Climate change and agriculture

1. Climate change and agriculture Evaluating the impacts of mitigation and adaptation projects Irina Klytchnikova, Economist, World Bank Brasilia, November 2009

2. Why are we talking about climate change today? • Impact of climate change on agriculture in Latin America and adaptation options in agriculture • Potential for mitigation of GHGs in agriculture in Latin America and mitigation options in agriculture • Through the lens of impact evaluation

3. Impact of climate change on agriculture in latinamerica

5. Potential Impact on Agriculture — Projected Percentage Change in Agricultural Productivity in 2080 Note: Scenario: SRES A2. Source: Cline 2007.

6. Extreme weather events will be more frequent, often leading to natural disasters • Example: more consecutive dry days • México, Central America, Brazil, Bolivia, Chile (2030) • Affected areas are in many cases already exposed to high drought risk • But in Central America risk also of more intense hurricane-related rainfall: • Losses from hurricanes could triple by 2020-25, reaching 6% of GDP Source: WB staff calculations with data from 8 global circulation models.

7. High GHG mitigation potential in agriculture in latinamerica

8. LAC’s Share of Global GHG Emissions : 12.5% overall, but 31% of LULUC Source: Climate Analysis Indicators Tool (CAIT), Version 5.0. Washington, DC: World Resources Institute (WRI), 2008.

9. By country, LULUC emissions are highest in Brazil, but other countries’ LULUC emissions also are high as share of their total Share of emissions from LULUC by LAC Country (2000) Source: Climate Analysis Indicators Tool (CAIT) Version 5.0. (Washington, DC: World Resources Institute, 2008).

10. Beyond the forests: agriculture has high technical mitigation potential in LAC Source: Smith and others (in press).

11. Many mitigation options in agriculture and many of them low-cost Mitigation costs in agriculture for two climatic zones typical of the LAC region. Notes: Estimated marginal costs of mitigation are only indicative of the relative magnitudes. Actual costs significantly vary depending on the local climatic and socio-economic conditions. The estimated costs of manure management (around US$200 per tCO2-eq.) and water management (around US$2,500) are not shown in the figure. The estimated marginal cost of agro-forestry ranges from a high of US$119 in cool-dry climates to a low of $28 in warm-moist zones. For tillage, the range is from US$7 to US$30 according to these estimates. Source: Smith and others (in press).

12. mainstreaming adaptation to climate change in agricultural projects

13. Examples of adaptation measures • Genetic improvement – wheat, maize, oilseeds • Integrated watershed management • Improvement to irrigation systems • Revalidation of agricultural technologies • Early alert system • Crop diversification Example of a World Bank project • Mainstreaming Climate Change Adaptation in Irrigated Agriculture in China (2008) • Studies to set priorities in adaptation and develop national adaptation strategies in Latin America

14. But are adaptation practices adopted by farmers?

15. Mitigation of climate change through better soil and pasture management

16. (Source: Pagiola and Rios, forthcoming) Case Study of the Integrated Regional Silvopastoral Project: Quindio, Colombia

17. Supporting Silvopastoral practices helps store carbon and protect biodiversity • Regional Integrated Silvopastoral Approaches to Ecosystem Management Project in Colombia, Costa Rica, and Nicaragua • (1) planting high densities of trees and shrubs in pastures, thus providing shade and diet supplements while protecting the soil from packing and erosion; • (2) cut and carry systems, in which livestock is fed with the foliage of specifically planted trees and shrubs (‘fodder banks’) in areas previously used for other agricultural practices; and • (3) using fast-growing trees and shrubs for fencing and wind screens.

18. Benefits to farmers • The on-site benefits of silvopastoral practices to land users • additional production from the tree component, such as fruit, fuelwood, fodder, or timber • maintaining or improving pasture productivity by increasing nutrient recycling • diversification of production • Off-site benefits • a major role in the survival of wildlife species by providing scarce resources and refuge • helps protect native forest plants • shelter for wild birds • help connect protected areas • carbon fixing in soil and trees

19. Costs to farmers • While these benefits can be important, they are often insufficient by themselves to justify adopting silvopastoralpractices • Upfront tree planting costs and benefits several years later • Estimates prepared for the project show rates of return of between 4 and 14 percent, depending on the country and type of farm (Gobbi, 2002)

20. How to evaluate the impact of the program? First, in theory…

21. Randomized trial, “the gold standard” • Randomized trial, “gold standard” in impact evaluation • In Mexico, the ending of the first round of PSAB contracts in 2008 provided an opportunity for a randomized trial. • Proposal was that only half of the communities whose contracts were expiring, chosen at random would be re-enrolled (all had indicated their desire to do so). • The land use choices of the entire cohort would then be monitored for several years. • Assess the effect of actually participating to be assessed (Pagiola, 2007). • But – not implemented due to political constraints

22. Control group method, not as golden but more feasible • Control group method with random assignment of participants to control and treatment group • Preferable from the evaluation point of view but may be politically difficult • Solution: plan project implementation in stages, randomly assign participants to stages • Another solution: Control group method with non-random assignment • Control group consisting of households with similar characteristics (farm size, type of activities, agroecological conditions) • Problem: control group will very likely turn out to be different and estimation of program impact may be biased

23. Evaluating the effect of a PES program with a control group Control group with very similar characteristics as the treatment group (farmers who would like to and cannot participate in the program) Treatment group (farmers who would like to participate in the program and do)

24. Evaluating the effect of a PES program and technical assistance (TA) Treatment group (receives PES) Treatment group (receives PES and TA) Control group (no PES and no TA) Control group (TA but no PES) COMMUNITY WITH TA COMMUNITY WITHOUT TA

25. But how large should a sample be? • Generally, the sample size will need to be larger the greater is the number of treatments for which we want to evaluate impact • So, to evaluate the effect of PES with and without Technical Assistance (or of Technical Assistance alone) the sample size will need to be larger • How large? Remember Laura’s presentation…

26. How to evaluate the impact of the program? Now, in practice…

27. Hypothesis • Receiving PES isan incentive tochangeland use • ReceivingTechnicalAssistance (TA) isan incentive tochangeland use

28. Studycharacteristics • PES Recipients • Withtechnicalassistance (48) • Withouttechnicalassistance (24) • Control group • Without PES and withouttechnicalassistance (29) • Chosenfromtheuniverse of thosewhowantedtoparticipate in theprogram

29. Impact of PES

30. Impact of PES

31. What about the impact on incomes and are men and women affected differently?

32. Is the payment too low or too high?

33. What tools are available to improve project’s targeting to maximize environmental benefits?