james neumann principal february 24, 2011

IEc

INDUSTRIAL ECONOMICS, INCORPORATED

Responding to Climate Change in ECA Agriculture:

Impact Assessments and Menu of Adaptation Options for Albania and Uzbekistan

James NeumannPrincipal

February 24, 2011

INDUSTRIAL ECONOMICS, INCORPORATED 2

Overview

• Objectives of the study and consulting team

• Study process and timing

• Modeling approach – impacts and adaptation

• Stakeholder/farmer consultations

• Summary of results – Albania and Uzbekistan

• Overall recommendations – Albania and Uzbekistan


Objectives of the Study

“Enhance the ability of four countries in Europe and Central Asia (ECA) to mainstream climate change adaptation into agricultural policies, programs, and investments.”

• The four countries are:• Albania• Moldova• Macedonia• Uzbekistan

• Strategies used:• raising awareness of the threat• analyzing potential impacts and adaptation responses• building capacity among national and local stakeholders

• A key product of the work is a menu of adaptation measures for the agriculture sector – including crops, water resources, and livestock.


Study Components and Work Flow

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Key Consulting Team Members

• James Neumann, IEc, Project Manager• Kenneth Strzepek, Univ. Colorado and MIT,

Technical Director• Ana Iglesias, Univ. of Madrid, Agronomist and Crop

Modeler• Peter Droogers, FutureWater, Crop and Water

Resources Modeler• Janusz Kindler, Warsaw University of Technology,

Water Resources Expert• Richard Adams, Oregon State Univ. and Brent

Boehlert, IEc, Agricultural Economists• Samuel Fankhauser, Grantham Research Institute

on Climate Change and the Environment, Economist & Expert Reviewer

• Andrew Schwarz, IEc, Participatory Process Expert


Modeling Approach

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Modeling Approach – Climate Scenarios

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This Study’s

Scenario Global General Circulation Model Basis for the

Scenario Relevant IPCC SRES Scenario

High Impact Goddard Institute for Space Studies, Model EH

(US) A1B Medium Impact

Center for Climate Modeling and Analysis, Coupled GCM 3.1 (Canada) A1B

Low Impact Commonwealth Scientific and Industrial Research

Organization, Mk 3.0 (Australia) B1

• Select three scenarios from among 56 IPCC AR4 options, intent is to capture relevant range for agricultural yield

• Selection based on Climate Moisture Index, combines temperature and precipitation forecast

• “Medium Impact” is roughly the mean; “High Impact” is driest, “Low Impact” is wettest.


Modeling Approach – Crop Yield and Water Resources

• Crop Modeling – Process-based models (e.g., AquaCrop) for up to 7 select crops – country nominates crops for focus

• Water Resource Availability “Screening Tool” – CliRun – projects runoff for all key basins in country

• Basin-level Water Balance Modeling – WEAP for all large basins in each country

• Agricultural water demand from crop model• M&I water demand projections from EACC study• Climate-induced water supply changes from CliRun


Other Dimensions of the Impact Assessment

• Geographic Scope: Agro-ecological zone, with representative crop modeling for each region.

• Time: Decadal averages from 2010 to 2050 (i.e., 2010s, 2020s, 2030s, 2040s)

• Economic Baseline: current conditions/markets, also IFPRI projections of market prices through 2050.

• NOTE: Goal of quantitative analysis is to estimate marginal effect of adaptation measures on farm-level net income, so it includes two components:

• Effect of measure on closing adaptation deficit to current climate

• Effect of measure in responding to forecast changes in climate


Capacity Building Workshop

• Conducted a formal training workshop at a central location for a specific impact assessment technique.

• In Albania and Uzbekistan, training focus was:

• Process-based crop modeling (e.g., AquaCrop)

• Also touched on how to integrate with basin-level water resources modeling (e.g., WEAP)


Farmer Engagement - Stakeholder Consultations

• Conducted in each AEZ, two sets of meetings

• First meeting, present draft impact results, and ask:• Experts/analysts: Do the crop, livestock, water

modeling results look reasonable to you?• Farmers: What options would you employ in response

to these outcomes? What other ideas do you have?

• Second meeting, present draft adaptation recommendations, and ask:

• Which of the recommended options do you favor?• What barriers do you see to implementing the

recommendations (economic, institutional, policy)?• What options are missing from our list?


