Cost benefit analysis of mitigation
strategies: win-win solutions
Vera Eory, Michael McLeod, Andrew Barnes, Irina Arakelyan
3/2/2015
Nairobi, Kenya
Outline
• Economic assessment of mitigation options: costefficiency and MAC curves
• Literature review on cost-efficiency (OECD)
• Cost-effectiveness estimates for Africa
• Importance of efficiency (incl. animal health)
• Conclusion
2
Assessing GHG mitigation 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 options (e.g. $ / tCO2e)
3
Assessing GHG mitigation 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 options (e.g. $ / tCO2e)
4
Marginal abatement cost curve
EU-27 mitigation
150 Mt CO2e/y
Bates et al. 2009
Mitigation achievable against the baseline emissions
5
Marginal abatement cost curve
EU-27 mitigation
150 Mt CO2e/y
Bates et al.
150 Mt
A MACC shows the mitigation practices ordered by cost-effectiveness:
• x axis – cumulative mitigation potential (considering interactions)
• y axis – cost-effectiveness
2009
6
Example for a global MACC
Agricultural mitigation
up to $50/tCO2e:
~8 Gt CO2e/y
Naucler & Enkvist 2009 7
And a global agricultural MACC
Agricultural
mitigation up to
$50/tCO2e :
~0.3 Gt CO2e/y
Golub et al. 2009
8
Know the limits of numbers…
• Always consider the context
–
–
–
–
Timescale, spatial scale
Definition of practices
Interactions between practices
Boundaries of emissions and costs
• Also important
– Uncertainties (data, methodologies) and variability
– Underrepresented mitigation options (e.g. animal health)
– Co-effects (adaptation, water pollution, biodiversity, etc.)
• Uptake
– How much it is currently adopted?
– What policy support can be provided?
– What are barriers beyond cost?
(See more: AnimalChange Workshop, 30-31/10/2014, Hungary,
http://www.animalchange.eu/Content/Budapest2014.html)
9
CE literature review - OECD
• Review of 37 papers/reports on agricultural MACCs or costeffectiveness of practices within the OECD countries
• Cost-effectiveness of individual mitigation practices (12 studies)
• Wide range in the results
• All practices could be cost-effective in certain cases
•
Win-win practices might be:
– Feed additives for cattle: ionophores
– Reduced protein intake of livestock
– Optimising the amount of N fertiliser
– Livestock breeding for increased productivity and fertility
•
Low cost practices might be:
– Optimising grazing
– Ruminant breeding for low enteric methane emissions
10
11
Propionate precursors
Catch-cover crops
Legumes in rotations
Rice: mid-season drainage
Rice: alternate flooding
Breeding: low methane
Suboptimal N fertilisation
Centralised AD
Covering slurry stores
Feeding more fat (ruminants)
Placing N precisely in the soil
Prescision farming
Feeding more concentrates
On-farm AD
Grass-legume mixtures
Optimising N timing
Avoiding N excess
Reduced/no till
Nitrification inhibitors
Optimal grazing
Breeding: productivity, fertility
Optimising N amount
Reduced protein intake
Ionophores
Cost-effectiveness (€/t CO2e)
100,0005
10,0004
1,0003
1002
101
00
-10
-1
-2
-100
-3
-1,000
-4
-10,000
-5
-100,000
What’s in the cost-effectiveness
literature about Africa?
12
Emissions (Gt CO2e/y)
Emissions and mitigation potential
2.5
Non-CO2 agricultural emissions
Africa
2
Central and South
America
Middle East
1.5
1
OECD
0.5
0
1990
Non-OECD Asia
2000
2010
2020
2030
EPA 2012
Non-CO2 agricultural mitigation, 2030
18%
Mitigation as % of emissions
Africa’s share of
non-CO2
agricultural
emissions: 20%
Africa’s mitigation,
2030: 75 Mt CO2e/y
China
16%
India
14%
North America
12%
Central/South Am.
10%
Europe
8%
Eurasia
6%
Middle East
4%
Rest of Asia
2%
Africa
0%
World average
-20
0
20
40
60
Carbon price ($/tCO2e)
80
100
EPA 2013
13
Emissions and mitigation potential
Biophysical mitigation potential in 2030 (Mt CO2e/y)
Africa’s agricultural mitigation,
2030 (incl. CO2 emissions and C
sequestration): 1,000 Mt CO2e/y
142008
Smith et al.
