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Tapasco Economic analysis of mitigation alternatives july 2012

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Presentation at CCAFS - FAO Workshop on NAMAs: national mitigation planning and implementation in agriculture

16 - 17 July 2012


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Tapasco Economic analysis of mitigation alternatives july 2012

  1. 1. Eco-Efficient Agriculture for the Poor WWW.ciat.cgiar.org Jeimar Tapasco Andy Jarvis Lini Wollenberg Economic analysis for mitigation alternatives - limits of MACCs Expert Workshop on NAMAs: national mitigation planning and implementation in agriculture. Rome, 16-17 July 2012. CCAFS and FAO.
  2. 2. Eco-Efficient Agriculture for the Poor MAC Curve McKinsey & Company (2010).
  3. 3. Eco-Efficient Agriculture for the Poor Source: World Bank (2010) MEXICO BRASIL Source: World Bank (2010) USA Sorce: Lutsey (2008) UK Agriculture Source: OECD (2010)
  4. 4. Eco-Efficient Agriculture for the Poor MAC Curve for Colombia -Energy - Transport - Agriculture, Forestry and Other Land Use World Bank and DNP
  5. 5. Eco-Efficient Agriculture for the Poor Agriculture Agroforestry Forestry Annual Perrennial Livestock Tree + Crops or/and Livestock Natural Plantation Efficient Fertilization (Case Study: Rice) Oil Palm Silvopastoral Systems Commercial Forestry Plantations Pasture Improvement Rubber Plantations REDD+ Conversion of Pastures to Fruit Tree Plantations Crops in Histosols Cacao Nutritional Complements Low-Carbon Agricultural Practices Ecological Restoration
  6. 6. Eco-Efficient Agriculture for the Poor Intervention alternative Abatement potential (thousands of tCO2eq/year) Potential area evaluated (ha) Cost- effectiveness (US$/tCO2eq) Min Max Commercial Forestry Plantations 44,037 4,000,000 -4,4 -2,7 Intensive Silvopastoral (ISS) Projects 43.819 3.739.109 -49 0.6 Avoided Deforestation (REDD Projects) 65,874 2,250,000 -0.2 -0.2 Conversion of Pastures to Fruit Production 1,938 359,320 -188 -25 Rubber Plantations 1,786 260,000 -1,05 -0,67 Efficient Use of Fertilizers 38 170,000 -267 145 Pasture Improvement 54 51,487 -103 -62
  7. 7. Eco-Efficient Agriculture for the Poor MAC Curve - Aggregate (270) (170) (70) 30 130 - 10,000 20,000 30,000 40,000 MAC: US$/tCO2 Thousand tonnes of carbon saved/year Rice Casanare (Irrigation) Rice Valledupar Mango Huila Small Mango Huila Large Avoca.Tolima Medium Avoca. Tolima Large Mango Cundinamarca Small Avoca. Huila Medium Avoca. Huila Large Mango Cundinamarca Large Rice Tolima Improve Pasture Meta Rice Casanare Mango Cundinamarca Medium Mango Boyaca Small Improve Pasture Casanare Mango Tolima Small Rice Meta Improve Pasture Arauca Mango Tolima Large Avoca. Risaralda Large Avoca. Antioquia Medium Avoca. Quindio Large SSPi Bajo-Cauca (Antioquia) Avoca. Risaralda Small Avoca. Quindio Small Avoca. Caldas Large Mango Boyaca Large Avoca. Antioquia Large Avoca. Risaralda Medium Avoca. Caldas Small Avoca. Quindio Medium Mango Antioquia Large Avoca. Antioquia Small Mango Boyaca Medium Mango Antioquia Small Avoca. Caldas Medium Rice Guaranda y Nechi SSPi Eastern -Antioquia rest of the country (CIPAV) SSPi Córdoba SSPi Atlantico SSPi Sucre SSPi Uraba-Antioquia SSPi Northeast - Antioquia Rice Jamundi Rice Cucuta
  8. 8. Eco-Efficient Agriculture for the Poor Economic tools must be appropriate for the problem at hand. CAUTION!!
  9. 9. Eco-Efficient Agriculture for the Poor Overview of selected key limitations of the cost/supply curve method* • Negative costs (Not all cots were included) • Strong focus on costs as selection criteria (there are other criteria) • It does not include environmental and social benefit and costs • Economic and technological uncertainty inherent to predicting the future • Strong level of aggregation of the databases used • High sensitivity relative to baseline assumptions (future) • Ignoring interdependencies between measures • High sensitivity to (uncertain) emission factor assumptions *Fischedick et al. 2011.
