Measures of Dispersion and Variability: Range, QD, AD and SD
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Economic analysis for mitigation alternatives - limits of MACCs by Andy Jarvis and Lini Wollenberg
1. Expert Workshop on NAMAs: national mitigation
planning and implementation in agriculture.
Rome, 16-17 July 2012. CCAFS and FAO.
Economic analysis for mitigation
alternatives - limits of MACCs
Jeimar Tapasco
Andy Jarvis
Lini Wollenberg
WWW.ciat.cgiar.org
Eco-Efficient Agriculture for the Poor
2. MAC Curve
McKinsey & Company (2010).
Eco-Efficient Agriculture for the Poor
3. MEXICO BRASIL
Source: World Bank (2010) Source: World Bank (2010)
UK Agriculture USA
Source: OECD (2010) Sorce: Lutsey (2008)Agriculture for the Poor
Eco-Efficient
4. MAC Curve for Colombia
World Bank and DNP
-Energy
- Transport
- Agriculture, Forestry and Other Land Use
Eco-Efficient Agriculture for the Poor
5. Agriculture Agroforestry Forestry
Annual Perrennial Tree +
Crops
Livestock Natural Plantation
or/and
Livestock
Efficient Oil Palm
Commercial
Fertilization Silvopastoral Systems
Forestry
(Case Study:
Plantations
Rice)
Pasture
Rubber Plantations
Improvement REDD+
Conversion of Pastures to Fruit Tree
Plantations
Crops in Cacao Nutritional
Histosols Complements
Low-Carbon
Ecological
Agricultural
Restoration
Practices
Eco-Efficient Agriculture for the Poor
6. Abatement
Potential Cost-
potential
area effectiveness
Intervention alternative (thousands
evaluated (US$/tCO2eq)
of
(ha) Min Max
tCO2eq/year)
Commercial Forestry
44,037 4,000,000 -4,4 -2,7
Plantations
Intensive Silvopastoral (ISS)
3.739.109 -49 0.6
Projects 43.819
Avoided Deforestation
65,874 2,250,000 -0.2 -0.2
(REDD Projects)
Conversion of Pastures to
1,938 359,320 -188 -25
Fruit Production
Rubber Plantations 1,786 260,000 -1,05 -0,67
Efficient Use of Fertilizers 38 170,000 -267 145
Pasture Improvement 54 51,487 -103 -62
Eco-Efficient Agriculture for the Poor
7. MAC Curve - Aggregate
130
30
MAC: US$/tCO2
(70)
(170)
(270)
- 10,000 20,000 30,000 40,000
Thousand tonnes of carbon saved/year
Rice Casanare (Irrigation) Rice Valledupar Mango Huila Small Mango Huila Large Avoca.Tolima Medium
Avoca. Tolima Large Mango Cundinamarca Small Avoca. Huila Medium Avoca. Huila Large Mango Cundinamarca Large
Rice Tolima Improve Pasture Meta Rice Casanare Mango Cundinamarca Medium Mango Boyaca Small
Improve Pasture Casanare Mango Tolima Small Rice Meta Improve Pasture Arauca Mango Tolima Large
Avoca. Risaralda Large Avoca. Antioquia Medium Avoca. Quindio Large SSPi Bajo-Cauca (Antioquia) Avoca. Risaralda Small
Avoca. Quindio Small Avoca. Caldas Large Mango Boyaca Large Avoca. Antioquia Large Avoca. Risaralda Medium
Avoca. Caldas Small Avoca. Quindio Medium Mango Antioquia Large Avoca. Antioquia Small Mango Boyaca Medium
Mango Antioquia Small Avoca. Caldas Medium Rice Guaranda y Nechi SSPi Eastern -Antioquia rest of the country (CIPAV)
SSPi CĂłrdoba SSPi Atlantico SSPi Sucre SSPi Uraba-Antioquia SSPi Northeast - Antioquia
Rice Jamundi Rice Cucuta
Eco-Efficient Agriculture for the Poor
8. CAUTION!!
Economic tools
must be
appropriate for
the problem at
hand.
Eco-Efficient Agriculture for the Poor
9. Overview of selected key limitations of the cost/supply
curve method*
• Negative costs (Not all cots were included)
• Strong focus on costs as selection criteria (there are other criteria)
• It does not include environmental and social benefit and costs
• Economic and technological uncertainty inherent to predicting the future
• Strong level of aggregation of the databases used
• High sensitivity relative to baseline assumptions (future)
• Ignoring interdependencies between measures
• High sensitivity to (uncertain) emission factor assumptions
*Fischedick et al. 2011.
Eco-Efficient Agriculture for the Poor
10. MAC Curve global GHG beyond business as usual 2030
Source: McKinsey & Company (2010)
Eco-Efficient Agriculture for the Poor
12. Conclusions
• There are a large number of potential mitigation
options that could be implemented at the national
level, with highly varying degrees of emissions
reductions, and associated costs for implementation
Eco-Efficient Agriculture for the Poor
13. .
Clear goals should
be set with any
emissions reduction
plan or strategy,
and these goals can
then be used as
criterion for
prioritization
Eco-Efficient Agriculture for the Poor
14. MAC curves are a useful input to
evaluating priority interventions,
but…….should be interpreted with
caution.
Incorrect use of the MAC curve for
selecting interventions could lead to
failure to prioritize the most
appropriate interventions.
Eco-Efficient Agriculture for the Poor
15. Private
perspective
Public
perspective
Eco-Efficient Agriculture for the Poor
19. Thanks!
Eco-Efficient Agriculture for the Poor
20. Business as usual:
Agriculture
(Colombia)
Business as
usual: Livestock
(Colombia)
Eco-Efficient Agriculture for the Poor
21. Cost (benefit) -1.000.000 -1.000.000
Carbon capture 1 1.000.000
Eco-Efficient Agriculture for the Poor
22. Figure 1 - Effect of the emission reduction amount on the cost-
effectiveness value.
Figure 1a - CEA value against different levels of emission reduction
and a constant cost.
Figure 1b - Representation of a cost-effectiveness curve
Eco-Efficient Agriculture for the Poor
23. Figure 2 - Effect of the emission reduction amount on the cost-
effectiveness value.
Figure 2a - CEA value against different levels of emission reduction
and a constant cost.
Figure 1b - Representation of a cost-effectiveness curve
Eco-Efficient Agriculture for the Poor