By Louis Bockel
Economics of Sustainable Agriculture Team
ESA Division
CTA Conference: Making the Connection
Addis Ababa, 6-9 November 2012

1. Green indicators and sustainability
2. Multi-criteria appraisal
3. Carbon as an aggregated indicator?
4. Green labelling and carbon footprint to compare value chains
5. Tools for appraising green-growth scenarios of value chains (VCA Tool, EX-ACT Tool)
6. Practical examples: rice, banana

Environmental impacts of agricultural production, processing and trade are commonly characterized through the core dimensions of biological diversity, climate change and energy use, soil, toxicity of inputs, and water

Natural capital
• Biodiversity and habitat in landscape
• Quality of water through watershed
• No damage from toxics
• Low carbon footprint from economic activities
• High organic matter content in soil
Farm-level indicators
• # ha under active conservation management
(natural habitat)
• # ha arable land under sustainable practices
• # m3 of water not affected
• # kg of N not wasted
• # kg of chemicals not used
• GHG emission trend
• Percentage of organic matter in the soil
Landscape-level indicators
• High conservation value areas in the landscape
• Levels of flow in rivers
• Reduced deforestation and land erosion (% of area)

2. Multicriteria appraisal : spider graph of green value chain indicators
Example based on consumption per bushel of maize (25.4 kg)
Source: Hamilton, Operationalizing Sustainability in Value Chains, 2010

3. Carbon as an aggregated indicator?:

• Definition: CFP of a product = quantity of GHG, expressed in
CO2-eq, emitted across the supply chain for a single unit of that product



 mainly in developed countries either the initiative of a company alone (retailer, industry) or launched by governments with the voluntary collaboration of the private sector (credibility) no harmonized methodology for CFP accounting. The multiplication of methodologies difficult to compare the footprint of a same category of products across countries

Advantages of calculating and labelling the carbon footprint

• Implementation of a more effective GHG reduction strategy
– Where are the largest emissions sources?
• Meeting national and international legislation on GHG emissions by involving the food industry
– CFP accounting often linked with mandatory or voluntary reduction of emissions (UK, Thailand,
Korea)

• Greater emissions reduction by encouraging changes in consumers’ behaviour
– CFP labelling helps consumer to choose more environmentally friendly products; choice orientation
– The label sometimes advises consumers on how to reduce their impact (use phase)

• Better management practices in general
• Cost savings and performance
• Strengthen relationships with suppliers

• Enhanced brand image and reputation
– “greener” their image and products
– ensure a certain credibility to their environmental declarations
• Product differentiation and access to niche segments
– EU and UK survey

5. FAO tools for appraising value chain green growth scenarios
EX-Ante Carbon-balance Tool
(EX-ACT)
One tool, several potentials
EX-ACT main objective…
Estimating the possible mitigation benefits of an investment project/ programme
Helping policy decision-making
Helping to get additional funding
Strengthening value chains
Putting forward externalities
Anticipating GHG and carbon impacts of agriculture and forestry activities in a development context
EX-ACT in few words…
• Set of linked Microsoft Excel sheets (19)
• Based on land use and management practices
• Using IPCC default values (Tier
1) and/or ad hoc coefficients
(Tier2)
• Comparing a situation without project and a situation with project
• Upgradable over time
• Possible up-scaling (watershed, national, regional levels)

EX-Ante Carbon-balance Tool
(EX-ACT)
Main data required to run the tool…
• Different land uses and land use changes
• Basic agricultural practices (residue burning, kind of improvements…)
• Areas in ha
• Amount of inputs (fertilizers, fuel, electricity...)
Activities accounted within EX-ACT…
• Deforestation
• Forest degradation
• Afforestation/Reforestation
• Land use change
• Annual crops
• Perennial/tree crops
• Irrigated rice
• Use of organic soils
• Grasslands
• Livestock
• Inputs
• Other investments

The FAO VCA-Tool is a software explicitly designed to carry out economic analyses of value chains
• Structure the accounting framework of a value chain
• Organize data concerning different activities and agents
• Compute the inflows and outflows and performance indicators for each activity and agent
• Compute performance indicators for the whole chain
• Compute reference prices
• Compute competitiveness and protection indicator

6. EXAMPLE OF RICE VALUE CHAIN IN MADAGASCAR
Rice production in Madagascar
Current annual emissions:
12.9 Million tons of CO
2 eq

4.8 kg of CO

7.2 kg of CO
2
2 eq per kg of paddy eq per kg of rice

Methane production of aquatic rice (67%)

Deforestation effect (29%)

Persistence of hilly S&B rice (tavy)
Towards an upgrading scenario for 2003-2020
-
Contuniously flooded rice management
-Laissez aller policy letting S&B increase by
3.1%/year
-Switch of 300,000 ha to intermittent flooding and non-flooded preseason
- improved organic amendment
- Stop any increase of
S&B rice
- Net increase of fertilizers used
The upgraded scenario will allow to fix 5.6 million tons of
CO
2
eq/year between
2003-2020
=> 45% due to ↘CH
4
(from continuously to intermittedntflooding)
=> 54% linked with reduction of
deforestation due to tavy

6. EXAMPLE OF BANANA VALUE CHAIN IN COSTA RICA
Table 16. Emissions related to the different production phases of bananas. Phase
Kg CO2e/ton of bananas %
Farm
Packing
Transport from packing facility to terminal
Terminal and port operations
Overseas transport
137.83
89.60
14.11
25.75
691.74
12%
8%
1%
2%
62%
Ripening
Transport from ripening facility to retail
Extra due to exclusions
Total
84.46
26.62
53.51
1,123.62
8%
2%
5%
100%
A single banana grown in Costa Rica and sold in a German supermarket has a carbon footprint of 135 g CO2e
Source: Soil and More, Comprehensive Carbon Footprint
Assessment , Dole Bananas, 2010

BANANA CARBON FOOTPRINT APPRAISAL IN EX ACT