* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Crop yield simulation
Myron Ebell wikipedia , lookup
Instrumental temperature record wikipedia , lookup
Global warming controversy wikipedia , lookup
Fred Singer wikipedia , lookup
German Climate Action Plan 2050 wikipedia , lookup
Economics of climate change mitigation wikipedia , lookup
Michael E. Mann wikipedia , lookup
2009 United Nations Climate Change Conference wikipedia , lookup
Soon and Baliunas controversy wikipedia , lookup
Climatic Research Unit email controversy wikipedia , lookup
Global warming wikipedia , lookup
Climate change feedback wikipedia , lookup
Heaven and Earth (book) wikipedia , lookup
ExxonMobil climate change controversy wikipedia , lookup
General circulation model wikipedia , lookup
Effects of global warming on human health wikipedia , lookup
Climatic Research Unit documents wikipedia , lookup
Climate change denial wikipedia , lookup
Climate resilience wikipedia , lookup
Climate sensitivity wikipedia , lookup
Climate change in Saskatchewan wikipedia , lookup
Climate change in Australia wikipedia , lookup
Climate engineering wikipedia , lookup
Politics of global warming wikipedia , lookup
United Nations Framework Convention on Climate Change wikipedia , lookup
Effects of global warming wikipedia , lookup
Attribution of recent climate change wikipedia , lookup
Climate governance wikipedia , lookup
Citizens' Climate Lobby wikipedia , lookup
Solar radiation management wikipedia , lookup
Economics of global warming wikipedia , lookup
Carbon Pollution Reduction Scheme wikipedia , lookup
Climate change in Tuvalu wikipedia , lookup
Climate change in the United States wikipedia , lookup
Media coverage of global warming wikipedia , lookup
Scientific opinion on climate change wikipedia , lookup
Public opinion on global warming wikipedia , lookup
Effects of global warming on humans wikipedia , lookup
Climate change and agriculture wikipedia , lookup
IPCC Fourth Assessment Report wikipedia , lookup
Surveys of scientists' views on climate change wikipedia , lookup
Climate change, industry and society wikipedia , lookup
ECONOMIC ANALYSIS OF ADAPTATION STRATEGIES TO CLIMATE CHANGE: A COST BENEFIT ANALYSIS Relebohile Letele Bureau of Statistics (BOS), BOX 455 Maseru 100 Ministry of Development Planning Mpilo road Maseru, Lesotho [email protected] ABSTRACT Climate change poses threats to the agricultural sector and negatively affects subsistence farmers who have a low adaptive capacity. Therefore adaptation capacity is needed to counteract the impacts of climate change. However, while adaptation is considered crucial for addressing potential challenges of current variability and future climate change, there are many knowledge gaps in the assessment of the cost and benefits of adaptation to climate change in the agricultural sector. There is thus a need to build capacity, particularly on fine-tuning methodologies to understand a range of estimates and trade-offs related to local level adaptation to climate change. This thesis presents an economic analysis of adaptation to climate change. This study draws on the existing literature on best strategies and tailors its use on testing local level economic methods for analysis of adaptation projects. The thesis focuses on the exploration of CostBenefit Analysis of adaptation options to climate change in order to provide comprehensive evidence for policy makers. Three main methods of economic analysis namely; Net present value (NPV), Benefit-Cost ratio (BCR) and internal rate of return (IRR), were used for each of the adaptation strategies. The results of this thesis show that farmers who practice late planting and recommended fertilizer amount in the context of climate change are the ones who will get the highest crop production more than farmers who practice early planting and common fertilizer. Therefore this study recommends that farmers in Maphutseng should adapt late planting and recommended fertilizer amount in order to protect themselves from the negative impacts of climate change. Keywords: Climate change, climate change adaptation, Lesotho, Maphutseng, cost-benefit analysis. 1. Impacts of climate change According to Cline et.al agricultural production remains the main source of livelihood for rural communities in Africa, providing employment to more than 60 percent of the population and contributing about 30 percent of gross domestic product. According to Scoones and Thompson (2009), agriculture is an important source of livelihoods in developing countries, providing ways of life for billions of people, many of them poor. In Lesotho, climate conditions and variations influence agricultural output and export potential because agricultural production is primarily rainfed and is vulnerable to extreme weather events. Extreme events are themselves catalysts of environmental change, (Hutchinson, et.al 2009). Many studies such Kurukulasuriya and Mendelsohn (2007); Lecocq and Shalizi (2007); Maddison (2007) have indicated that as climate change is likely to further reduce agricultural productivity. With likely long-term changes in rainfall patterns and shifting temperature zones, climate change is expected to significantly affect agricultural production in the Southern African region and this could be detrimental to the region’s food security and economic growth. The fourth Intergovernmental Panel on Climate Change (IPCC) states that yields from rain fed agriculture could be reduced by up to fifty percent by 2020 (IPCC 2007,p.13) . Climate change is also likely to have a negative implication for gross domestic product (GDP). Developing countries like Lesotho are particularly vulnerable to global warming. Mendelsohn (2011) argues that these countries tend to have a disproportionate share of their GDP in climate sensitive sector, especially agriculture. They will consequently have higher impacts as a fraction of their GDP. They are also more vulnerable because they