1. AGRIMONITOR AND CLIMATE CHANGE Tim Josling 1Presentation to IDB group, 11/14/14

2. Premises AGRIMONITOR is up and running Provides more information on polices in LAC than hitherto available in convenient, comparable form Agricultural policy has a broad set of objectives and constraints – Food Security – Competitiveness – Integration – Climate change Next step is to develop AGRIMONITOR as a tool to address these new issues as well as the information needed for more traditional policy analysis 2

3. Contents Conceptual Framework Two stage approach Baseline GHG emissions in AGRIMONITOR Example Mitigation and Adaptation Policies Issues to be resolved 3Presentation to IDB group, 11/14/14

4. Conceptual Framework Crops and livestock products contribute significantly to the emission of Greenhouse gases (GHG), particularly CO2 and Methane Emissions are in part offset by sequestration Agricultural policy can influence emissions by impact on cropping patterns and livestock Climate change mitigation policy can intervene in agricultural production decisions directly by limiting emissions or requiring offsets 4Presentation to IDB group, 11/14/14

5. Conceptual Framework Adaptation measures will also become relevant in coming years: resilience also important Crop yields will be affected by temperature and rainfall variations and extreme weather events associated with climate change Other impacts will be less direct, such as through pest and disease linkages Individual governments can help the sector to adjust, or remediation or compensation could be attempted 5Presentation to IDB group, 11/14/14

6. Conceptual Framework Mitigation policies require knowledge of GHG emissions from agriculture Calculations can be made using standard emission factors (EF) and knowledge of current farming practices Adaptation policies require knowledge of the influence of climate parameters on yields under different farming practices Calculation of effectiveness of such policies is more complex: have to rely on proxies such as expenditure and policy classification 6Presentation to IDB group, 11/14/14

7. Conceptual Framework Link with Agrimonitor is to focus on the GHG emission issue and the “climate friendliness” of agricultural policies Data on Emission Factors for crops and livestock systems are available Policy instruments that directly try to influence GHG emissions (mandated offsets, etc.) should be included in the data set Data can be collected by farming system where necessary (e.g. smallholder vs estate) 7

8. 8Presentation to IDB group, 11/14/14 The link with mitigation and adaptation is through classification of policies Policies that promote adaptation, through adoption of low-carbon practices, renewable energy, etc. Policies that help mitigation by "implicitly or explicitly" taxing carbon Policies that restrict adaptation, such as fossil- fuel subsidies Conceptual Framework

9. Two stage approach First stage is to benchmark GHG emission by commodity Establish relationship between transfers as measured by PSE and GHG emissions Simplest approach is “allocation” by commodity – 20 percent PSE for bananas and 400 tons of CO2 Add in those GHG emissions not commodity- specific Convert emissions to monetary base using carbon price – compare "subsidy" of no carbon cost with other subsidies to producers Beware of over interpretation and weak causation (policy may not be linked with cause of emission) 9Presentation to IDB group, 11/14/14

10. Two stage approach Second stage would be to model policy impacts on farmer decisions, building on PSE database Derive land use patterns as a result of policy and other factors Emissions expressed as a by-product of farming practices following policy incentives More complete accounting of link between policies and emissions possible Model could be linked to changes in rainfall and temperature expected from climate change But existence of adequate models for all LAC countries problematic 10Presentation to IDB group, 11/14/14

11. First stage: Establish Baseline Insert information into PSE database that relates to climate change – GHG emissions per ha or per ton – Carbon sequestration – Offsets purchased by producers – Abatement measures mandated Derive net contribution to GHG from crop and aggregate over sector (ACE) 11Presentation to IDB group, 11/14/14

12. Example Take three crop example for Jamaica – sugar,bananas and coffee - (numbers made up) Insert calculations of GHG emissions by crop Apply to PSE framework Calculate ACE measure by crop and aggregate over all crops (including GHG emissions not allocable to individual crops) 12Presentation to IDB group, 11/14/14

13. Example 13Presentation to IDB group, 11/14/14

14. Example 14Presentation to IDB group, 2/12/09

15. Mitigation Policies Categories of policies grouped by mitigation impact – Subsidies for alternative fuels – Conservation and improved efficiency programs – Promotion of sequestration – Current taxes, subsidies and controls on GHG emissions Expenditures on each of these policies Relationship with overall support measures Presentation to IDB group, 2/12/0915

16. Adaptation Policies Categories of policies that promote adaptation, resilience and sustainability – Reduce risks associated with climate variability – Improve infrastructure in rural areas to improve resilience – Promote R&D&I in appropriate areas – Improve response to extreme events – Risk management instruments Presentation to IDB group, 2/12/0916

17. Map over time and by country Aggregate expenditure on mitigation to country level Compare with costs of GHG emissions Track path of expenditures over recent period (5 years?) Aggregate expenditure on adaptation policies Relate to losses from extreme events Compare experiences across countries Presentation to IDB group, 2/12/0917

18. Issues to be resolved How far to go in linking policy developments with GHG emissions? – Full model of land use and livestock inventory? – Use expenditure as proxies for policy intensity, effectiveness? How disaggregated to take policy analysis? – Farming system level? – Size of farm? How far upstream and downstream to go? – Transportation? Processing? Retailing? 18Presentation to IDB group, 11/14/14