strategies: win-win solutions Vera Eory

Transcription

1 Cost benefit analysis of mitigation strategies: win-win solutions Vera Eory 31/10/2014

2 Outline Problem setting: emissions and reduction targets Assessing mitigation practices: cost-effectiveness and marginal abatement cost curve Cost-effectiveness literature review Barriers and opportunities for policy Bear in mind Conclusion 2

3 GHG emissions in Europe Gt CO2e Waste Agriculture Solvent and other product use Industrial processes Energy Land use, land use change and forestry 2030 target Total emissions 3 EEA

4 Production vs consumption based inventory UK GHG emissions (solid lines: consumption based, dashed line: production based inventory) Committee on Climate Change 2013, EEA 4

5 Agricultural policies No binding emission targets (burden sharing) Important drivers of agricultural activities Common Agricultural Policy (CAP) Nitrate Directive, Water Framework Directive, Biodiversity Strategy Land use policies, renewable policies Global issues: food security, impacts of climate change Future agricultural emissions (EU) Trends in agriculture (OECD countries) 5 EC 2013 OECD 2014

6 Assessing options Where to reduce emissions, which pathways to choose? Important aspects include: How much mitigation? At what cost? How easy to promote the change? Are there any negative or positive co-effects? How to monitor? Cost-effectiveness is a metric to compare the cost of GHG mitigation (e.g. / t CO 2 e) 6

7 Marginal abatement cost curve Bates et al Mitigation achievable against the baseline emissions 7

8 Marginal abatement cost curve Bates et al A MACC shows the mitigation practices ordered by cost-effectiveness: x axis cumulative mitigation (considering interactions) y axis cost-effectiveness 8

9 CE literature review Review of 43 papers and reports which reported agricultural MACCs Methodological approaches Top-down equilibrium (sectoral models of big regions, e.g. CAPRI) Micro-economic modelling (farm models, e.g. AROPAj) Bottom-up engineering (cost and mitigation data for individual practices are collected, e.g. French, Irish and UK agricultural MACCs) Bottom-up studies give estimates of the original cost-effectiveness of individual mitigation practices 9

10 CE literature review Cropland management total 179 Livestock management total 120 Agronomy 13 Nutrient use efficiency and feeding 52 Nutrient management 104 Specific agents and dietary additives 35 Structural and management changes 2 Animal health 0 Tillage and residue management 17 Structural and management changes 13 Water management 4 Animal breeding, genetics and herd structure 20 Rice management 39 Housing and manure total 67 Orchards 0 Housing 8 Grazing land management total 33 Manure storage and handling 25 Grazing intensity and timing 16 Anaerobic digestion and CH4 capture 34 Increased productivity 13 Energy efficiency total 23 Fire management 3 Transport 3 Water and soil management 1 Space heating 8 Management of organic soils total 2 Waste 0 Restoration of degraded lands total 5 Electricity 3 Land use change total 7 Process heating 1 Electricity generation 5 10 Other energy efficiency 3

11 10,000 4 CE literature review 1, Cost-effectiveness ( /tco2e) ,000-3 Optimal (no excess) N fertilisation Optimising N timing Suboptimal N fertilisation Prescision farming Placing N precisely in the soil Legumes in rotations Grass-legume mixtures Nitrification inhibitors Reduced/no till Catch-cover crops Agroforestry Rice: mid-season drainage looding Optimal grazing Reduced protein intake Feeding more concentrates Feeding more fat (ruminants) Ionophores Propionate precursors Breeding: low methane (ruminants) fertility Covering slurry stores Centralised AD On-farm AD 11 Rice: alternate fl Breeding: productivity,

12 CE literature review Win-win practices could be: Optimising the amount and timing of N fertiliser Grass-legumes mixtures Optimising grazing Feed additives for cattle: ionophores Livestock breeding for increased productivity and fertility Low cost practices: Sub-optimal N fertilisation (below economic optimum) Reduced and no tillage Anaerobic digestion 12

13 Barriers and opportunities How to promote the favourable practices? What could be the barriers of adoption? Running costs, capital investment (e.g. precision farming) Novelty, not proven in the area (e.g. nitrification inhibitors) Information not easily available (e.g. controlled release fertilisers) Time or know-how required for implementation (e.g. sexed semen) Supply chain barriers (e.g. grain legumes) 13

14 Policy instruments Compulsory Instrument: CAP Pillar 1 (Single Farm Payment and Greening Payment) Example: N application in Nitrate Vulnerable Zones; Legumes in the Ecological Focus Areas (optional) Financial incentives: Instrument: CAP Pillar 2 (Rural Development Programme) Example: support for covering slurry tanks in Scotland Information provision Instrument: Environmental Co-operatives, Farming for a Better Climate, Farm Advisory System Example: promotion of N and energy efficiency measures in FFBC 14

15 The CAP and GHG mitigation Structural changes uncertain effects Pillar 1 Direct payments Greening 1. Diversification 2. Permanent pasture 3. Ecological focus areas Pillar 2 Rural Development Programme Flexibility to include mitigation measures Limited mitigation (some NVZ rules) No effect Perverse incentives Emission leakage? Behavioural change Cross compliance Farm Advisory Service Young Farmers Scheme Areas with Natural Constraints Uncertain Potential for increasing voluntary uptake 15