have weak governments. It is not clear that many of the governments of developing countries are capable of mounting effective public programs to counteract climate impacts. Governments of many developing countries may be particularly ineffective in adapting to climate change. Many developing countries also have weak markets. The absence of property rights will discourage many private actors (firms and households) from adapting efficiently as well. 2. Climate change adaptation In terms of climate change, adaptation can be taken to be any change in behaviour that an actor such as household, firms, or government makes to reduce the harm or increase the gains from climate change. In this vein, efficient adaptations are the set of adaptations that maximise net benefits. However not every adaptation is worthwhile. The only adaptations that are desirable are worthwhile and are those whose benefit of a change exceeds the costs. Such adaptations should be encouraged. Whether any specific change is worthwhile will depend on where it is done and when it is done. Getting both the local conditions right and the timing is crucial. Chambwera and Stage (2010) relates adaptation to climate change as an economic problem because it addresses the bigger problem of allocating scarce resources to attain sustainable development. Ignoring climate change by not building adaptive measures could eventually damage economic growth and other aspects of human and natural wellbeing, and threaten to reverse the gains made in these areas in the past. The risks posed by climate change to development will be managed more efficiently by putting them in the mainstream of development. An economic analysis is necessary to determine whether or not it is worthwhile doing any adaptation at all. An Economic analysis of adaptation to climate change can also be used to prioritise or choose the most appropriate adaptation option. THE STUDY AREA The study was conducted in Maphutseng, in the Mohales Hoek district. The reason for choosing this area is because the study was sponsored by FANRPAN, and FANRPAN had already collaborated with World Vision. This collaborated of a community livelihood database was collected by Lesotho World Vision using the Household Vulnerability Index (HVI) tool. The HIV tool is able to quantity the different households in terms of their vulnerability by various factors. The district consists of smallholder farmers who rely on rainfed crop production for food, therefore likely to be some of those most likely to suffer from climate change. The district is located in summer rainfall area with annual mean rainfall of 714mm, average annual temperature of 15.60C, annual mean maximum temperatures of 22.70C and annual mean minimum temperature of 8.40C. DATA COLLECTION This study is based on data collected via a fresh household survey in Maphutseng. The survey provided information on inputs used by these farmers and their outputs. The questionnaire also captured socio economic characteristics of the households such as household vulnerability, adaptation strategies to climate variability if any, their perception and attitudes to climate change and how it is affecting them in their existing agricultural practices. Households were asked questions on their knowledge of national adaptation strategies to climate change, in addition to assets and credits, and risks they faced and discount rates charged on loans. The questionnaire was pre-tested in an area that will not be covered in the research. The main indicators of adaptation used in the questionnaire include: the choice of adaptation method, capital used in adaptation process, the cost stream over the period they have been using the chosen adaptation measure. This study is both dealing with autonomous adaptation and planned adaptation. Since the main focus of the paper is autonomous adaptation, the analysis was mainly at plot level where these adaptation strategies are implemented. A population list comprising of the households was drawn out. The population list was obtained from the District Agriculture Development Office and World Vision. Systematic sampling technique was used to select a sample of 350 farmers. These farmers were interviewed through a semi-structured questionnaire. The primary data was analyzed through STATA and SPSS (Statistical Package for Social Scientists). Secondary data was collected from literature and crop scenarios were obtained from University of Cape Town (UCT). Climate data that was used to drive the crop model assessments were generated by UCT for the period 2046 -2065. Crop yield simulation This study mostly included the modeling of various scenarios using the DSSAT crop model driven by projections of climate downscaled from 9 Global Circulation Models to assess the impact of climate change on crops in Maphutseng. DSSAT was used for this study as it has a flexible management interface which allows for the assessment of various farm management strategies. DSSAT was run for the control period with currently practiced management strategies. It also simulated future conditions with a “no change” scenario in terms of management driven by projected downscaled climate for the future period (2046 – 2065). Different management strategies were altered to assess how adjustments in management practices can help reduce the impact of climate change or exploit opportunities which may arise as a result of climate change. Management strategies were analyzed separately and possibly in combinations for all adaptation benefits. The model output were statistically analyzed and represented graphically through e.g. Coefficients of Variation (CV), dispersion statistics, Cumulative distribution functions (CDFs) etc. 3. Results of Cost-Benefit Analysis An evaluation result for the CBA results help to determine which adaptation strategy is the optimal one and should be highly encouraged to be adapted. CBA results from table 3.1 confirm that EP with