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Economic analysis foradaptation/mitigation alternatives                                    Jeimar Tapasco                 ...
Types of costs and benefits        (explicit and implicit) :- Direct outlays (explicit)- Partial equilibrium- General equi...
Financial vs. Economic cost                    Eco-Efficient Agriculture for the Poor
After costs/benefits are identified,                  then:   • Cost Benefit Analysis (CBA)       – Basis of comparison fo...
Adaptation              MitigationCost Benefit Analysis   Cost Effectiveness(CBA)                   Analysis (CEA)  •But y...
Technicalities:- Uncertainty                   IPCC Expert Meeting on                              Economic Analysis, Cost...
Economicefficiency is not       the only objective  for society.       Eco-Efficient Agriculture for the Poor
CIAT Work Colombia            Eco-Efficient Agriculture for the Poor
Business as usual:   Agriculture   (Colombia)   Business as usual: Livestock   (Colombia)      Eco-Efficient Agriculture f...
Identifying alternatives• Expert workshop• Regional workshop with local stakeholders• Consult crop/agricultural federation...
Mitigation and adaptation measures                Livestock                                             Rice•   Improved i...
Direct outlay costMitigation and Adaptation                   Eco-Efficient Agriculture for the Poor
MitigationAdaptation                 Eco-Efficient Agriculture for the Poor
Current policies   New policiesMITIGATIONADAPTATION                                      Eco-Efficient Agriculture for the...
Is it feasible for   the private sector to bear   the costs of adaptation &  mitigation?       Eco-Efficient Agriculture f...
Cost Effectiveness Analysis        Mitigation                     Eco-Efficient Agriculture for the Poor
Potential area, Cost and Potential mitigationfrom alternatives (2012-2040)                                           Carbo...
August15, 2008      Silvopastoral systems:       A mini-revolution in      Colombia and Central             America       ...
MAC curve showing the potential CO2e capture for theimplementation of SSPi in different regions of Colombia               ...
N-fertilizer on rice                   Eco-Efficient Agriculture for the Poor
Potential CO2e to reduce                                                   Potential area                     Measure     ...
MAC curve for more efficient N-      fertilizer on rice                       Eco-Efficient Agriculture for the Poor
Work wrong   Work well                Eco-Efficient Agriculture for the Poor
Cost (benefit)   -1.000.000            -1.000.000Carbon capture        1                 1.000.000                        ...
Private              perspective  Publicperspective               Eco-Efficient Agriculture for the Poor
CAUTION!!            Economic tools               must be            appropriate for            the problem at            ...
Others CIAT workOngoing• GIZ / CONANP Mexico (Programming)• ESPA Colombia (Programming)Upcoming• DNP – Colombia (Econometr...
Some gaps…• More programming work  – Better understanding of implication of mitigation    and adaptation measures on small...
Thanks!j.tapasco@cgiar.org     Eco-Efficient Agriculture for the Poor
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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

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CCAFS Science Meeting Item 06 Jeimar Tapasco - Economic framework

  1. 1. Economic analysis foradaptation/mitigation alternatives Jeimar Tapasco Andy Jarvis WWW.ciat.cgiar.org Eco-Efficient Agriculture for the Poor
  2. 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. 3. Financial vs. Economic cost Eco-Efficient Agriculture for the Poor
  4. 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. 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. 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. 7. Economicefficiency is not the only objective for society. Eco-Efficient Agriculture for the Poor
  8. 8. CIAT Work Colombia Eco-Efficient Agriculture for the Poor
  9. 9. Business as usual: Agriculture (Colombia) Business as usual: Livestock (Colombia) Eco-Efficient Agriculture for the Poor
  10. 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. 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. 12. Direct outlay costMitigation and Adaptation Eco-Efficient Agriculture for the Poor
  13. 13. MitigationAdaptation Eco-Efficient Agriculture for the Poor
  14. 14. Current policies New policiesMITIGATIONADAPTATION Eco-Efficient Agriculture for the Poor
  15. 15. Is it feasible for the private sector to bear the costs of adaptation & mitigation? Eco-Efficient Agriculture for the Poor
  16. 16. Cost Effectiveness Analysis Mitigation Eco-Efficient Agriculture for the Poor
  17. 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. 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. 19. MAC curve showing the potential CO2e capture for theimplementation of SSPi in different regions of Colombia Eco-Efficient Agriculture for the Poor
  20. 20. N-fertilizer on rice Eco-Efficient Agriculture for the Poor
  21. 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. 22. MAC curve for more efficient N- fertilizer on rice Eco-Efficient Agriculture for the Poor
  23. 23. Work wrong Work well Eco-Efficient Agriculture for the Poor
  24. 24. Cost (benefit) -1.000.000 -1.000.000Carbon capture 1 1.000.000 Eco-Efficient Agriculture for the Poor
  25. 25. Private perspective Publicperspective Eco-Efficient Agriculture for the Poor
  26. 26. CAUTION!! Economic tools must be appropriate for the problem at hand. Eco-Efficient Agriculture for the Poor
  27. 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. 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. 29. Thanks!j.tapasco@cgiar.org Eco-Efficient Agriculture for the Poor

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