Download Impacts of Global Climate Change on New Zealand Agriculture

NZAGRC FACTSHEET 2
Impacts of Global Climate Change on
New Zealand Agriculture
Just as the New Zealand economy is sensitive to international
events, our agricultural sector is susceptible to impacts from global
climate change. Some will be direct – such as climatic impacts on
domestic agricultural production, or domestic climate policies – but
further, indirect impacts could come from overseas, via trade, such
as climate-induced production shifts, global greenhouse gas (GHG)
mitigation measures, consumer perceptions and reputational
issues.
Not all those impacts will be negative: many climate impacts and
responses overseas – such as increased demand, higher returns,
competitive advantage and smart marketing – could all help to offset,
even outweigh, domestic weather impacts and emissions mitigation
costs. This fact sheet summarises what we currently know about these
multiple influences, and how they can inform New Zealand’s response to
climate change.
“A threefold challenge now faces the world: Match the rapidly changing
demand for food from a larger and more affluent population to its
supply; do so in ways that are environmentally and socially sustainable;
and ensure that the world’s poorest people are no longer hungry.”
Source: Godfray et al., Food Security: The Challenge of Feeding 9 Billion People, Science, 2010
A hungrier world
Global distribution of undernourishment
If, as projected, the world’s
population reaches about nine billion
by 2050, the UN Food and Agriculture
Organisation (FAO) estimates global
food production will need to increase
by some 70 per cent.
Food security is already a major
problem. As of 2011, an estimated 925
million people – almost one in seven
– were considered malnourished.
The FAO also found that a further
two billion suffer what it calls ‘hidden
hunger’. While not malnourished,
they cannot access an optimum diet,
and suffer adverse health effects
from poor nutrition.
Source: World Bank Development Indicators, data for 2008
Global Population Growth Rates
Each day, another 200,000 people
are added to global food demand.
Meanwhile, in emerging economies
such as India and China, rising
wealth drives a burgeoning market
for higher protein food. Between 1980
and 2002, FAO statistics show annual
meat consumption in the developing
world tripled, from 47 to 137 million
tonnes, and this is projected to rise
further to more than 200 million
tonnes by 2030, and more than 300
million tonnes by 2050.
carbon dioxide (CO2) – one of the
ways agriculture contributes to
GHG emissions while at the same
time being affected by any changes
in the future climate. Predicted
changes in the climate are expected
to hamper food production in some
regions already struggling to attain
food self-sufficiency, driving them
deeper into a cycle of importation
and indebtedness. Other regions and
nations, however, will suffer lighter
impacts.
Food exporters such as New Zealand
stand to benefit from increasing food
demand. Our agricultural exports
already feed an estimated 20 million
people, but the industry’s stated aim
is to double export production over
the next decade.
Source: World Bank Development Indicators, based on average 200-2010
Trends in total food demand by world region
8,000,000
7,000,000
total food demand (kCal)
Much of that boom in increased
livestock production took place on
deforested land. Such clearance is
estimated to be responsible for some
nine per cent of global greenhouse
gas emissions annually; mostly of
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
2060
Year
sub-Saharan Africa
Near East
Latin America and Caribbean
South Asia
East Asia
Industrial countries
Transition countries
Source: FAO, 2006
Page 2
Market forces
There is broad consensus among the
global science community that continued
greenhouse gas emissions will result
in global climate change, with rising
average temperatures, more climatic
extremes, such as heat waves and
drought, and changes in rainfall patterns.
If such climate changes drive agricultural
productivity overseas down, or costs up
– either directly through climatic effects,
or indirectly through constraints on
GHG emissions, nitrogen leaching and/
or land clearance – it could further drive
up international commodity prices. That
in turn would benefit NZ farmers and
agricultural exports.
Such benefits are difficult to quantify, but
studies of yields of major commodity crops
found that trends in climate variability and
change between 1980 to 2008 reduced
global maize and wheat production,
relative to what could have been achieved
if the climate were not changing, mainly
due to the greater incidence of extremely
hot conditions during the growing season.
For example, the European heat wave of
2003 resulted in maize yields falling by
30 per cent or more in France and parts
of Italy. Under unmitigated climate change
and Atmosphere (NIWA) indicate that our
scenarios, such heat wave conditions are
weather patterns will change as a result
forecast to become the norm in Europe by
of global climate change, for example,
mid-century.
drought risk is expected to increase in
Agricultural
commodity
prices
are
extremely sensitive to quantity: in January
Climate changes [...]
could further drive up
international commodity
prices. That in turn
would benefit New
Zealand farmers and
agricultural exports.