RF is viable. This is mainly because the NPV of 8929.57 was found. That is, the NPV should be greater than zero for an option to be acceptable. This indicates that EP with RF constitutes a good investment opportunity. The BCR of 5.26 for this adaptation strategy indicates that benefits exceed economic costs of this adaptation option under consideration and therefore EP with RF is a viable adaptation option. Table 3.1 Summary of discounted cash flows for farmer who are adopting EP with RF LP with RF NPV 8929.57 11913 BCR 5.26 6 IRR 9000 12000 The comparison of expected cost and benefits can help inform policy makers about the likely efficiency of an adaptation investment. The results in table 3.1 shows that the NPV of LP with RF, which is 9647.83, it’s higher than the NPV in the practice of EP with RF. LP with RF has been supported by literature to be the most efficient strategy to be used by farmers in Maphutseng under the change in future climate. The BCR is 5.26, this indicate that the adaptation strategy is viable. BCR shows the overall value of money of this adaptation strategy. Since this adaptation strategy is greater than one, and then it shows that the adaptation strategy is viable. The results of table 3.1 indicate that farmers who practice LP with RF have the highest NPV than farmers who practice EP with RF. NPVs are used to prioritize allocation of funds. Therefore according to this results LP with RF is the adaptation strategy which can be given the first priority in terms of allocation of funds. It has also been found that farmers who practice LP with RF had the same BCR to farmers who practice EP with RF. Moreover, farmers who practice LP with RF had the highest IRR than farmers who practice EP with RF. This has lead to a conclusion LP with RF is the best adaptation strategy that farmers can use in order to reduce climate change resilience to crop production. This is consistent with expert recommendation and the fact that Lesotho is going to benefit from a warmer climate, since Lesotho is experiencing a cold climate, therefore planting late is therefore beneficial as there is low risk of early frost and crop failures. It is also considered as the optimal option since summer rains comes late in December, which is beneficial for maize germination. Farmers should therefore be encouraged to practice LP with RF. Therefore extension officers should be trained on issues related to climate change and conservation agricultural issues and informs smallholder farmers on adjusting their cropping systems. Smallholder farmers should therefore be encouraged to adapt to LP with RF in order to maximize their yield. Results of non-adaptors Decreases in projections in mean maize yield have been experienced under CF which is common among subsistence farmers in Maphutseng. Projections have also shown that CF practices will not be suitable for use under a changed climate; therefore farmers are not encouraged to use these common practices under a changed future climate. This supports the literature which states that low fertilizer application results in low yields. Table 3.2 below shows that non-adopters have an NPV of zero and BCR of one when there are 11.94 percent of the farmers practicing EP with CF and 13.29 percent of the farmers practicing LP with CF. When more than 11.94 percent of the farmers practice EP with CF then the NPV becomes less than zero and the BCR becomes less than one, which would therefore be undesirable. Likewise, when there are 13.29 percent of the farmers practice LP with CF, the NPV becomes less than zero and the BCR becomes less than one, which shows that this practice undesirable. The discounted cash flows will be found in annex 2. However, according to these results, late planting has been projected to give slightly higher yields than farmers who practice early planting. This means that LP is still projected to give good yields with climate change; this practice could have performed better if CF was not combined with this strategy, but rather LP with RF could have been the optimal option. Table 3.2: Discounted cash flows for Farmers who are not adapting EP with CF LP with CF NPV 0 0 BCR 1 1 2862 3226 IRR Table 3.2 above shows that non-adopters have an NPV of zero and BCR of one when there are 11.94 percent of the farmers practicing EP with CF and 13.29 percent of the farmers practicing LP with CF. When more than 11.94 percent of the farmers practice EP with CF then the NPV becomes less than zero and the BCR becomes less than one, which would therefore be undesirable. Likewise, when there are 13.29 percent of the farmers who practice LP with CF, the NPV becomes less than zero and the BCR becomes less than one, which shows that this is undesirable. REFERENCES Chambwera M. and Stage J. (2010), Climate change adaptation in developing countries: issues and perspectives for economic analysis, Journal of Environmental Economics. Mendelsohn R. (2011), The Economics of adaptation to Climate Change in Developing countries. Kurukulasuriya P. and Mendelsohn R. (2007). Endogenous Irrigation: The Impact of Climate Change in Africa, World Bank Policy Research Paper 4278. Lecocq F. and Shalizi Z. (2007), Balancing expenditures on mitigation of an adaptation to climate change: An exploration of Issues Relevant to Developing Countries, Journal of World Bank Policy research working paper 4299. Maddison D. (2007), The Perception of an Adaptation to climate Change in Africa, World Bank Policy Research Working Paper 4308. IPCC (Intergovernmental Panel on Climate change) (2007), Summary for policy makers, In: Canziani O.F., Hanson C.E., Linden P.J and Parry M.L. (eds). Climate Change 2007: Adaptation and Vulnerability, Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge, UK, 7-22. Scoones I. and Thompson J. (2009), Addressing the dynamics of agri-food systems: an emerging agenda for social science research, Journal of Environmental Science and Policy 12 (2009) 386397.