Transcript Climate change: agriculture and rural development as part

Organisation for Economic Cooperation & Development
Round Table 3: Green Growth and Climate Change
Hsin Huang
Trade and Agriculture Directorate
EastAgri Annual Meetings 2010
Istanbul, 13-14 October 2010
BACKGROUND:
CLIMATE CHANGE AND
AGRICULTURE
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What if we do nothing ?
Projected GHG emissions1 by country/region
(2005-2050, Gt CO2 eq)
Gt CO2 eq
75
Developing country
share total emissions
increasing
70
65
60
55
ROW
BRIC
50
45
40
Rest of OECD
35
30
25
USA
20
15
10
Western
Europe
5
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
1. Excluding emissions from Land Use, Land-Use Change and Forestry.
Source: OECD, ENV-Linkages model.
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Agriculture is important because….
• accounts for about 1/3 of GHG emissions globally
• can be a significant carbon “sink” by building up soilorganic matter
• is a major user of rural land and water resources and
linked to forestry via land use
• food is a necessity (food security concerns) and
• many of the world’s poor are farmers (development
goals)
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Agriculture is unique because …
Climate change has significant but diverse impacts on farming:
location, location, location
• Adaptation is uncertain and economic appraisal difficult
• Mitigation, a range of actions technically possible and
economically feasible
Food security goals
• Policies to encourage a “low carbon” agriculture may impede
the goal of producing more food in the short run, BUT
• Is the real problem the ability to obtain food or the availability
of food – and is this a short or long term issue?
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Challenges
• Provide enough food given pressure on natural
resources
• Encourage farm management practices that reduce
GHGs, sequester carbon, adapt to climate change –
and provide environmental co-benefits
• Take into account externalities through policy
incentives to move agriculture and food consumption
to a “low carbon” path and contribute to “green
growth”
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Policy approaches
Climate Change
• Mitigation: policies to incentivise farmers to reduce
agriculture’s emissions of greenhouse gases and enhance
carbon capture (sequestration)
• Adaptation: policies to incentivise farmers to manage
adaptation to climate change
Green Growth
• a holistic approach that includes climate change and
more general sustainability criteria …
• ecosystem degradation, pollution and nutrient run-off,
water availability, etc.
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Green Growth Policies
• Policies to incentivise the agricultural sector to provide enough
food and generate environmental co-benefits (including
reduction of greenhouse gases)
– Address market failures (impacts that are not priced in the market, e.g.
CO2, pollution)
– Reform/remove environmentally harmful subsidies (e.g. fossil fuel)
– Target policies to achieve environmental objectives more effectively
(biofuels costs $ 960-1700 ton CO2 avoided)
– Facilitate green technologies, innovation, information dissemination
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Green GROWTH?
Panacea to address financial crisis?
– The need to provide sufficient government stimulus to
boost weak demand (“shovel ready projects”)
– More jobs, more growth, less carbon
Cure worse than disease
– Increase costs on weak economy
– Will not increase employment, give up some growth
Both are right and both are wrong
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Green Growth and Innovation
Possible GDP growth pathways
Green growth
g
r
o
w
t
h
Baseline
Years
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Green Growth and subsidies
• Agriculture (in OECD) is highly subsidized
– Support to farmers in 2006-08 23% of gross farm receipts (265 B usd)
– Varies widely by country (Nor, Jpn, Kor vs Aus and Nzl)
– However only a fraction (~25%) is actually retained by farmers (higher
input costs, land/production quotas)
• Subsidies and green growth
– Production linked support dominates (more than ¾)
– Higher production may lead to higher input use with environmental
effects (water, soil, biodiv, ghg)
– e.g. Nitrogen efficiency about 55% (30-80) in OECD … wastefully applied
overwhelming the nitrogen cycle
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What is the role of government?
• Ensure a policy environment that sends clear signals that align
the goals of individual farmers and society
• Build capacity to better understand and measure agriculture’s
contribution to sustainable development
• Implement or reform existing policies and insurance systems to
facilitate adaptation by increasing producer resilience to
climate change while compensating those most vulnerable
• Facilitate research to better inform, design and implement
policy – at the domestic and global levels …
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Which policies?
Producers and consumers need to face the right incentives
– Carbon price, explicitly or implicitly (taxes, cap-andtrade…)
– Policy reform: decoupling of agricultural support from
production, removal of fuel tax subsidies, etc.
– Targeted payments for public goods (e.g. biodiversity,
carbon sequestration)
– Regulations for public bads (e.g. pollution, nutrient runoff)
– R&D/Innovation, advice and information, training to
provide farmers with options
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What do farmers need to do?
Specific to production systems, climate/location –
individual farmers know best the economic tradeoffs given the right policy environment
– Adapt to (inevitable) climate change impacts
– Reduce GHG emissions per unit of production, whist
respecting environment ”sustainable intensification”
– Increase carbon sequestration
– Maximise synergies with other environmental outcomes
(biodiversity, water quality, soil erosion…)
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Main messages
• Ensuring a highly efficient, productive and resilient
agriculture is the key to our future, response to climate
change should be part of an overall effort to achieve
environmental sustainability
• Environmental pressures need immediate attention,
“sustainable intensification” -addressing climate change
is an investment in the future
• The costs and benefits of alternative future scenarios
have not been sufficiently analysed
• Uncertainty about the impact of climate change is a
reason to act
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“Le mieux est l’ennemi du
bien”
Voltaire (1764)
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Agriculture and Climate Change
Trade and Agriculture Directorate
www.oecd.org/agr/env
Contact:
[email protected]
The views expressed in this presentation do not necessarily reflect those of the OECD or its Member countries
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Background slides, not for
main presentation
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Turkey is near OECD average
80%
70%
1986-88
60%
2007-09
50%
40%
30%
20%
10%
0%
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OECD support mainly commodities
40%
35%
30%
25%
20%
15%
10%
Support based on commodity output
5%
0%
Payments based on non-commodity criteria
Payments based on non-current A/An/R/I, production not required
Payments based on non-current A/An/R/I, production required
Payments based on current A/An/R/I, production required
Payments based on input use
Payments based on commodity output
OECD, PSE/CSE database
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Turkey support mostly MPS
Support based on:
% of gross farm receipts
40
35
Miscellaneous
30
Non-commodity criteria
25
Non-current A/An/R/I,
production not required
20
Non-current A/An/R/I,
production required
15
Current A/An/R/I,
production required
10
Input Use
5
Commodity Output
0
OECD, PSE/CSE database
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