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28.04.15 Economic Assessment of GHG mitigation options

28th Apr 2015

A European Joint Research Centre report was published in February of this year entitled an economic assessment of GHG mitigation policy options for EU agriculture. The general conclusion of this report doesn't make for optimistic thinking.  The results from the modelling highlight the potential for future GHG reduction targets to decrease EU food production, lower EU competitiveness with the resulting leakage in emissions possibly outdoing any mitigation effort in Europe.

This report comes after a lot of clever modellers and statisticians have developed a model which assesses the impact on economics and reduction in GHG emissions from a range of scenarios as we move forward.  Its important to remember however, that this is just using modelling data, and although its useful to look at ‘what if’ scenarios, the diversity and uniqueness of our industry make it inherently difficult to predict and model.

Agriculture's GHG emissions currently account for 10% of total EU GHG emissions.

And this (due to European’s reporting format) doesn’t include emissions from carbon dioxide (that arise from land use change, energy consumption and fertiliser production).

The main sources of EU agricultural emissions are:

Nitrous oxide emissions from soil management (52% of total emissions in the EU), mainly due to application of manure and mineral N fertiliser.

Methane emissions – from enteric fermentation (32%) from grazing livestock

Manure management – (16%), emissions of methane and nitrous oxide during storage and treatment of manure.

Since 1990 agricultural GHG emissions have decreased at an EU level by 23%, and this can be attributed to several factors including an increase in farm productivity, a decrease in cattle numbers and improvements in farm management practices, and development and implementation of agriucultural and environmental policies.

Modelling

Let me first confess that I am not a modeller, and having read this report twice, I will try and highlight the important bits (and not confuse things further).

The model used for this analysis takes into account the effect of implementing policies designed to reduce emission on economics, agricultural production and trade potential (globally).

As part of this 5 different farm based mitigation techniques were looked at as possible methods that could be used on-farm to achieve reduction targets mandated by policy.

These were:

Farm scale and community based AD with the AD system digesting manure and slurries and the biogas collected.

Use of nitrification inhibitors to increase the efficiency of N applied and at the same time reduce nitrous oxide emissions from mineral fertilisers.

A better timing of fertilisation in crop need / uptake and the applying of mineral fertilisers and manure are more geared to each other which can lead to higher yields and /or lower fertiliser requirements.

Precision farming as a crop management concept to respond to inter and intra field variability in crops

Changes in composition of animals’ diet – altering feed mix of ruminants to maintain production but reduce methane emissions.

It is assumed for this model that we are in 2030 and all these technologies are available to farmers commercially (not currently the case for all of these, especially the additives for ruminant diets).

The model then tested changing policy towards reducing GHG emissions from agriculture to assess the impact on the industry economically. These included setting mandatory targets for reducing emissions by 19 or 28% by 2030 (compared to 2005). There was then a division to look at the effect of allowing trade in emission permits, and instead of enforcing mandatory reduction levels, using subsidies to encourage farmers to reduce emissions voluntarily (and receive payments for doing so). This was all compared to a control situation where business as usual continued.

What did the model find out?

The model showed that implementing mandatory emissions reduction targets impacted on agricultural production in the EU especially for livestock in terms of decreased food production and economic returns. The model also showed that the more flexible the mitigation policy is, the less the effects are on EU production levels and ‘leakage’ of emissions (where emissions are passed to another industry or country to fulfill the need for the product).

What does it all mean?

This is just a study to start to look at what the effect would be of implementing different policy options and isn't therefore going to be implemented. It does however highlight the complexity of the issues and the need for improved research to allow for commercially available (and rigorously tested) products that will help to reduce methane emissions from livestock and nitrous oxide emission from cropping. As well as that we need a sensible way to reach sensible targets, recognising that there is no ‘one size fits all’ solution.

There are things that we all as farmers can do to improve resource use efficiency on-farm which will lead to a reduction in GHG emissions. This starts with scrutinising current business operations and asking the question as to where it may be possible to improve efficiencies, reduce costs and improve climate credentials.

To read the full report click here.