Develop Initial Menu of Adaptation Options

Consider results of stakeholder consultations and quantitative modeling, six step process:

1. Generate farm-level estimates of net benefits of adaptation options, using readily available data

2. Rank initial set of adaptation options based on net benefit criteria

3. Add a second, qualitative ranking based on the recommendations of our expert team

4. Assess whether there is “win-win” aspect to measure

5. Add a third ranking based on stakeholder consultations

6. Consider other, country-level policy options (e.g., changes to water allocation scheme) qualitatively based on assessment of existing adaptive capacity


Results – Albania

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Baseline

2040s Low Scenario

2040s Medium Scenario

2040s High Scenario


2040s Low Scenario

2040s Medium Scenario

2040s High Scenario

Baseline


Crop Yield Effects – No Adaptation

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Crop Coastal

Lowlands Interme-

diate Northern

Mountains Southern Highlands

Alfalfa irrigated 2% 2% 4% 8%

Alfalfa non irrigated -1% -1% 4% 0%

Grapes -8% -10% -6% -10%

Grassland -2% 1% 3% 1%

Maize -1% -2% -4% 7%

Olives -1% -8% -5% -5%

Tomatoes 0% -2% -3% -1%

Watermelons -1%

Wheat 4% 3% 11% 8%


Range of Crop Yield Effects Across Scenarios

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Crop Coastal

Lowlands Interme-

diate Northern


Alfalfa irrigated 1% 0 to 2% 2% 6 to 8%

Alfalfa non irrigated -9 to 7% -9 to 11% -5 to 9% 0 to 4%

Grapes -14 to 3% -14 to 5% -11 to 4% -12 to -5%

Grassland -10 to 7% -9 to 13% -9 to 10% 1 to 7%

Maize -1 to -2% -7 to 4% -8 to 0% 5 to 10%

Olives -4 to 0% -12 to 3% -11 to 2% - 6 to -2%

Tomatoes -1 to 0% -3 to -1% -6 to -1% -1%

Watermelons -2 to 0%

Wheat 2 to 3% 1 to 2% 3 to 6% 3 to 9 %


Albanian Crop Water Demands – Percent Increase

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Scenario Crop Interme-

diate Coastal

Lowlands Northern


HIGH

Alfalfa irrigated 5% 4% 0% -6%

Maize 25% 11% 11% 6%

Tomatoes 44% 18% 8% 29%

Watermelons 15%

MEDIAN

Alfalfa irrigated -3% -2% -6% -6%

Maize 11% 7% 6% 9%

Tomatoes 25% 14% 4% 24%

Watermelons 9%

LOW

Alfalfa irrigated -11% -5% -5% -8%

Maize -1% -4% -2% 0%

Tomatoes 2% 1% -10% 17%

Watermelons -4%


Albania Monthly Runoff Estimates

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Forecast Monthly Water Balance in 2040s

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BCA for Rehabilitating Drainage in Lowlands AEZ

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Farmer Consultation Results

Responses differed in each AEZ, but in general top three ranked adaptations were:

• Rehabilitate infrastructure: Depending on the specific climate related risk faced by each AEZ, the priority infrastructure was for either irrigation or drainage.

• Increase institutional capacity: Increase the reach of extension services, focus on technical training, seed and crop selection knowledge transfer, and increasing the availability of hydro-meteorological information.

• Improve market structure: Farmers emphasized that overall market effectiveness would assist in making farms more productive and provide a “win-win” adaptive response. Need for processing and storage facilities.

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Overall Recommendations - National

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DESCRIPTION OF RECOMMENDED

ADAPTATION MEASURE

SPECIFIC FOCUS AREAS

RANKING

NET ECONOMIC BENEFIT:

QUANTITATIVE ANALYSIS

NET ECONOMIC BENEFIT: EXPERT

ASSESSMENT

“WIN-WIN” POTENTIAL

FAVORABLE

EVALUATION BY

LOCAL FARMERS

Improve Extension Capacity

Seed varieties; more efficient use of water

High High High High

Improve hydrometeorological capacity

Short-term temperature and precipitation forecasts

High (based on “break-

even” analyses)

