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

1. Economic analysis for
adaptation/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
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3. Financial vs. Economic cost
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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 Mitigation
Cost 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
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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)
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7. Economic
efficiency is not
the
only objective
for society.
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8. CIAT Work
Colombia
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9. Business as usual:
Agriculture
(Colombia)
Business as
usual: Livestock
(Colombia)
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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)
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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
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12. Direct outlay cost
Mitigation and Adaptation
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13. Mitigation
Adaptation
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14. Current policies New policies
MITIGATION
ADAPTATION
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15. Is it feasible for
the private
sector to bear
the costs of
adaptation &
mitigation?
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16. Cost Effectiveness Analysis
Mitigation
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17. Potential area, Cost and Potential mitigation
from 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
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18. August15, 2008
Silvopastoral systems:
A mini-revolution in
Colombia and Central
America
13 months
October 22, 2008
Initial state: July 17, 2007
15 months
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19. MAC curve showing the potential CO2e capture for the
implementation of SSPi in different regions of Colombia
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20. N-fertilizer on rice
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21. Potential CO2e to reduce
Potential area
Measure (ha) tCO2e/year
Leveling land Cucuta 16,900 197,052
Technical assistant Tolima and Huila 67,049 84,785
Leveling land Jamundi 5,113 66,812
Crop residues management Espinal 13,900 26,271
Technical assistant Meta 74,005 14,754
Technical assistant Cucuta 11,404 10,161
Technical assistant Bajo Cauca 47,346 5,705
Technical assistant Casanare and Arauca 64,897 4,726
Technical assistant Cesar, Magdalena and Guajira 12,068 4,241
Crop residues management Yopal 6,985 3,300
Crop residues management Valledupar 3,035 3,278
Technical assistant Casanare 13,488 1,934
Technical assistant Jamandi 1,300 1,060
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22. MAC curve for more efficient N-
fertilizer on rice
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23. Work wrong Work well
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24. Cost (benefit) -1.000.000 -1.000.000
Carbon capture 1 1.000.000
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25. Private
perspective
Public
perspective
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26. CAUTION!!
Economic tools
must be
appropriate for
the problem at
hand.
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27. Others CIAT work
Ongoing
• 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)
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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
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29. Thanks!
j.tapasco@cgiar.org
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