1. Projections of greenhouse gas emissions from agriculture: an Irish example Trevor Donnellan FAPRI-Ireland Partnership Rural Economy Research Centre, Teagasc HQ, Dublin 4.

2. Outline Introduction FAPRI-Ireland explained Agriculture Commodity Models: Methodology Baseline & Scenarios Agriculture Projections Derivation of GHG projections Some sample results for Ireland of GHG emissions from agriculture

3. FAPRI-Ireland Partnership Consortium founded in 1997 Teagasc (Irish Agriculture and Food Development Authority) Food and Policy Research Institute (FAPRI) (Missouri, USA) National Universities of Ireland Partner project in Northern Ireland

4. FAPRI-Ireland Partnership: Agri-food projections for Irish Agriculture Economic models of agricultural sectors Commodity sub-models combined to form model of Irish agricultural sector Dynamic partial equilibrium econometric model Close to 20 commodities Baseline and Scenario projections of agricultural activity to a 10 year horizon

5. FAPRI-Ireland Partnership Agri-food projections for Irish Agriculture Agricultural activity projections can be used to project agriculture’s GHG contribution – Under Baseline of no further policy change – Under Scenario of some policy change, e.g. the EC Luxembourg Agreement, WTO reform

6. Methodology Model of agricultural economy Projections of agricultural activities Implications for GHG emissions

7. Historical data collected Equations specified (Y =  +  1 X 1 +  2 X 2 ) Equations estimated Models assembled in spreadsheets System solved Projections generated National expert review Methodology

8. Cereals Inputs Poultry Pigs Sheep Beef Dairy Milk Output Values Beef Output Values Sheep Output Values Poultry Output Values Pig Output Values Poultry Meal Prices Poultry Numbers Poultry Prices Dairy Cow Numbers Dairy Meal Price Cereal Prices, Production, Value & Hectares Cattle Feed Price Cattle Numbers Cattle Feed Price Pig Numbers Pig Meal Price Beef Cow Numbers Dairy Cow Numbers Commodity model inter linkages

9. Total Milk Production Liquid Milk Butter Cream Cheese WMP Choc. Crumb Manufacturing Milk Price Liquid Milk Price Domestic Sales Intervention Domestic Sales Exports Milk Output Milk Output per CowNo. Dairy Cows Milk Fed to Livestock On Farm Human Use SMP Casein Manufacturing Milk Misc. Prods. Liquid Consumption Milk Delivered Dairy model

10. How we do the Policy Analysis? Develop a Baseline – Current Policies Remain In Place – International Agreements Hold – No New Policies Contrast it with an alternative Scenario – Using different policy assumptions Difference between the two is the policy’s effect No New Policy Assumptions

11. Activity data projections Macroeconomic conditions – Exchange rates, economic growth, inflation – Obtained from Macro policy models Policy conditions – EU policy reform or proposals from other sources Market conditions – Based on published data from official and commercial sources Events in other agriculture sectors – The impact which events in one ag sector can have on another is included

12. Projections 10 year horizon Baseline – Current policy remains in place – Current international agreements in place – No new policy Scenario – Alternative policy – Method of differences

13. Issues we have looked at Previous Analyses – Analysis of the Implications of Quota removal – Commission Agenda 2000 Proposals (December 1998) – the Final Berlin Agenda 2000 Agreement (May 1999) – the London Club Agenda 2000 Dairy Alternative (Sept 1999) – the impact of Exchange Movements on Farm Income (March 2000) – the impact of a reduction or elimination of Export Subsidies (April 2001) – the impact of reform of the EU extensification regime (April 2002) – CAP reform Mid Term Review proposals (May 2003) – Luxembourg Agreement CAP reform (Oct 2003)

14. MTR/WTO Scenario Assumptions Baseline of May 2003 MTR implemented as per June 2003 – Dairy reform – With 3 decoupling options analysed WTO reform as per EU modalities (Jan 2003) – 36% reduction in tariffs – 45% reduction in export subsidy outlays – 55% reduction in AMS OTMS gradually phased out (as in Baseline) – phased return of OTMS beef (2004 to 2006)

15. Example - Beef Results: Ireland Decoupling changes returns to suckler cow farming – Suckler cow herd declines – Reduces size of beef herd – Leads to lower emissions levels Irish Suckler Cows

16. Sample Output: % change in animal no.

17. Ireland: results to date Greenhouse gas emissions from agriculture 2002 – Baseline projections 2002 – Extensification scenario – Decoupling scenario 2003 – Baseline projections 2003 – CAP Reform Mid Term review scenario – CAP Reform Luxembourg Agreement/WTO scenarios

18. GHG Emissions from Agriculture 2.5 > 2.4 CO 2 eqiuv October 2003 Analysis

19. Conclusions Agricultural policy Models – can project GHG emission levels – under Baseline and policy change scenarios Activity projections – allow conversion to GHG emissions projections – based on best scientific information available Allow evaluation of the impact of agricultural policy changes on GHG emissions into the future

20. Thank You www.tnet.teagasc.ie/fapri Full report is available on our website at: