Transcript Slide 1

Climate Change:
Pro-poor Adaptation,
Risk Management,
and Mitigation
Mark W. Rosegrant
Director
Environment and Production
Technology Division
Outline
• Climate Change and Variability Impacts on
Agriculture and the Poor
• Pro-poor Mitigation: Constraints and
Opportunities
• Investing in Climate Change for the Poor
CLIMATE CHANGE AND
VARIABILITY IMPACTS
Impacts and Vulnerability to
Climate Change and Variability
• Rich countries emit majority of greenhouse gas
(GHG)
• Poor countries are more vulnerable
– Geography (hotter, less rain, more variation)
– Greater dependence on agriculture and natural
resources
– Limited infrastructure and low-input agriculture
– Low income, poverty and malnutrition
– Thus, lower adaptive capacity (also including inadequate
complementary services, like health and education)
Geographical Distribution of Vulnerability, 2100
with and without mitigation along an A2 emissions scenario
with a climate sensitivity of 5.5°C
Source: Yohe et al. (2006)
PRO-POOR MITIGATION:
CONSTRAINTS AND OPPORTUNITIES
Why Mitigation?
Mitigation and adaptation are both essential.
• Human-caused climate change is already occurring
• Adaptation efforts are already taking place and must be
expanded
• But adaptation becomes costlier and less effective as the
magnitude of climate changes grows
• The greater the amount of mitigation that can be achieved at
affordable cost, the smaller the burdens placed on adaptation
and the smaller the suffering
• Effective mitigation generates income in rural areas, increasing
adaptive capacity
Pro-Poor Climate Mitigation Policy
• Climate change policy can generate income for
small farmers and investment flows for rural
communities
• Requires effective integration from global
governance of carbon trading, to sectoral and
micro-level design of markets and contracts, and
investment in community management
Estimated Potential Emission Savings and
Costs by Sector
Sector
2050 Annual
Emissions Savings
(GtCO2)
Average Annual
Cost($/tCO2)
~2025-2050
Deforestation
3.5-5.0
2
Afforestation and
Reforestation
1.0-2.0
5-15
Land management practices
1.0-2.0
20-27
1.0
27
2.0-3.0
25
Waste and fugitive emissions,
industrial processes
4.1
3-5
Fossil fuel related, excluding
bioenergy
40.0
22-33
Agriculture (methane & nitrous
oxide)
Bioenergy
Source: Adapted from various estimates, Stern Review, pp. 244-263
CDM Conditions for Offset Projects –
High Transaction Costs
1.
Additionality
–
2.
Measurable
–
3.
Carbon sequestration or emission reductions of projects must be
quantifiable ex-ante and monitorable ex-post
Permanence
–
4.
Must demonstrate that carbon sequestration or emission reductions
would not have occurred if it were not for the incentives provided by
CDM
Sequestered carbon must remain sequestered indefinitely (or for at
least as long as to be equivalent to reducing atmospheric GHG by
emission reductions)
Leakage prevention
–
Prevent (or account for) direct or indirect GHG emissions from CC
mitigation project
CDM Conditions for Offset Projects –
High Transaction Costs
5. Social benefits
– Evidence of contribution to a country’s sustainable development
– If cost-effective and practicable social benefits should be
quantified, verified and certified together with the carbon
sequestration or emission reductions
6.
Environmental benefits
– Carbon project with inherent local environmental benefits stands a
higher chance of being sustained in the long run
7.
Cost effectiveness
– Land Use, Land Use Change and Forestry activities and monitoring
must be cost effective and practical if they are to be applied
Constraints to Pro-Poor Mitigation
1. High transaction costs of Clean Development
Mechanism (CDM) Conditions for Offset Projects in
Developing Countries
–
Information about carbon benefits to potential buyers,
obtaining information about project partners, organizing
project participants, capacity building and ensuring parties
fulfill their obligations
–
Transaction costs per unit of emission reduction are higher
for projects involving many smallholders and forest
communities
–
Projects with smaller land areas may lack economies of
scale
Constraints to Pro-Poor Mitigation
2. Carbon sequestration from soil carbon and avoided
deforestation––important areas for climate
mitigation and for poor developing countries––are
excluded from CDM
3. CDM-eligible assets from afforestation and
reforestation are excluded from European UnionEmissions Trading Scheme
Expanding Pro-Poor Mitigation
1. Establish international capacity building and
advisory services (public-private partnerships)
–
Capacity-building and advisory services for potential
investors, project designers and managers, national
policymakers and leaders of local organizations and
federations
–
Establish regional centers to assist countries and
communities involved in forest carbon trading, soil
carbon sequestration, others
Measures to Reduce Transaction Costs
2. Institutional innovations
– Companies or agencies offer specialized business services
for low-income producers
• e.g. in negotiating deals or design of monitoring systems
– Locally accountable intermediary organizations can manage
projects and mediate between investors and local people
• e.g. local environmental group in the Scolel-Té project, Mexico
– Transaction costs reduced by developing carbon projects in
communities with active local organizations in place
• e.g. a proposed carbon project in Harda, India, relies on existing hamlet
and federation institutions established for community forestry
Measures to Reduce Transaction Costs
3. Simplified standards (baseline and monitoring) for
small-scale projects
–
Agroforestry and community forestry projects should be
specified as eligible for simplified modalities
–
Simplified emission reduction credits calculated using
standardized reference emission rates for agroforestry and
forestry activities in specific locations, determined and
verified by independent bodies
–
Similar for soil carbon sequestration
Measures to Reduce Transaction Costs
4. Adequately dealing with permanence issue of
carbon sequestration
–
Ton-year approach: Payment for mass-time units of
carbon avoids the need for "locking up" land in forest
land uses for prolonged periods because credits are
calculated according to carbon storage duration
–
Shorter term contracts also viable
Example: Chicago Climate Exchange
Agricultural Soil Carbon Offsets
• Simple, standardized rules for issuing credits for agricultural
carbon emission reduction and soil sequestration
• Offset projects involving less than 10,000 mt CO2 equivalent per
year register and sell through Offset Aggregator
• Eligible projects include continuous conservation tillage and grass
planting
– 5-year contractual commitment to continuous no-till or strip till
(conservation tillage) on enrolled acres
– Tillage practice must leave at least two-thirds of the soil surface
undisturbed and at least two-thirds of the residue remaining on the
field surface
– CCX contracts issued for conservation tillage at a rate between 0.2 and
0.6 metric tons CO2 per acre per year based on carbon sequestration
ability of the soils
Investing in Climate Change for the Poor
• Climate change policy can create new value-added for
pro-poor investment
• Increases profitability of environmentally sustainable
practices
• Need to streamline measurement and enforcement of
offsets, financial flows, and carbon credits for investors
• Enhance global financial facilities and governance to
simplify rules and increase and manage funding flows
for mitigation in developing countries