Economic assessments of practices and policies to address climate change and sustainable development for agriculture at global, regional and farm population scales

Abstract

The objective of this thesis is to address knowledge gaps, which can assist policy makers in preparing the agriculture sector for the challenges of addressing climate change. A range of methodologies are employed at different scales for these purposes. These include a global bioeconomic analysis and a global computable general equilibrium model to assess the global scale abatement potential of the ruminant sector (inclusive of cattle, sheep and goats), and the economic consequences of policies employed to achieve this potential. With the inevitable emergence of climate change policies and growing consumer expectations for improved environmental performance, these global analyses reveal that there is reasonable potential for the ruminant sector to contribute to global greenhouse gas (GHG) mitigation efforts, with the associated effectiveness and economic impacts varying widely depending on the choice of policy. The global scale analyses are complemented by a range of modelling assessments at the region and farm population scale in different smallholder production contexts, which reveal that there are also opportunities to exploit synergies between agricultural development, and climate change mitigation and adaptation objectives. It should be noted, however, that the global scale models are not formally linked to the smaller scale models (i.e. changes in the price and quantity variables in the global models are not used to update any of the variables in the smaller scale models).<br/> It was shown that the global abatement potential for the ruminant sector indicated by the marginal abatement cost curves constructed in this thesis, could be substantially amplified by a global carbon tax. However, due to its disproportionately harmful impacts on ruminant production in low income countries, the overall merit of this policy option is questionable. In contrast, the use a producer subsidy to compensate producers for their tax expenses could effectively address these issues, albeit for a much reduced global mitigation potential. Another key insight of this research is that a carbon tax could restructure the global cattle sector, increasing the share of cattle meat supplied by the dairy sector relative to the beef sector.<br/> Closing yield gaps for mixed smallholder farmers in several parts of Sub Saharan Africa, without the introduction of new technologies, could provide marked benefits for smallholder incomes and food supply, and reduce GHG emission intensities of production. Similarly, the intensification of beef production in Eastern Indonesia with improved feed from tree-legumes could deliver large increases in production and smallholder incomes and also lower the emission intensity of beef products. This innovation also has good potential for scaling up and is likely to benefit multiple value chain participants. It was also found that the costs of climate change could be partially offset by interventions based on increased fertilisation and the retention of crop residues for a population of mixed smallholder farmers in Sub Saharan Africa. Significantly, vastly different conclusions about the economic desirability of these practices were apparent when assessing their performance through the lens of the aggregate population, compared to considering the impacts on individual farms within the population.<br/> Despite the large variation in scales and methods utilised in this thesis, a number of cross-cutting themes emerged from the analyses. For instance, the economic advantages of targeting sectors and producers with practices that can contribute to climate change mitigation and adaptation for the least cost or highest return, were apparent at different scales of analyses. Related to this, positive synergies between producer profits and mitigation or adaptation outcomes were also found across the analyses, for a range of improved practices and policies. Further, benefits from the integration of crop and livestock enterprises were apparent in the different analyses, although some practices were shown to generate trade-offs between these enterprises. Finally, all the studies in this thesis touched upon the challenges associated with barriers to the adoption of improved practices.