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Title: Global Environmental Externalities: Climate Change, Greenhouse Gas Emissions and the Potential for A


1
Global Environmental Externalities Climate
Change, Greenhouse Gas Emissions and the
Potential for Agricultural Mitigation in
Developing Countries
Can efforts to mitigate GHG emissions also help
enhance sustainability and alleviate poverty in
LDCs?
2
Whats the problem? Atmospheric CO2 levels and
other greenhouse gases
3
There is new and stronger evidence that most of
the warming observed over the last 50 years is
attributable to human activities.
Intergovernmental Panel on Climate Change,
Climate Change 2001 The Scientific Basis.
Summary for Policy Makers, http//www.ipcc.ch/
4
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5
Why have CO2 levels increased ?
Fossil fuel consumption
Land use changes and practices
tillage
tropical deforestation
6
Composition of GHG Emissions
7
Soil carbon is part of the global C pool
  • The amount of carbon in the soils of the earth is
    about 3 times the amount in the atmosphere
  • Scientists believe increasing the amount of
    carbon sequestered into the soil can impact the
    global atmospheric CO2 levels

8
What is carbon sequestration ? Carbon
sequestration can be defined as the net removal
of CO2 from the atmosphere by into long-lived
pools of carbon. In terrestrial ecosystems this
happens through photosynthesis and includes ...
Soil organic C
trees
Inorganic C deep in soils
roots
Include pictures of trees, roots and microbes,
recalcitrant om
9
How does ag carbon sequestration work?
  • -- Replace conventional summer-fallow practices
    with chemical-fallow practices (i.e. no-till)
    that will minimize soil disturbance that lead to
    destruction (loss) of soil C
  • -- Develop diversified sustainable annual
    cropping systems to replace current alternate
    year monoculture cropping systems

10
Tillage No-Till
11
Terracing and agro-forestry
12
Practices that maintain and restore soil organic
matter
13
Hypothesis Agriculture can sequester C in soil
at a cost competitive with other sources of GHG
emissions reductions?
  • Two issues
  • Technical potential to sequester C
  • Costs of sequestering C in soil
  • These two factors determine the cost per metric
    ton of C sequestered

14
Technical Potential Changing farm land use and
management practices can restore soil C lost from
use of conventional practices
Soil C
C0
CC
CV
Time
T0
T1
T2
Begin conventional land use practice
Adopt conservation management
Maximum sequestration potential reached
15
But technical potential cannot be achieved unless
farmers are willing to adopt management practices
that increase soil C. At what cost can farmers
change practices to increase soil C?How can
farmers be provided an incentive to change
practices?How can incentive mechanisms be
adapted to conditions in developing countries?
16
Soil degradation is a key factor in unsustainable
production systems in developing countries
We know that soil degradation causes a loss in
soil carbonand we know that soil conservation
and other practices increase the amount of
carbon in soil.
Can efforts to reduce GHG emissions through
carbon sequestration help create incentives for
adoption of more sustainable production systems
in LDCs? Can GHG mitigation also alleviate
poverty?
17
Factors Affecting Incentives for Soil
Conservation
  • With well-defined property rights and related
    market institutions, informed farmers have
    incentives to invest in soil conservation, and
    often do.
  • But numerous factors may create adverse
    incentives, especially for poor farmers in
    marginal areas
  • lack of property rights
  • lack of human capital, technical knowledge
  • lack of financial markets
  • policies that discriminate against agriculture
  • Implication soil organic matter may be more
    valuable to farmers when converted into biomass
    for use as animal feed, fuel, etc. than being
    maintained in the soil.

18
Factors Determining the Cost of C Sequestered in
Agricultural Soil
  • Farm Opportunity Costs What does the producer
    have to do to increase soil C, and how does that
    affect profitability?
  • Change tillage practices?
  • Change crop rotation?
  • Change fertilizer rates?
  • If a producer earns RF per hectare for a
    crop-fallow rotation, and earns RC for a
    continuous crop, the opportunity cost of
    switching from crop-fallow to continuous is (RF
    RC).

19
Factors Determining the Cost of C Sequestered in
Agricultural Soil (2)
  • Rates of change in soil C associated with a
    change in management
  • Changing from one practice to another increases
    soil C at an annual average rate of ?c
    tonnes/ha/yr
  • E.g., in Montana, changing from a crop-fallow SW
    rotation to continuous SW gives an average value
    of ?c ? 0.4 t/ha/yr
  • In Senegal, increasing fertilization and organic
    matter incorporation gives ?c ? 0.4 -- 0.8
    t/ha/yr

20
Factors Determining the Cost of C Sequestered in
Agricultural Soil (3)
  • Measurement Contracting costs
  • Measuring ?c for each agroecozone and each type
    of practice
  • Monitoring compliance with contracts
  • Other transactions costs

21
Factors Determining the Cost of C Sequestered in
Agricultural Soil (4)
  • Cost of Producing 1 ton of C
  • (farm opp. cost) contract costs
  • (RF RC)/?c contract costs
  • E.g. if opp cost 10/ha/yr and ?c 0.4 t/ha/yr
    then opp cost/t 10/0.4 25/t

22
Factors Determining the Cost of C Sequestered in
Agricultural Soil (5)
  • A contract could specify
  • Location (type of soil climate)
  • Type of cropping history (SW crop-fallow)
  • Type of cropping practices to be used (no-till
    corn beans, or continuous SW)
  • How many years
  • Carbon rate and price
  • Penalty for default

23
Estimating Economic Potential for Soil C
Sequestration Using Biophysical and Economic
Simulation Models
24
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25
Simulated participation in carbon contracts,
Machakos, Kenya
26
Simulated participation in carbon contracts,
Senegal peanut basin (R denotes percent of crop
residue incorporation, TC denotes transaction
cost in dollars per hectare per season)
27
Rate of change in soil carbon versus poverty gap
with carbon contracts, Kenya and Senegal case
studies (Left-most point corresponds to a zero
carbon price, the price increases to 200/MgC at
the right-most point)
Kenya
Senegal
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