CCAFS Science Meeting Item 06 Jeimar Tapasco - Economic framework

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CCAFS Science Meeting presentation by Jeimar Tapasco and Andy Jarvis - Economic analysis for adaptation/mitigation alternatives

CCAFS Science Meeting presentation by Jeimar Tapasco and Andy Jarvis - Economic analysis for adaptation/mitigation alternatives

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  • 1. Economic analysis foradaptation/mitigation alternatives Jeimar Tapasco Andy Jarvis WWW.ciat.cgiar.org Eco-Efficient Agriculture for the Poor
  • 2. Types of costs and benefits (explicit and implicit) :- Direct outlays (explicit)- Partial equilibrium- General equilibrium- Environmental and social Financial costs (outlays) are the most intuitive Eco-Efficient Agriculture for the Poor
  • 3. Financial vs. Economic cost Eco-Efficient Agriculture for the Poor
  • 4. After costs/benefits are identified, then: • Cost Benefit Analysis (CBA) – Basis of comparison for decision-making – Determine if a project, policy, investment is worthwhile OR • Cost Effectiveness Analysis (CEA)* – OUTCOMES* CAE (US$/tCO2eq) Eco-Efficient Agriculture for the Poor
  • 5. Adaptation MitigationCost Benefit Analysis Cost Effectiveness(CBA) Analysis (CEA) •But you can use •But you should be Cost Effectiveness use Cost Benefit Analysis (CEA) to Analysis (CBA) to analyze other calculate net objectives benefits or costs Eco-Efficient Agriculture for the Poor
  • 6. Technicalities:- Uncertainty IPCC Expert Meeting on Economic Analysis, Costing- Social discount rate Methods, and Ethics. Lima, Peru (2011)- First or second best Complications:- Constrained markets (micro-level)- Environmental cost (externalities)- Social cost (they ignore equity issues) Eco-Efficient Agriculture for the Poor
  • 7. Economicefficiency is not the only objective for society. Eco-Efficient Agriculture for the Poor
  • 8. CIAT Work Colombia Eco-Efficient Agriculture for the Poor
  • 9. Business as usual: Agriculture (Colombia) Business as usual: Livestock (Colombia) Eco-Efficient Agriculture for the Poor
  • 10. Identifying alternatives• Expert workshop• Regional workshop with local stakeholders• Consult crop/agricultural federations• Meet with government officials to determine political feasibility• Prioritize – focus on WIN-WIN alternatives• Identify potential barriers (social, cultural, economic) Eco-Efficient Agriculture for the Poor
  • 11. Mitigation and adaptation measures Livestock Rice• Improved irrigation systems • Water efficiency• Silvo- and agro-pastoral systems • Efficient use of N-fertilizers• Testing alternatives to efficient use of N- • Clean Development Mechanism Fertilizer project formulation• Improved pasture • Agricultural insurance programs• Research (focus on animal genetics) • Research (focus on biotechnology) • Land leveling • Improved irrigation systems Eco-Efficient Agriculture for the Poor
  • 12. Direct outlay costMitigation and Adaptation Eco-Efficient Agriculture for the Poor
  • 13. MitigationAdaptation Eco-Efficient Agriculture for the Poor
  • 14. Current policies New policiesMITIGATIONADAPTATION Eco-Efficient Agriculture for the Poor
  • 15. Is it feasible for the private sector to bear the costs of adaptation & mitigation? Eco-Efficient Agriculture for the Poor
  • 16. Cost Effectiveness Analysis Mitigation Eco-Efficient Agriculture for the Poor
  • 17. Potential area, Cost and Potential mitigationfrom alternatives (2012-2040) Carbon Cost Potential Potential area effectiveness Alternative Abatement (ha) ($US/tCO2eq) (Thousand Min Max tCO2eq/year) Silvopastoral systems 3.739.109 28.895 -49 0.6 (SSPi) Improved pasture 51,487 54 -103 -62 Fruits (replacing 359,320 1,938 -188 -25 pasture) Efficient use of N- 170,000 38 -267 145 Fertilizer Eco-Efficient Agriculture for the Poor
  • 18. August15, 2008 Silvopastoral systems: A mini-revolution in Colombia and Central America 13 months October 22, 2008Initial state: July 17, 2007 15 months Eco-Efficient Agriculture for the Poor
  • 19. MAC curve showing the potential CO2e capture for theimplementation of SSPi in different regions of Colombia Eco-Efficient Agriculture for the Poor
  • 20. N-fertilizer on rice Eco-Efficient Agriculture for the Poor
  • 21. Potential CO2e to reduce Potential area Measure (ha) tCO2e/yearLeveling land Cucuta 16,900 197,052Technical assistant Tolima and Huila 67,049 84,785Leveling land Jamundi 5,113 66,812Crop residues management Espinal 13,900 26,271Technical assistant Meta 74,005 14,754Technical assistant Cucuta 11,404 10,161Technical assistant Bajo Cauca 47,346 5,705Technical assistant Casanare and Arauca 64,897 4,726Technical assistant Cesar, Magdalena and Guajira 12,068 4,241Crop residues management Yopal 6,985 3,300Crop residues management Valledupar 3,035 3,278Technical assistant Casanare 13,488 1,934Technical assistant Jamandi 1,300 1,060 Eco-Efficient Agriculture for the Poor
  • 22. MAC curve for more efficient N- fertilizer on rice Eco-Efficient Agriculture for the Poor
  • 23. Work wrong Work well Eco-Efficient Agriculture for the Poor
  • 24. Cost (benefit) -1.000.000 -1.000.000Carbon capture 1 1.000.000 Eco-Efficient Agriculture for the Poor
  • 25. Private perspective Publicperspective Eco-Efficient Agriculture for the Poor
  • 26. CAUTION!! Economic tools must be appropriate for the problem at hand. Eco-Efficient Agriculture for the Poor
  • 27. Others CIAT workOngoing• GIZ / CONANP Mexico (Programming)• ESPA Colombia (Programming)Upcoming• DNP – Colombia (Econometric as input for a GEM)• PNUMA Colombia, Ecuador y Perú (Assessing impact and prioritizing)• FONDO de ADAPTACION Colombia (CBA direct outlays) Eco-Efficient Agriculture for the Poor
  • 28. Some gaps…• More programming work – Better understanding of implication of mitigation and adaptation measures on small farmers• Environmental and social cost• Links between mitigation and adaptation Eco-Efficient Agriculture for the Poor
  • 29. Thanks!j.tapasco@cgiar.org Eco-Efficient Agriculture for the Poor