High High High

Improve agricultural information for policy support

Soils (types and drainage qualities), General crop suitability

Not evaluated High High Not mentioned

Provide incentives to consolidate farm holdings

None identified Not evaluated Not mentioned

Potentially High

High

Encourage private sector adaptation

Seeds, livestock breeds, particularly on international market

Not evaluated Potentially High

High Not mentioned


Recommendations – AEZ Level

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RELEVANT AEZS FOR MEASURE

DESCRIPTION OF

RECOMMENDED

ADAPTATION MEASURE

CROP AND LIVESTOCK

FOCUS

RANKING

ECONOMIC BENEFIT:

QUANTITATIVE ANALYSIS

ECONOMIC BENEFIT: EXPERT

ASSESSMENT

“WIN-WIN” POTENTIAL

FAVORABLE EVALUATION

BY LOCAL FARMERS

Lowlands, Intermediate, Southern Highlands

Improve Drainage Infrastructure

Tomatoes, Maize, Grapes, Wheat

High High High High

Lowlands Improve irrigation water quality

Tomatoes, Maize, Watermelon

Not evaluated Not mentioned

High High

Intermediate Improve irrigation water use efficiency

Maize High Not mentioned

High Medium

Intermediate, Southern Highlands, Northern Mountains

Rehabilitate irrigation system

All irrigated crops

Low to Medium depending on

AEZ

Not mentioned

High High

Lowlands Improve access to climate-tolerant crop varieties

Tomatoes, Grapes, Wheat, Maize, Watermelon

High Medium Medium High

All Optimize fertilizer application

Tomatoes, Olives, Wheat

High Not mentioned

High Not mentioned

All Transition livestock varieties to improve high temperature tolerance

Beef cattle, Chickens

Low in short-term, Medium in long-term

Not mentioned

Low No support for changing animal types, only for new

varieties

Particular to Korca region

Adopt hail nets Orchard crops, particularly apples

High (from literature values)

Not mentioned

High High

Particular to Shkodra region

Floodplain land-use management measures

All Not evaluated High High Medium


Uzbekistan AEZs

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Uzbekistan River Basins

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Monthly Temperature and Precipitation for Piedmont AEZ

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Uzbekistan – Yield Changes

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Desert & Steppe

Desert & Steppe Highlands

Piedmont zone

Piedmont zone

Crop East West South East SW

Alfalfa 3% 2% 3% 10% 2%

Apples -2% -2% -1% -2% -2%

Cotton -1% -2% -1% -1%

Grassland 12% 11% 14% 17% 9%

Potatoes -1% -2% -1% 0% -1%

Tomatoes -1% -2% 0% 0%

Wheat -1% -1% -1% 2% -2%


Range of Crop Yield Results Across Climate Scenarios

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Crop Desert &

Steppe East Desert &

Steppe West Highlands

South Piedmont Zone East

Piedmont Zone SW

Alfalfa 0 to 3% 0 to 2% 0 to 2% 9 to 9% 0 to 2%

Apples -6 to 0% -5 to -2% -6 to 0% -6 to -1% -6 to -1%

Cotton -3 to 0% -3 to -2% -3 to -2% -3 to 1%

Grassland 0 to 16% -6 to 12% -1 to 7% 8 to 9% -3 to 10%

Potatoes -3 to 1% -3 to -1% -4 to 0% -3 to -1% -4 to 1%

Tomatoes -4 to 2% -3 to -1% -2 to -1% -6 to 3%

Wheat -8 to 1% -4 to 1% -10 to -2% -1 to 2% -9 to 0%


Crop/Irrigation Water Requirements

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Desert & Steppe

Desert & Steppe Highlands

Piedmont zone

Piedmont zone

Scenario Crop East West South East SW

LOW

Alfalfa -3% -3% -4% -17% -2% Apples 4% 3% 2% 6% 3% Cotton 2% 4% 3% 2% Potatoes 2% 3% 1% 4% 0% Tomatoes -1% 0% -2% -2% Wheat 4% 2% 3% -17% 4%

MEDIAN

Alfalfa -4% -3% -3% -16% -2% Apples 1% 3% 1% 6% 1% Cotton -1% 3% 4% -2% Potatoes -1% 2% 0% 7% -3% Tomatoes -4% -2% 0% -5% Wheat 2% 0% 4% -19% 2%

HIGH

Alfalfa 1% 0% 1% -15% 1% Apples 9% 7% 10% 29% 9% Cotton 5% 5% 7% 6% Potatoes 6% 6% 8% 23% 6% Tomatoes 3% 3% 6% 5% Wheat 12% 6% 14% -7% 12%