16 What can we achieve? Abatement [kt CO2e] ,000 1,500 2,000 2,500 3,000 Full techincal (100% Costeffective (100% Costeffective (45% Policy (variable Behavioural barriers Policy constraints 16

17 What can we achieve? Abatement [kt CO2e] ,000 1,500 2,000 2,500 3,000 Full techincal (100% Costeffective (100% Costeffective (45% Policy (variable Economic rationale Policy constraints 17

18 What can we achieve? Abatement [kt CO2e] ,000 1,500 2,000 2,500 3,000 Full techincal (100% Costeffective (100% Costeffective (45% Economic rationale Behavioural barriers Policy (variable 18

19 What can we achieve? Abatement [kt CO2e] ,000 1,500 2,000 2,500 3,000 Full techincal (100% Costeffective (100% Costeffective (45% Policy (variable Economic rationale Behavioural barriers Policy constraints (acceptability, legal status, transaction costs) Eory et al

20 Bear in mind Issues in cost-effectiveness analysis and MACCs Uncertainties (data, methodologies) and variability Interactions between practices Boundaries of emissions and costs Baseline, barriers, uptake estimates Co-effects Timescale, spatial scale Definition of practices 20

21 the uncertainties Main sources of uncertainty Farmers uptake of mitigation practices, effects of policy instruments Current emissions and mitigation effects of alternative practices (emission factors) Costs of changing farming practices and transaction costs Current and future agricultural activities and practices (effects of climate change, demographics, economics) Uncertainties in the unitary and total abatement of practices costs and the cost-effectiveness of practices ranking of the practices and the economically optimal level of abatement 21

22 the uncertainties 0.4 The probability of the ranking of mitigation practices Timing of mineral N 0.35 Improved N-use efficiency plants Better land drainage 0.3 Reduced tillage 0.25 Timing of organic N Avoiding excess N Probability 0.2 Using organic N to its full extent Delay between slurry and mineral N 0.15 Using composts in preference to slurry Nitrification inhibitors 0.1 Introduction of new species 0.05 Controlled release fertilisers Reducing N fertiliser Ranking Biological fixation Systems less reliant on inputs 22 Eory et al. 2014

23 the interactions Stand alone vs interaction cost-effectiveness Controlled release fertilisers Nitrification inhibitors Reducing N below economic optimum Improved land drainage Using more legumes Using composts in preference to slurry Avoiding applying N in excess Fully utilising manure N Improved timing of organic N application Reduced tillage Improved timing of mineral N application Stand-alone With interactions -1, , , ,000 5 CE ( /tco2e) 23 MacLeod et al. 2014

24 the boundaries IPCC vs LCA methodology Schulte et al

25 the boundaries IPCC vs LCA methodology Schulte et al

26 the boundaries Farm vs sector Emission intensity of milk and meat (kg CO 2 e (kg protein) -1 ) Emission intensity considering GHG saved from additional meat production (kg CO 2 e year -1 ) CE of sexed semen administration ( (t CO 2 e) -1 ) Medium dairy farm Large dairy farm Baseline Sexed Sexed Baseline semen semen Medium dairy farm Large dairy farm Eory et al

27 the baseline Statistics on non-adopters High non-adoption, limited further adoption assumed Statistics on non-adopters Assumption on uptake Assumption on uptake All farms Dairy farms All farms All farms Legumes-grass mixture on grasslands NA 65% 28% 0% Controlled release fertilisers NA 73% 33% 0% Nitrification inhibitors NA 96% 33% 0% Crop varieties requiring less N 70% 79% 14% 5% More concentrates in the diet NA 70% 45% 0% Adding probiotics to the diet NA 79% 41% 0% Covering manure stores 90% 96% 45% 0% Anaerobic digester NA 99% 45% 10% High current adoption, still high further adoption assumed Genetic improvement (high PLI semen) 89% 40% 45% 15% Avoiding applying N in excess 70% 14% 9% 16% Fully utilising manure N NA 20% 31% 18% Improved land drainage NA 11% 16% 0% 27 Scottish Farm Structure and Methods Survey 2013, Glenk et al. 2014, Moran et al. 2008, Eory et al. 2014

28 the co-effects Cost-effectiveness of mitigation practices with co-effects on nitrate, ammonia, phosphorous and sediment pollution included Cost-effectiveness [ /tco2e] Biological fixation Avoid applying N in excess Reduced tillage Improved cattle genetics Covering dairy's slurry tanks No co-effects Damage values A Damage values B Damage values C Damage values D Damage values E 28 Eory et al. 2013

29 Conclusions Win-win measures: safe to support via voluntary policy instruments Framing the message: focus on efficiency and profitability more than on environmental gains Opportunities for compulsory regulation Market-based solutions? Importance of understanding the MACC methodology and it s limitations 29

30 Thank you! Funded by the EU Seventh Framework Programme (AnimalChange project, grant agreement no ), and the Scottish Government Rural and Environmental Science and Analytical Services division (RESAS) funding to SRUC. Contact: