The challenge of reducing agriculture’s greenhouse gas emissions

One of the innovations proposed in the Commission’s communication on the CAP post-2013 is that more resources in both Pillar 1 and Pillar 2 should be devoted to helping agriculture to mitigate and to adapt to climate change.

“Although GHG emissions from agriculture in the EU have decreased by 20% since 1990, further efforts are possible and will be required to meet the ambitious EU energy and climate agenda. It is important to further unlock the agricultural sector’s potential to mitigate, adapt and make a positive contribution through GHG emission reduction, production efficiency measures including improvements in energy efficiency, biomass and renewable energy production, carbon sequestration and protection of carbon in soils based on innovation. “

In terms of mitigation, the challenge for agriculture is to identify cost-effective mitigation measures which can help the agricultural sector to contribute to challenging greenhouse gas emission reduction targets and the long-term decarbonisation of society. A new article by Dominic Moran and his colleagues at the Scottish Agricultural College which appears in the latest issue of the Journal of Agricultural Economics (may be behind paywall) addresses this issue in the UK context and shows just how difficult the task will be.

The UK is committed to a very ambitious climate change target of reducing national emissions by 80% of 1990 levels by 2050 under its Climate Change Act, 2008. Emissions from agriculture contribute around 8% of the national total. Under the Act, an independent Committee on Climate Change has the job of developing emission reduction targets for each sector not in the EU Emissions Trading Scheme. It recognises that abatement possibilities and costs differ across sectors, so it is developing marginal abatement cost curves (MACC) for each sector to help it set these targets in an economically efficient manner. The new article presents a MACC for UK agriculture and describes the assumptions and methodology behind the approach.

A MACC shows a schedule of abatement measures ordered by their specific costs per unit of carbon dioxide equivalent abated, where the measures are additional to mitigation activity that would be expected to happen in a ‘business as usual’ (BAU) scenario. By comparing the unit marginal abatement cost to the shadow price of carbon, the efficient reduction in emissions can be calculated and the appropriate carbon budget or target set for a sector (the procedure is indicated in the figure below which is taken from the article).

UK MACC curve

The UK MACC curve is characterised by a strong polarity. The researchers conclude that their central feasible potential estimate for abatement would be around 17% of 2005 emissions by 2022, assuming a shadow price of carbon of £36/tCO2e, of which around 12% of current emissions might be abated at negative or zero cost. The cost effectiveness of identified abatement measures beyond this point worsens dramatically and in any event does not enlarge the abatement potential significantly – all abatement measures regardless of cost would reduce UK emissions from agriculture by just 22%.

Improved nitrogen management on arable farms, improved animal genetics and both on-farm and centralised anaerobic digestion are the main abatement measures identified as being cost-effective. Interestingly, the potential of carbon sequestration in grassland does not appear to be identified as a potential abatement measure.

The authors attach a number of caveats to their results. Their approach is to build the agricultural MACC from the bottom up, costing each individual abatement measure by adding it as a constraint to a representative farm optimisation model. The advantage of this approach is that it better allows to take account of the diversity and heterogeneity of farm production, but it is also very demanding of data. The authors found that it was very difficult to get up-to-date estimates of the costs of adopting many of the abatement measures they reviewed.

They make the important point that the abatement potential of any stand-alone measure will be influenced by the simultaneous adoption of other measures. For example, if a farm implements biological fixation, then less nitrogen fertiliser will be required, lessening the extent to which nitrogen fertiliser can be reduced. They allow for this by applying an interaction factor each time an abatement measure is implemented which reduces (or sometimes increases) the abatement potential of subsequent measures.

The authors focus on the abatement potential of agricultural production. Their MACC explicitly excludes emissions from energy use and transportation (which are addressed in the MACCs for these sectors). It also excludes conversion of land use to forestry and the use of land to produce agricultural feedstocks for biofuels. In the latter case, the mitigation benefit accrues to the transportation sector when biofuels substitute for fossil fuels (let us recall that the extent of the saving, especially when indirect land use change is factored in, is very disputed).

The methodology explicitly recognises that there is likely to be a gap between the maximum technical abatement potential and the feasible potential, which will depend on the adoption rate of the measure by farmers. Their central estimate quoted above is based on an explicit assumption regarding adoption of the various abatement measures.

The researchers draw attention to the fact that some of their abatement measures would probably not be recognised for the purposes of calculating the national emissions inventory. This highlights the problem of Monitoring, Verification and Reporting of emission reductions which are dependent on particular management behaviours across tens of thousands of farms. They estimate that not recognising what they call ‘indirect measures’ (measures that reduce emissions indirectly as opposed to a reduction in animal numbers which is seen as a direct measure) would have the effect of reducing the abatement potential in agriculture by around two-thirds. In other words, the cost effective abatement potential that would be recognised in the national inventory would be only around 6% of current emissions – a far cry from the overall 80% reduction sought by the UK government.

The researchers exclude a reduction in animal numbers as a potential abatement measure, on the grounds that this would simply lead to the displacement of production to other countries, with uncertain effects for global emissions. While this is a valid concern, it also highlights the weakness in the MACC approach which concentrates solely on production behaviour and ignores consumption behaviour.

It is very hard to see how we can decarbonise the food system, more broadly defined, without tackling consumption habits and particularly meat consumption. While this is not a call for a move to complete vegetarianism, some reduction in meat consumption in developed countries would seem beneficial to health and absolutely necessary for climate change mitigation.

Note: Front image copyright Thorsten Wagner and licensed for reuse under Creative Commons licence 2.0.

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