1 Future CAP for Scotland: Challenges for post 2013 Climate Change Graham Kerr Group Manager, SAC Consulting

Scope of Presentation Climate Change effects and impacts Agricultural emissions Scottish mitigation and adaptation Future CAP: Scottish debate so far Future CAP: European debate so far Future CAP for Scotland to address climate change challenges post

°C °C °C Global temperature rise:+2°C 3 Source: Met Office

°C °C °C °C Source: Met Office Global temperature rise:+4°C

Source: Cline 2007, Change in Farming: Production

Source: UKCP09 Changes in mean precipitation to 2080, 50% probability estimate WinterSummer Change in farming : Rainfall

Source: UKCP09 Change in Farming: Temperature

Emissions from Agriculture 8 MtCO 2 e Source: Defra 2007

Emissions from Agriculture 9 Source: NAEI 2010

Emissions from Agriculture 10 Source: NAEI 2010 Agriculture contributes a disproportionate amount of high impact GHG Arable = 20% of global N 2 O, Livestock = 37% of global CH 4 and 65% of N 2 O Agricultures share of non CO 2 emissions is 47%

11 Mitigation: Abatement Cost Curves Height = cost effectiveness Width = abatement potential

12 Mitigation: Abatement Cost Curves Cheap option, big emission savings Expensive options, small emission savings Financial savings

Farming for a Better Climate Using energy and fuels efficiently Developing renewable energy Locking carbon into the soil and vegetation Optimising the application of fertilisers and manures Optimising livestock management and storage of waste 13

Climate Change Focus Farms 14

Current Policy Initiatives Climate Change Adaptation Scottish Forestry Strategy Scottish Land Use Strategy Agriculture and Climate Change Stakeholder Group Climate Change Research PLANET Scotland Scottish Greenhouse Gas Tool Project SRDP –Grants and support –Skills Development Funds 15

Climate Change – the context 1.Freedom and flexibility 2.Sustainable food production with environmental benefits 3.Capital Grants 4.Wider uptake of environmental schemes 5.LEADER More stringent GAEC standards ruled out 16 Pack Report: Environment

European Perspective The aim of this Reform is also to improve the overall environmental performance of the CAP (Dacian Ciolos, January 2011) Objective 2: Sustainable management of natural resources and climate action – Enhanced provision of public goods –Green growth through innovation –Pursue climate change mitigation and adaptation actions to allow response to climate change 17

European Policy Options Direct Payments Introduce equity but leave mechanism as is Introduce more equity in distribution Phase out and replace with limited payments for environmental public goods Market Measures Risk management and streamline/simplify market instruments Improve and simplify existing market instruments Abolish all market measures (with crisis clause) Rural Development Maintain Health Check orientation – climate change, water, biodiversity, renewables, innovation Adjust and complement existing instruments – environment, climate change, and/or restructuring and innovation Measures focussed on climate change and environmental aspects 18 Option 1 Option 2 Option 3

Policy Options Voluntary agreements Information Provision Grants, subsidies, charges, levies and taxes –Mix of incentives and penalties –Links subsidies and incentives to environmental objectives –Carbon tax Cap and trade –Price emissions and incentives to find efficient ways to lower emissions Direct Regulation –Emissions standards or limits restricting/requiring certain farming practice 19

Options? 20 Voluntary Initiatives Market Forces Behavioural Change Compulsion Regulation Cross Compliance

21