  10. 10. Eco-Efficient Agriculture for the Poor MAC Curve global GHG beyond business as usual 2030 Source: McKinsey & Company (2010)
  11. 11. Eco-Efficient Agriculture for the Poor Top priorities according to MAC curve Carbon saved (tCO2e/year) Cost (benefit) US$ Priority Measure US$/tCO2e Individual Measure Aggregate Individual Measure Aggregate 1 Rice Casanare (Irrigation) (267.2) 2,075 2,075 (554,465) (554,465) 2 Rice Valledupar (202.0) 321 2,397 (64,923) (619,388) 3 Mango Huila Small (188.2) 11,519 13,916 (2,168,430) (2,787,819) 4 Mango Huila Large (158.4) 46,296 60,212 (7,332,158) (10,119,977) 5 Avoca.Tolima Medium (138.1) 212,958 273,170 (29,412,260) (39,532,237) Least priorities according to MAC curve Carbon saved (tCO2e/year) Cost (benefit) US$ Priority Measure US$/tCO2e Individual Measure Aggregate Individual Measure Aggregate 43 SSPi Uraba-Antioquia (0.6) 898,966 898,966 (537,857) (537,857) 42 SSPi Sucre (2.6) 1,831,998 2,730,964 (4,699,801) (5,237,657) 41 SSPi Atlantico (3.4) 596,711 3,327,675 (2,042,915) (7,280,572) 40 SSPi Córdoba (4.5) 3,747,996 7,075,671 (16,882,013) (24,162,585) 39 SSPi Eastern -Antioquia (8.5) 2,019,716 9,095,387 (17,218,786) (41,381,371)
  12. 12. Eco-Efficient Agriculture for the Poor • There are a large number of potential mitigation options that could be implemented at the national level, with highly varying degrees of emissions reductions, and associated costs for implementation Conclusions
  13. 13. Eco-Efficient Agriculture for the Poor . Clear goals should be set with any emissions reduction plan or strategy, and these goals can then be used as criterion for prioritization
  14. 14. Eco-Efficient Agriculture for the Poor MAC curves are a useful input to evaluating priority interventions, but…….should be interpreted with caution. Incorrect use of the MAC curve for selecting interventions could lead to failure to prioritize the most appropriate interventions.
  15. 15. Eco-Efficient Agriculture for the Poor Private perspective Public perspective
  16. 16. Eco-Efficient Agriculture for the Poor Biophysical efficiency (kg meat)
  17. 17. Eco-Efficient Agriculture for the Poor Biophysical efficiency (ha)
  18. 18. Eco-Efficient Agriculture for the Poor Time constrains
  19. 19. Eco-Efficient Agriculture for the Poor Thanks!
  20. 20. Eco-Efficient Agriculture for the Poor Business as usual: Agriculture (Colombia) Business as usual: Livestock (Colombia)
  21. 21. Eco-Efficient Agriculture for the Poor Cost (benefit) -1.000.000 -1.000.000 Carbon capture 1 1.000.000
  22. 22. Eco-Efficient Agriculture for the Poor Figure 1 - Effect of the emission reduction amount on the cost- effectiveness value. Figure 1a - CEA value against different levels of emission reduction and a constant cost. Figure 1b - Representation of a cost-effectiveness curve
  23. 23. Eco-Efficient Agriculture for the Poor Figure 2 - Effect of the emission reduction amount on the cost- effectiveness value. Figure 2a - CEA value against different levels of emission reduction and a constant cost. Figure 1b - Representation of a cost-effectiveness curve
  24. 24. Eco-Efficient Agriculture for the Poor MAC Curve: Silvopastoral Systems
  25. 25. Eco-Efficient Agriculture for the Poor MAC Curve: Improved Pastures
  26. 26. Eco-Efficient Agriculture for the Poor MAC Curve: Efficiency of Fertilizer Use in Rice
  27. 27. Eco-Efficient Agriculture for the Poor MAC Curve: Mango and Avocado

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