Emissions and mitigation potential
Biophysical mitigation potential in 2010 (Mt CO2e/y)
Africa’s agricultural non-CO2
mitigation, 2010: 3.7 Mt CO2e/y
DeAngelo et al. 2006
15
Agricultural MACC for Malawi
MACC for selected CSA practices in Malawi
Branca et al. 2012
16
Low milk production efficiency
Gerber et al. 2011
17
No increase in per capita production
Pretty et al. 2011
18
Drivers of farm efficiency in Malawi
A Barnes, S Thomson, I Arakelyan and C Revoredo-Giha
Distribution of dairy and average milk yield, 2009-2012
Southern region:
• majority of dairy cattle
• highest proportion of
crosses
• lower yield
Central region:
• less cattle,
• more purebred cows
• higher yield
• a result of recent
interventions into this
region
Interview of 460 farms;
Data Envelopment
Analysis to compare
relative efficiency; survey
on mitigation practices
19
Drivers of farm efficiency in Malawi
.6
.8
Central region: highest efficiency, biggest
variability
.2
.4
Efficiency is driven by:
• availability of pure breeds
• increasing levels of experience
• access to land area
0
Technical Efficiency Score
1
Technical efficiency of dairy farms by region
North
Central
South
Tobit regression analysis
Variable
Intercept
Age (yrs)
Education (level)
Total farming area (ha)
Experience (yrs in farming)
Pure Breeds (% of total herd)
Central (compared to North)
South (compared to North)
Coefficient
-0.55 ***
-0.07 0.09 0.17 ***
0.05 *
0.09 ***
1.01 ***
0.19 -
indicates significance level (*, 0.05; **, 0.001; ***, 0.0001)
Theoretically, if all farms could perform on the
technology frontier milk supply would increase
by over 250%.
Findings on mitigation
• Low digestibility grass/forage
• Feed conservation practices (e.g. hay) are
not often practiced
• The majority of respondents regularly
experience shortage of feed
20
Benefits of tryps intervention in EA
M MacLeod, TP Robinson, GRW Wint, APM Shaw, V Eory and P Gerber
Cattle production systems
Economic benefits (Shaw et al. 2014):
1. Cattle production systems
2. Herd models with and without tryps
3. Spatial expansion model (cattle
migrate if maximum stocking rates are
exceeded)
4. Differences in income between the
two scenarios
Benefits for the whole area:
US$ 2.5 billion
(~ US$ 3,300/km2)
Shaw et al. 2014
21
Benefits of tryps intervention
Main GHG sources:
• Enteric CH4
• N2O from the deposition of organic N
Change in emission intensity because:
• Increased milk yield
• Increased fertility rate, greater % of the
cows lactating
Additionally:
• Reduced mortality
• Increase in the % of the herd used for
work
22
Conclusions
• High range of cost-effectiveness estimates – importance of
understanding the MACC methodology and its relevance
• Very little work on Africa so far
• Focus on development and adaptation: increasing yields,
diversification, reducing waste – efficiency improvement: win-winwin solutions
• AND: opportunity to locally develop and promote suitable
mitigation practices in parallel to development and adaptation
work (importance of transitions in uptake)
• Mitigation as a co-benefit of adaptation and development versus
“mitigation-only” practices
• Potential role for the private sector in financing beyond C
sequestration?
23
Thank you!
Funded by the EU Seventh Framework Programme (AnimalChange project,
grant agreement no 266018), and the Scottish Government Rural and
Environmental Science and Analytical Services division (RESAS) funding to
SRUC.
Contact: vera.eory@sruc.ac.uk
References
•
Bates, J., Brophy, N., Harfoot, M. and Webb, J. (2009) Agriculture: methane and nitrous oxide. Sectoral Emission Reduction
Potentials and Economic Costs for Climate Change (SERPEC-CC), AEA Energy & Environment
•
Branca, G., Lipper, L. and Sorrentino, A. (2012) Benefit-costs analysis of climate-related agricultural investments in Malawi: a
case study. Paper prepared for presentation at the 1st AIEAA Conference ‘Towards a Sustainable Bio-economy: Economic
Issues and Policy Challenges’, 4-5 June, 2012, Trento, Italy
•
DeAngelo, B. J., de la Chesnaye, F. C., Beach, R. H., Sommer, A. and Murray, B. C. (2006) Methane and nitrous oxide
mitigation in agriculture. Energy Journal 27, 89-108
•
EPA (2012) Global anthropogenic non-CO2 greenhouse gas emissions: 1990-2030, Report No EPA 430-R-12-006, United
States Environmental Protection Agency, Office of Atmospheric Programs, Washington DC
•
EPA (2013) Global mitigation of non-CO2 greenhouse gases: 1990-2030, Report No EPA-430-R-13-011, United States
Environmental Protection Agency, Office of Atmospheric Programs, Washington DC
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•
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•
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