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AGRIMONITOR AND CLIMATE CHANGE Tim Josling Presentation to IDB group, 11/14/14 1 Premises • AGRIMONITOR is up and running • Provides more information on polices in LAC than hitherto available in convenient, comparable form • Agricultural policy has a broad set of objectives and constraints – – – – Food Security Competitiveness Integration Climate change • Next step is to develop AGRIMONITOR as a tool to address these new issues as well as the information needed for more traditional policy analysis 2 Contents • Conceptual Framework • Two stage approach • Baseline GHG emissions in AGRIMONITOR • Example • Mitigation and Adaptation Policies • Issues to be resolved Presentation to IDB group, 11/14/14 3 Conceptual Framework • Crops and livestock products contribute significantly to the emission of Greenhouse gases (GHG), particularly CO2 and Methane • Emissions are in part offset by sequestration • Agricultural policy can influence emissions by impact on cropping patterns and livestock • Climate change mitigation policy can intervene in agricultural production decisions directly by limiting emissions or requiring offsets Presentation to IDB group, 11/14/14 4 Conceptual Framework • Adaptation measures will also become relevant in coming years: resilience also important • Crop yields will be affected by temperature and rainfall variations and extreme weather events associated with climate change • Other impacts will be less direct, such as through pest and disease linkages • Individual governments can help the sector to adjust, or remediation or compensation could be attempted Presentation to IDB group, 11/14/14 5 Conceptual Framework • Mitigation policies require knowledge of GHG emissions from agriculture • Calculations can be made using standard emission factors (EF) and knowledge of current farming practices • Adaptation policies require knowledge of the influence of climate parameters on yields under different farming practices • Calculation of effectiveness of such policies is more complex: have to rely on proxies such as expenditure and policy classification Presentation to IDB group, 11/14/14 6 Conceptual Framework • Link with Agrimonitor is to focus on the GHG emission issue and the “climate friendliness” of agricultural policies • Data on Emission Factors for crops and livestock systems are available • Policy instruments that directly try to influence GHG emissions (mandated offsets, etc.) should be included in the data set • Data can be collected by farming system where necessary (e.g. smallholder vs estate) 7 Conceptual Framework • The link with mitigation and adaptation is through classification of policies • Policies that promote adaptation, through adoption of low-carbon practices, renewable energy, etc. • Policies that help mitigation by "implicitly or explicitly" taxing carbon • Policies that restrict adaptation, such as fossilfuel subsidies Presentation to IDB group, 11/14/14 8 Two stage approach • First stage is to benchmark GHG emission by commodity • Establish relationship between transfers as measured by PSE and GHG emissions • Simplest approach is “allocation” by commodity – 20 percent PSE for bananas and 400 tons of CO2 • Add in those GHG emissions not commodityspecific • Convert emissions to monetary base using carbon price – compare "subsidy" of no carbon cost with other subsidies to producers • Beware of over interpretation and weak causation (policy may not be linked with cause of emission) Presentation to IDB group, 11/14/14 9 Two stage approach • Second stage would be to model policy impacts on farmer decisions, building on PSE database • Derive land use patterns as a result of policy and other factors • Emissions expressed as a by-product of farming practices following policy incentives • More complete accounting of link between policies and emissions possible • Model could be linked to changes in rainfall and temperature expected from climate change • But existence of adequate models for all LAC countries problematic Presentation to IDB group, 11/14/14 10 First stage: Establish Baseline • Insert information into PSE database that relates to climate change – GHG emissions per ha or per ton – Carbon sequestration – Offsets purchased by producers – Abatement measures mandated • Derive net contribution to GHG from crop and aggregate over sector (ACE) Presentation to IDB group, 11/14/14 11 Example • Take three crop example for Jamaica – sugar,bananas and coffee - (numbers made up) • Insert calculations of GHG emissions by crop • Apply to PSE framework • Calculate ACE measure by crop and aggregate over all crops (including GHG emissions not allocable to individual crops) Presentation to IDB group, 11/14/14 12 Example Presentation to IDB group, 11/14/14 13 Example Presentation to IDB group, 2/12/09 14 Mitigation Policies • Categories of policies grouped by mitigation impact – Subsidies for alternative fuels – Conservation and improved efficiency programs – Promotion of sequestration – Current taxes, subsidies and controls on GHG emissions • Expenditures on each of these policies • Relationship with overall support measures Presentation to IDB group, 2/12/09 15 Adaptation Policies • Categories of policies that promote adaptation, resilience and sustainability – Reduce risks associated with climate variability – Improve infrastructure in rural areas to improve resilience – Promote R&D&I in appropriate areas – Improve response to extreme events – Risk management instruments Presentation to IDB group, 2/12/09 16 Map over time and by country • Aggregate expenditure on mitigation to country level • Compare with costs of GHG emissions • Track path of expenditures over recent period (5 years?) • Aggregate expenditure on adaptation policies • Relate to losses from extreme events • Compare experiences across countries Presentation to IDB group, 2/12/09 17 Issues to be resolved • How far to go in linking policy developments with GHG emissions? – Full model of land use and livestock inventory? – Use expenditure as proxies for policy intensity, effectiveness? • How disaggregated to take policy analysis? – Farming system level? – Size of farm? • How far upstream and downstream to go? – Transportation? Processing? Retailing? Presentation to IDB group, 11/14/14 18