting and storage of rainwater is one example of such a measure. While the necessary capital outlay may appear modest (e.g. adding guttering to the roofs of farm buildings and collecting water in an earth-banked reservoir), farm incomes and profits in many parts of the EU are not currently sufficient to finance such a measure. A second example is the encouragement of farmers to effectively manage flood plains. This is likely to need public support investment to provide incentives for them to relinquish current practices in riparian zones and adopt protective measures. The re-creation of water meadows may require a farm currently devoted to arable production to invest in the establishment of a livestock enterprise. 3.6 Treatment of sectoral inter-linkages The sectoral inter-linkages are very limited in previous studies. The inter-linkage of water, land use and agriculture will be a major contribution of WP2B in ClimateCost. 4 4.1 Possible research strategy for ClimateCost Planned methods of analysis for the ClimateCost study Table 8 summarises the approach. Table 8 Key issues in the approach for impact assessment in this study Key issues Approach in this study Objectives Impact quantification including strategies to minimize impacts Agricultural models driven by changes in climate, ware availability, socio economic conditions and adapted management Drivers of agricultural Climate and socio-economic factors (global climate models and change SRES scenarios) Current vulnerability to Response to extreme events and underlying causes of impacts in climate and extreme current systems events Validation of the modelling tools under current conditions Adaptation Integrated from the onset as part of the input definition of the system in the agricultural models 35 ClimateCost – WP2B – D1 The agricultural production estimates will incorporate some major improvements: Contributing to the economics of adaptation Looking at the energy policy effects Variability effects, ecosystems Consistent crop simulation methodology and climate change scenarios Consistent foundation for estimation of water supply and demand Quantitative foundation for estimation of physiological CO2 effects on crop yields Adaptation explicitly considered (social vulnerability and adaptive capacity) Weighting of model site results by contribution to regional and national, and rainfed and irrigated production The production functions under the climate change scenarios to be used for the monetary estimates will be obtained with the following steps: Determining crop responses at the site level, crop yield and water demand will be estimated Estimating crop production functions at the regional level that takes into account water supply and demand, social vulnerability and adaptive capacity. Crop production functions will be used as inputs for the monetary evaluation. Some of the key innovations of the study include treatment of adaptation and integration of land use and water impacts into the evaluation. THE CHOICES FOR AGRICULTURAL ADAPTATION While most adaptation to climate change will ultimately be characterised by responses at the farm level, encouragement of response by policy affects the speed and extent of adoption. Most major adaptations may require 10 to 20 years to implement. Two broad types of adaptation are considered here: farm-based adaptation and policy adaptation. Farm based adaptation includes changes in crops or crop management. Table 13 outlines examples of farm based adaptation measures that will be evaluated. All measures may contribute to adapt to climate change but in many cases may have other negative effects, such as environmental damage. Policy based adaptation creates synergies with the farmers’ responses particularly in countries where education of the rural population is limited. Agricultural research to test the robustness of alternative farming strategies and development of new crop varieties are also among the policy based measures with a potential for being effective in the future. CURRENT ADAPTIVE CAPACITY The development of adaptation scenarios should include stakeholder participation since the stakeholders are both the demand-drivers and the end-users of vulnerability analysis. Stakeholders include a wide range of people ranging from local and national policy-makers to individual land managers, such as farmers. 36 ClimateCost – WP2B – D1 The essential first step for evaluating future adaptation is to characterize current adaptive capacity in order to determine the challenges and opportunities for future management. Table 9 summarizes the categories and indicators of adaptive capacity attributes. Table 9 Categories and indicators of adaptive capacity Coping capacity category Environmental Economic Social Indicators - Resource base : Water supply; soil quality and diversity; land size and distribution; land unmanaged; population density - Risk: Variability of the current climate and extreme events - Resource base: Land tenure and size; financial capital; material equipment and machinery; animals; GDP per capita - Risk: Variability in production; variability in input and output prices - Financial resources: Access to formal and informal credit - Diversity: Diversity of the agricultural system (seeds available and used and number of crops planted); diversity of income sources (agriculture, livestock, off-farm and non-farm) - Variability in the rural economy: Migration; land sales, land rental - Agricultural innovation and information dissemination: Public expenditure in agricultural research and extension / population; technological gap for cereal production - Resource base: Population in the workforce; education; age; gender - Support programs: Technology transfer; technical assistance - Social programs: Emergency welfare programs; social services - Economic capacity: GDP per capita. - Human and civic resources: % population in the workforce; % population with literacy level. - Agricultural innovation and information dissemination: Public expenditure in agricultural research and extension/population; Technological gap for cereal production. - Renewable natural capital: Population density; % land unmanaged. W ATER Areas exposed to drought and water scarcity are very sensitive to climate change, because the current high degrees of water resources use, the imperative need to allocate more water for environmental uses and the narrow margin which is available to improve water availability. Climate change in these regions is perceived as an intensification of existing pressures, which will imply strong reductions in water availability and further increases in water demand. This will lead to the intensification of water management conflicts, due to the competition for water among different social agents and the degradation of water quality through the alteration of the hydrological cycle. In some regions, current water uses cannot be maintained in the future. If climate predictions are right, reductions of up to 50% of average annual runoff will lead to a deep crisis of the whole socioeconomic model, based largely on highly productive agriculture and tourism industries. The solution to those problems will imply profound social changes, progressive reduction of water demand and reallocation of water availability to those uses that are deemed socially as more appropriate. 