2011, after floods in Australia and storms in
the United States forced meat processors
some areas.
Generally
though,
changes
here
are
projected to be less severe than those
experienced
by
some
major
food-
producing regions overseas. So, with
an increasing demand, and the forecast
that climate change could put increasing
pressure on food production in other parts
of the world, New Zealand farmers could
well have greater opportunities to leverage
their already high efficiency.
Amid
interactions
with
many
other
economic drivers, the benefits from such
opportunities remain uncertain. However,
current studies indicate that New Zealand
in those countries to close, the New
farmers would benefit from production
Zealand commodity price index hit record
losses caused by predicted climate change
highs on the back of an unprecedented 10
in other world regions. This could offset
per cent hike in the price of bull beef.
revenues lost to any domestic impacts of
Trends in climate variability and change
will
affect
New
Zealand
producers.
climate change, or emissions mitigation,
here in New Zealand.
Modelling by the National Institute of Water
Page 3
Most primary industry sectors – meat and wool, dairy,
arable, horticulture, viticulture and forestry, will experience
changes in productivity and relative profitability. These
changes will test the adaptability of farmers, and could
shift production zones within New Zealand.
A changeable domestic forecast
Climate change, as projected by NIWA for
New Zealand, will bring mixed prospects
for farmers. Modelling has indicated that,
under the most likely scenario, western
and southern regions of New Zealand
will largely receive more rain and warmer
temperatures. However, drought frequency
could double – or even triple – by 2040 in
eastern and northern regions, although
the range of possible outcomes is large.
Under what is considered to be a less
likely projection, most of New Zealand
would become more arid by the middle of
this century. If droughts do become more
frequent, water security in regions such
as Canterbury, Marlborough, Hawke’s
Bay, Waikato and Northland could become
an issue. Drought has a profound effect
on primary producers – the 2007-2008
drought cost around $2.8 billion in lost
production.
Changes in temperature and rainfall
patterns may also alter the spread
and distribution of existing pests and
diseases, and enable the emergence of
new diseases. Increased temperatures
may also influence individual animal
productivity. For example, cattle have an
optimal temperature range – estimated to
be up to about 25°C – beyond which they
suffer negative responses. By the 2040s,
under a mid-range scenario of global
greenhouse gas emissions, the number of
days with peak temperatures above 25°C
in the northern Bay of Plenty, for instance,
is projected to nearly double, to 42 a year.
If, as indicated, climate patterns shift in
the future, it is likely that most primary
industry
dairy,
sectors
arable,
–
meat
horticulture,
and
wool,
viticulture
and forestry, will experience changes
in productivity and relative profitability.
These changes will test the adaptability of
farmers, and could shift production zones
within New Zealand.
But the implications of climate change
go beyond dealing with changes in the
weather. Agriculture is responsible for
almost half of New Zealand’s greenhouse
emissions, and from 2015, under current
government plans, it will be obliged to
begin meeting the costs of some of those
emissions under the Emissions Trading
Scheme (ETS). This will result in reduced
returns for New Zealand farmers, and
impact their profitability and optimal
management strategies.
Page 4
Projected changes in drought frequency across New Zealand
under climate change
New Zealand
Median Drought
Frequency for
2040
% of Time
New Zealand
Historical Drought
Frequency for
1980 - 1990
The changes are based on a mid-range scenario of climate change and global greenhouse gas emissions. Source: Clark et al., 2012, report to Ministry of Primary Industries.
Page 5
Not all of the global
responses to climate
change are negative,
and some are already
delivering gains to New
Zealand. [...] Benefits
to New Zealand from
the global response
to climate change
could go a long way
to offsetting, or even
overpowering, negative
domestic effects.
What goes round, comes round
New Zealand farmers will also be affected
by international climate policy, which
will have important implications through
the global trade in food and livestock
products. These responses, some of which
are already being implemented, bring
potential gains – but also risks – to New
Zealand farmers.
subsidies and mandates have diverted
about 40 per cent of that crop to ethanol
production. Such shifts, which leave a
deficit in food and feed production, can
drive up crop and livestock produce
prices globally, and are thought to have
contributed to the 2007/08 global food
price spike.
Some policies, such as United States
legislation to boost biofuel production,
have already had a positive effect on our
economy. The US currently grows some
60TICper
cent
of world corn exports, but
S
ES
LE IN PR
Modelling suggests that the extra demand
for corn, and reduced livestock production
overseas, will stimulate world meat and
milk prices, encouraging an extra one or
two per cent livestock production in New
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E-mail addr
Likewise, overseas policies to limit
deforestation – and reward afforestation
– will constrain land-clearing for food
production, and thus increase commodity
prices. The Inter-American Development
Bank estimated last year that deforestation
bans in Latin America and the Caribbean
could strip US$12.7 billion worth of
agricultural production from those regions
by 2030.
