Using Agri-Environmental Indicators in Policy: The Canadian Experience

1. Using Agri-Environmental Indicators in Policy: The Canadian Experience Greg Strain, DirectorAgri-Environmental Policy Bureau

2. Achieving environmental sustainability in agriculture has become more complex than ever… • Environmental issues are not new to agriculture, but public scrutiny of environmental costs of agricultural production has been increasing: • Water quality issues, pesticide run-offs, fish kills • Restrictions on intensive livestock operations • Increased consumer awareness of environmental standards of food production • Environmentally sustainable production is increasingly an issue at an international level. • key to demonstrate Canada is meeting emerging international standards to ensure continued market access. • Agriculture is also vulnerable to environmental problems • Water shortages • Invasive species

3. There are many questions posed by policy decision-makers… • What key factors are affecting environmental performance of the sector, and how will it evolve? • What are the cost and benefits of current environmental trends? • What is the relationship between policies / programs and environmental health? • Which mix of policy and/or program measures is likely to achieve desired environmental outcomes with the most efficiancy?

4. All decision-makers share a common need for environmental information… • Objective and reliable information • Is the current environmental performance satisfactory • Expected future evolution • How is the performance likely to change in response to decisions they make • Historic approaches have focussed on economic information, and largely ignored environmental impacts • Risk achieving economic goals at the expense of environmental objectives • Work is underway to develop and refine agri-environmental information and tools to integrate this information in decision-making • Agri-Environmental Indicators • Integrated Economic-Environmental Modeling • Agri-Environmental Valuation

5. Agri-Environmental Indicators (AEIs)… Canada Land area: 909 million ha Farm area: 67.5 million ha Cultivated land: 61 % Pastureland: 30 % Other land : 9 % Average farm area: 273 ha

6. Agri-Environmental Indicators (AEIs)… • General approach • Risk-based models • Integration of biophysical data (climate, soil, landscape) with land use and land management data (remote sensing, surveys) • Criteria • Policy relevant • Science-based and objective • Understandable and unambiguous to interpret • Regionally responsive • Feasible to obtain • Sensitive to changes in land use and land management • Calculated at Soil Landscapes of Canada polygon level • Scale 1:1,000,000 • In Canada, there are over 3,000 SLCs with significant agricultural activity • Typical size varies (10,000 to 1,000,000 ha) • Model results can be extrapolated to broader scales

7. Integrated Economic-Environmental Modeling • Multidisciplinary approach • Bring quantitative, science-based information into the policy debate • Enable forward looking analysis to evaluate policy options and scenarios • Integrate economic model with environmental models • Policy Model : CRAM (Canadian Regional Agricultural Model) • Biophysical Models : Agri-Environmental Indicators • Assess various farm management scenarios relative to a Business as Usual (BAU) baseline • Generate information on • Land use change for major activities • Area of major crops • Summerfallow and tillage practices • Livestock numbers • Economic impact on both producers and consumers

8. Analytical Framework… • Economics and markets • Business as Usual Policy Scenarios modelled in CRAM Economic Outcomes • Policy Scenarios • select farm level actions for positive environmental impacts (BMPs) • select regions, commodities, costs, changes in productivity • determine realistic adoption rates • Changes in Resource Allocation vs. BAU • land use • cropping patterns • tillage practices • livestock numbers • Policy process • quantitative assessment • trade-off analysis AEI Models: soil, water and air quality; biodiversity Environm. Outcomes • Biophysical data: • climate • soils

9. A practical example: the Agriculture Policy Framework… • Under the APF, Canada’s Agriculture Ministers have agreed to: • accelerate environmental action, covering all farms • achieve measurable and meaningful environmental goals in the areas of air, water, and soil quality, and biodiversity • Significant new resources have been committed to support the actions needed to meet these environmental goals • Ministers agreed on indicators, targets, timetables and approaches for environmental goals related to: • air, water, soil, biodiversity and • farm environmental management • Integrated Economic/Environmental modeling used to set targets • AEIs used over time to assess results

10. T3 T2 A practical example: setting APF targets… High Standard Environmental performance T1 Baseline Low High Low Beneficial on-farm action Adoption of BMPs and Alternative Land Uses

11. A practical example: setting APF targets… • Needed an integrated analysis of expected environmental outcomes (all interconnected) • Nutrient Balance • carbon cycle • nitrogen cycle • Air Quality • GHG (CO2, N2O, CH4) • Ammonia, PM • Odour • Soil Quality • erosion • soil carbon • nitrogen • Water Quality • nitrogen • phosphorus • pesticides • pathogens • Farm Resource • Management • land use • crops • livestock • Biodiversity • habitat use • species at risk

12. A practical example: setting APF targets… • A suite of Agri-Environmental Indicators was selected, based on priorities and availability: • Risk of soil erosion from water and wind • Residual Soil Nitrogen and Risk of water contamination from nitrogen • Soil Carbon and Greenhouse gas emissions • Biodiversity - wildlife habitat • Scenarios were selected for the analysis – potential changes in key driving factors (land use, farm management): • Soil Management (increase conservation tillage, decrease summerfallow, increased use of forage in rotations, conversion of marginal land to permanent cover) • Pasture Management (increase use of complimentary and rotational grazing) • Nutrient Management (better matching of N to crop requirements) • Livestock Management (improve management of protein in diets) • Shelterbelts and Plantation Forestry (increase use of forestry on marginal land)

13. National Summary of the Percentage Change in AEIsfrom 2008 BAU for Low, Medium and High Adoption Rates A practical example: setting APF targets…

14. A practical example 2: GHG reduction… BAU without sinks BAU with sinks Gap (6.5 Mt) Mt CO2e 6% below 1990 Potential reductions from Business as Usual (BAU) [5 to 20 Mt with incentives]

15. Limitations of Analysis • Limited to management practices known to have beneficial environmental outcomes that are captured by existing models • Data availability poses constraints in modeling • Spatial differences between CRAM and AEI models • Lack of farm level cost information

16. Future Directions : Policy Analysis • Continue work on developing and improving the robustness of the models and quality of outputs • Climate Change – Mitigation and Impact & Adaptation • Update / Refine APF targets • Build on previous success in influencing the policy debate • Next generation of agri-environmental programming • Environmental Goods and Services • Strategic Environmental Assessments (e.g. WTO) • Develop the aspect of Agri-Environmental Valuation (economic valuation) • Express biophysical environmental indicators or trends in dollars • Allow true cost-benefit analysis of policy options

17. For more information… • Agri-Environmental Indicator Report (2005) • www.agr.gc.ca/env/naharp-pnarsa • Quantitative Analysis of the Impact of Agricultural Management Strategies on Environmental Indicators • http://www.agr.gc.ca/spb/rad-dra/publications/isie/ise_e.pdf