Mean Monthly Runoff and Irrigation Demand – 2040s

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Projected Unmet Water Demand for Irrigation

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BASIN

CLIMATE SCENARIO

BASE LOW MEDIUM HIGH

IRRIGATION

Syr Darya East1,087,90

6 (19.2%) 615,927 (11.6%) 940,601 (17.5%)3,627,99

1 (51.6%)

Syr Darya West 0 (0.0%) 122,023 (1.9%) 325,942 (4.7%)2,817,03

1 (34.4%)

Amu Darya 424,655 (1.8%)2,174,06

9 (8.7%)4,807,84

8 (17.8%)8,405,24

3 (28.9%)

Aral Sea East 0 (0.0%) 0 (0.0%) 0 (0.0%) 0 (0.0%)

Aral Sea West 0 (0.0%) 0 (0.0%) 0 (0.0%) 0 (0.0%)

Subtotal1,512,56

0 (4.2%)2,912,01

9 (8.0%)6,074,39

1 (15.4%)14,850,2

65 (33.5%)


Farmer’s Preferred Adaptation Options

• Increase farmer know-how and skills through capacity building

• Improve extension services to small farmers. • Improve farmers’ skills in countering the increased

incidence of pests, especially for wheat and apples• Improved training for pest-resistant, and/or heat-

stress-tolerant seed and crop variety selection from both international and national markets

• Provide information on improving on-farm water use efficiency.

• Invest in on-farm irrigation infrastructure• Improve the availability/affordability of crop

insurance

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Recommendations – National Level

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DESCRIPTION OF RECOMMENDED

ADAPTATION MEASURE

SPECIFIC FOCUS AREAS

RANKING

NET ECONOMIC BENEFIT:

QUANTITATIVE

ANALYSIS

NET ECONOMIC BENEFIT: EXPERT

ASSESSMENT

“WIN-WIN”

POTENTIAL

FAVORABLE

EVALUATION BY

LOCAL FARMERS

Improve extension capacity

Seed varieties; more efficient use of water

High High High High

Improve crop insurance affordability and streamline implementation

Drought damage; pest damage

Not evaluated High High High

Encourage private sector adaptation

Seeds, from international marketExport options for vegetable crops

Not evaluated Potentially High

High Not yet mentioned


Recommendations – AEZ Level

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RELEVANT AEZS FOR MEASURE

DESCRIPTION OF

RECOMMENDED

ADAPTATION

MEASURE

CROP AND

LIVESTOCK FOCUS

RANKING

ECONOMIC BENEFIT:

QUANTITATIVE

ANALYSIS

ECONOMIC

BENEFIT: EXPERT

ASSESSMENT

“WIN-WIN”

POTENTIAL

FAVORABLE

EVALUATION BY LOCAL

FARMERSAll Improve

irrigation water use efficiency

Tomatoes (all but Highlands)PotatoesWheatApples

High High High High

Piedmont – Syr Darya Basin

Rehabilitate irrigation system

All irrigated crops

High but dependent on AEZ and basin water availability

High High Medium

All Improve access to climate- and pest-tolerant crop varieties

Tomatoes, Potatoes,Apples,Grapes, Wheat, Cotton

High Medium High High

All Optimize fertilizer application

Tomatoes, Olives, Wheat

High, but incomplete

analysis

High High Medium

All Transition livestock varieties to improve high temperature tolerance

Beef cattle, Chickens

Not evaluated

Not mentioned

Low Medium; some

support for new

varieties


Final Thoughts

• All countries have been receptive to the concept, and generally supportive of our work

• Cooperation from local governments was initially good, but data was very sparse – needed to use global data in many instances

• Farmer workshops were more productive and engaging than expected – more could be done with that format in follow-up

• Major challenge in separating current adaptation deficit from needs to adapt to changing climate – but perhaps we can do some work in that direction in regional report

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Detailed BCA Results – Sensitivity Analyses

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IEcINDUSTRIAL ECONOMICS, INCORPORATED

617.354.0074

james neumann principal february 24, 2011

Documents

clirun industrial economics

uzbekistanindustrial

iecindustrial economics

representative crop

menu of adaptation measures

menu of adaptation options

low impact

impact assessments