4
ct
available
tents lists
Zealand. Even that small increase would
add hundreds of millions of dollars to
export earnings.
I
If other countries were to move towards
actively constraining their agricultural
greenhouse gas emissions, this would also
benefit New Zealand, as it would lift global
commodity prices. Since agricultural
production in New Zealand is less
greenhouse-gas intensive than in most
other countries, model studies suggest
that it is better for New Zealand if everybody
mitigates agricultural emissions than if
nobody does, because this would enhance
our competitive advantage.
But it is not just hard costs that will influence
New Zealand’s fortunes. Several major UK
supermarket chains actively promote lowemission products, and are demanding
that suppliers provide information about
the carbon footprint of the goods they sell.
While such market trends could be seen as
risks, they also offer opportunities for lowcarbon wares: just a small preference for
lower-emissions products has been found
to reap significant gains.
Page 6
A strategy for New Zealand Inc.
The net implications of climate change for
New Zealand agriculture, then, are more
complex than purely domestic physical
impacts or domestic climate policies.
The sector faces a multiplicity of issues –
international climate and trade policies,
global production dynamics, unanticipated
effects
and
of
climate
seemingly
policies
unrelated
overseas
economic
initiatives, shifts in consumer perception
challenging, current estimates are that
benefits to New Zealand from the global
response to climate change could go a long
way to offsetting, or even overpowering,
negative domestic effects.
Careful consideration of these complex
dynamics will reveal the best strategy for
New Zealand, and how best to protect and
enhance our environmental reputation.
and preferences, and our international
reputation.
Crucially, not all of them are negative,
and some are already delivering gains
to New Zealand. While quantifying the
net effect of future international impacts
of, and responses to, climate change is
The many links between climate
change and New Zealand
Higher Returns
Increased Demands
Production Shifts
Consumer Perceptions
GHG Mitigation Measures
Competitive Advantage
Smart Marketing
Reputational Issues
Biofuel & Deforestation Mandates
Climate change is expected to affect New Zealand agriculture in multiple ways, both through direct and indirect impacts. While indirect impacts are often harder to quantify,
preliminary indications are that they could be at least as important as direct impacts from climate change and response measures within New Zealand – and some of the
international flow-on effects could be strongly positive.
Page 7
Further Reading
IPCC, 2007: Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment
Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, UK.
IPCC, 2007: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of
the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, UK.
Lobell, D.B., et al., 2011: Climate Trends and Global Crop Production Since 1980. Science. 333(6042), 616-620. World Bank, 2008: A
note on rising food prices. The World Bank, Development Prospects Group, Washington, DC, 20 pp.
Saunders, C., et al., 2009: Impacts of a United States’ biofuel policy on New Zealand’s agricultural sector. Energy Policy. 37(9), 34483454.
Saunders, C., et al., 2009: Modelling Climate Change Impacts on Agriculture and Forestry with the extended LTEM (LincolnTrade and
Environmental Model). Research Report No. 316. Agribusiness and Economics Research Unit, Lincoln University, Lincoln, NZ, 66 pp.
Saunders, C., et al., 2006: Trade liberalisation and greenhouse gas emissions: the case of dairying in the European Union and New
Zealand. Australian Journal of Agricultural and Resource Economics. 50(4), 538-555.
Kaye-Blake, W., et al., 2009: A Review of Research on Economic Impacts of Climate Change. Agribusiness and Economics Research
Unit, Lincoln University, Lincoln, 48 pp.
Stroombergen, A. (2010) The International Effects of Climate Change on Agricultural Commodity Prices, and the Wider Effects on
New Zealand. Motu, Wellington, New Zealand. Motu Working Paper 10-14, pp37.
Reisinger, A., A. Stroombergen (2011) Implications of alternative metrics to account for non-CO2 GHG emissions. Ministry of
Agriculture and Forestry, Wellington, NZ. pp88.
Vosti, S., et al., 2011: Agricultural Greenhouse Gas Emissions in Latin America and the Caribbean. Discussion paper No. IDBDP-167. Inter-American Development Bank, Washington, DC, 62 pp.
Clark, A.; Mullan, A.B.; Porteous, A., 2011: Scenarios of regional drought under climate change. NIWA Client Report WLG2010-32 for
Ministry of Agriculture and Forestry. 135 pp.
Published November 2012
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