37 ClimateCost – WP2B – D1 In water scarcity regions, the impacts of climate change on natural resources will affect water uses through water resource systems, which perform functions of regulation, transportation and distribution of water resources. In these regions, water resources systems are highly developed and they have achieved a profound transformation of the natural characteristics of water resources to accommodate the needs of demands. Hydraulic infrastructure plays a critical role to make water available to users by overcoming the spatial and temporal irregularities of the natural regimes. The goal is to provide adequate reliability in water supply to users through water abstraction, storage, transportation, and distribution. T The alteration of natural systems is larger in areas with less and more irregular water resources. Prolonged absence of precipitation and soil moisture deficits do not necessarily mean water scarcity in these water resources systems, because water can also be supplied from natural or artificial reservoirs: snow pack, aquifers, and regulation dams can sustain water demands during periods of meteorological drought. Traditionally, water managers have designed these systems to overcome drought situations. The degree at which droughts produce impacts in water resources systems is analyzed with the help of water resources systems models, and it depends on the relation between available resources and demands. System modellers estimate demand reliability, quantified as the probability that a given demand may suffer water shortages during a given time horizon. This reliability index is normally used for decision making, identifying demands that do not comply with a pre-specified minimum standard, in order to evaluate the effect of water conservation or yield enhancement actions for these demands, and defining the measures to correct the reliability deficit. Three factors are at play in regulated water resource systems: streamflow variability, storage capacity and yield reliability. These are usually linked through storage-yieldperformance characteristics, which describe how a system is able to supply its demands and with what reliability. There is a wide range of techniques which can be applied for this purpose, from relatively simple regression functions relating these variables to highly complex water resource systems models. Usually, these complex simulation or optimization models are used by water resources engineers in areas prone to water scarcity. The result of the analysis is an estimation of the reliability of supply for each demand present in the system. The availability of reservoir storage for regulation of natural resources is an indicator of robustness to climate changes, especially in the case of within-year regulation systems. If streamflow variability remained constant, the percentage reduction of available water resources in systems with adequate reservoir storage volume would be less than the percentage reduction of natural river discharge. Systems with small regulation capacity, or systems with an excess of it, show a poorer response to reduced streamflow. In the first case, the lack of reaction is due to the lack of flexibility of the regulation system, and a given percentage reduction of river discharge results in an almost equal reduction of available water resources. In the second case, the lack of reaction is due to the exhaustion of the regulation capacity of the basin, where almost a 100% of natural resources are made available. 38 ClimateCost – WP2B – D1 If, in addition to a reduction of average values, a change of seasonal or interannual variability is expected, the performance of the regulation system may experience major changes. Water resources simulation models may be too complex for this type of analysis, because they require very detailed information of naturalised streamflow series in each scenario, and they include a representation of system demands which may change over time as a result of adaptation measures. In the context of Climate Cost, it is beyond the objectives of the project to collect detailed data on selected basins in the area of study and perform simulations under climate change scenarios to obtain restrictions on the social system imposed to water availability. A possible alternative is the application of generalized storage–yield performance relationships, like the Gould-Gamma model (McMahon, 1993). These relationships provide a method to analyze the storage–yield problem using simple input factors such as the coefficient of variation of streamflow and the required system reliability. Adeloye et al., 2003 use the methodology to derive storage–yield curves for no failure (100% reliability) in several locations in the world. If an estimation of the climatic change of annual flow and coefficient of variation is available for these locations (inferred from results of GCMs), the methodology would allow for the estimation of water availability under different reliability requirements. This would be a relevant input to proceed with the analysis of future socioeconomic scenarios. Another factor that may contribute to mitigate or intensify impacts of climate change on water resources in semiarid regions is management of the water resources system. Adequate rules for management of irrigation systems under drought conditions can significantly offset the reduction in natural inputs. The measures of demand management can also achieve a progressive reduction of the needs far greater than the reduction of available water supply which occurs naturally as a result of climate change. This requires a coordinated series of actions in terms of awareness and education, investment in conservation, maintenance and improvement of facilities, establishment of rules for exchanging water rights and increasing the flexibility of the operation of the water resource system. 39 ClimateCost – WP2B – D1 4.2 Potential input to the integrated models and CGMs Summarising, (at least) three different information sets are needed: the first to build the baseline(s) (without-climate-change-impacts) scenario, the second to quantify climate change impacts without adaptation, the third to determine climate change impacts with adaptation. To be completed after discussion with the leader of WP2 Table 10 Data requirements and format Model ICES GEM3 Impacted economic variable Land quality (productivity) % change in 2 major crops productivity Land quantity Data format % of land loss to Baseline construction, relevant data can be desertification expressed in yearly % changes (for each year within the period 2001-2050) For the climate change scenarios, relevant data can be expressed in yearly basis in terms of % changes with respect to that year baseline value. Region specific data: USA, Europe 15, Europe 10, Korea-South Africa, CanadaJapan-Australia-New Zealand, Middle EastNorth Africa, Sub Saharan Africa, South Asia, China, East Asia, Latin and Central America. % change in 2 major crops productivity, biofuels 1 and 2 and biodiesel GCE IAM (PAGE 09) 40 % change in 2 major crops productivity Baseline and scenario rages ClimateCost – WP2B – D1 5 References Antle JM, Capalbo SM (2001) Econometric-Process Models for Integrated Assessment of Agricultural Production Systems. American Journal of Agricultural Economics 83(2):389-401 Arnell NW (2004) Climate change and global water resources: SRES emissions and socio-economic scenarios. Global Environmental Change, 14(1), 31-52 Barnett TP, Adam JC, Lettenmaier DP (2005) Potential impacts of a warming climate on water availability in snow-dominated regions. Nature, 438, 303-309 Beniston M (2003) Climatic change in mountain regions: A review of possible impacts. 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