Impacts of Agricultural Adaptation to Climate Policies Uwe A. Schneider Research Unit Sustainability and Global Change, Hamburg University Contributors Kerstin Jantke, Ivie Ramos, Christine Schleupner, Timm Sauer, Chris Llull (Hamburg University), Bruce A. McCarl (Texas A&M University), Petr Havlik, Oskar Franklin, Steffen Fritz, Michael Obersteiner (International Institute for Applied Systems Analysis), Erwin Schmid (University of Natural Resources and Applied Life Sciences, Vienna), Juraj Balkovic, Rastislav Skalsky (Soil Science and Conservation Research institute, Bratislava), Martin Weih (Swedish University of Agricultural Sciences ), Andre Faaji, Edward Smeets (Utrecht University)

I. Questions & Challenges II. Research Tools III. Policy Analysis IV. Conclusions

Land Use Policies Society Climate (Environment)

Questions Mitigation Potential of Climate Policies? Mitigation Potential of Climate Policies? Land Management Adaptation? Land Management Adaptation? Commodity Market Impacts? Commodity Market Impacts? Environmental Side Effects? Environmental Side Effects? Social Side Effects? Social Side Effects?

Challenges Heterogeneity (Resources, Technologies) Heterogeneity (Resources, Technologies) Complexity (Mitigation Options, Markets, Externalities, Policies) Complexity (Mitigation Options, Markets, Externalities, Policies) Global Scope Global Scope

Land use competition

Forest and Agricultural Sector Optimization Model - FASOM Partial Equilibrium, Bottom-Up Model Partial Equilibrium, Bottom-Up Model Maximizes sum of consumer and producer surplus Maximizes sum of consumer and producer surplus Constrained by resource endowments, technologies, policies Constrained by resource endowments, technologies, policies Spatially explicit, discrete dynamic Spatially explicit, discrete dynamic Integrates environmental effects Integrates environmental effects Programmed in GAMS Programmed in GAMS

FASOM History US (1993) US (1993) EU (2004) EU (2004) Global (2006) Global (2006)

FASOM Structure Resources Land Use Technologies Processing Technologies ProductsMarkets Inputs Limits Supply Functions Limits Demand Functions, Trade Limits Environmental Impacts

FASOM - Spatial Resolution Soil texture Soil texture Stone content Stone content Altitude levels Altitude levels Slopes Slopes Soil state Soil state Political regions Political regions Ownership (forests) Ownership (forests) Farm types Farm types Farm size Farm size Many crop and tree species Many crop and tree species Tillage, planting irrigation, fertilization harvest regime Tillage, planting irrigation, fertilization harvest regime

Altitude: 1.< 300 m m m 4.>1100 m Texture: 1.Coarse 2.Medium 3.Medium-fine 4.Fine 5.Very fine Soil Depth: 1.shallow 2.medium 3.deep Stoniness: 1.Low content 2.Medium content 3.High content Slope Class: 1.0-3% 2.3-6% % % 5.… Homogeneous Response Units DE13 DE12 DE11 DE14

8 69VertebrateWetlandSpecies EUFASOM Biodiversity Scope

2016 cells25 countries6 biogeo-regions Biodiversity - Spatial Resolution

Climate Policy Analysis

I US Agricultural Sector Results Mainly based on McCarl and Schneider (2001). Greenhouse Gas Mitigation in U.S.Agriculture and Forestry. SCIENCE 294:

US Agricultural Mitigation Carbon price (Euro/tce) Greenhouse Gas Emission Mitigation (mmtce) Technical Potential Competitive Economic Potential

US Mitigation Strategy Mix Carbon price ($/tce) Emission reduction (mmtce) CH4 N2O Decrease Tillage Carbon Sink Afforestation Sink Bioenergy Emission Offsets

US Tillage Carbon Sink Carbon price ($/tce) Soil carbon sequestration (mmtce) Technical Potential Economic Potential Competitive Economic Potential

US Afforestation Sink Carbon price ($/tce) Emission reduction (mmtce) Technical Potential Economic Potential Competitive Economic Potential

US Bioenergy Emission Offsets Carbon price ($/tce) Emission reduction (mmtce) Technical Potential Economic Potential Competitive Economic Potential

US Crop Management Impacts Intensity (Base = 100%) Carbon equivalent price ($/mtce) Fertilization Tillage Irrigation

US Agricultural Markets Fisher index Carbon price ($/tce) Crop prices Livestock prices Livestock production Crop production Crop exports

Billion $ Carbon price ($/tce) US Welfare Changes Gross Producer Surplus Emission Payments Net Producer Surplus Consumer Surplus

US Environmental Co-Effects Pollution (%/acre) Carbon price ($/tce) N Percolation N Subsurface Flow Soil Erosion P Loss

Emission Leakage Fisher’s Ideal Index Carbon price ($/tce) USA Only Annex I Countries All Countries Non-Annex I crop net exports for agricultural GHG mitigation policy in:

II European Agricultural Sector Results Unpublished simulations with EUFASOM

2010 EU Bioenergy Targets 21% Renewable Electricity 21% Renewable Electricity ≈ 610 thousand GWh ≈ 300 million wet tons of biomass 5.75% Bio-Fuels 5.75% Bio-Fuels

Biomass Crop Share for 300 Mt Target

Climate Mitigation vs. Biodiversity Protection

2010 EU Biodiversity Targets 2001: European Council committed to ‘halt the decline of biodiversity by 2010’ in Europe 2001: European Council committed to ‘halt the decline of biodiversity by 2010’ in Europe 2002: EU joined about 130 countries in agreeing ‘to significantly reduce the rate of biodiversity loss by 2010‘ worldwide 2002: EU joined about 130 countries in agreeing ‘to significantly reduce the rate of biodiversity loss by 2010‘ worldwideBUT Biodiversity loss still accelerating Biodiversity loss still accelerating Reservation often ad hoc and uncoordinated Reservation often ad hoc and uncoordinated 2010 only three years away 2010 only three years away

Habitat Needs Simulations with the independent 69 species based habitat module of EUFASOM show that 10, 20, 30, 40 viable populations for each species require 22, 35, 42, and 61 million hectares, respectively, in specific locations

Wetland Area Share for a 40 Mha Target

Biomass Crop Share for 300 Mt Target

EU25 Bioenergy Potentials Marginal Biomass Costs in Euro/ton European Biomass Production in million wet tons 10 Mha 30 Mha Wetland Requirement = 40 Mha

percentage change years Cereal Straw Removal Soil Organic Carbon Yields Unpublished EPIC Simulations by E. Schmid

Conclusions Low mitigation targets, low marginal mitigation costs, more extensive agriculture, water and soil quality benefits Low mitigation targets, low marginal mitigation costs, more extensive agriculture, water and soil quality benefits High mitigation targets, high marginal cost, more intensive agriculture, more pressure on food and biodiversity High mitigation targets, high marginal cost, more intensive agriculture, more pressure on food and biodiversity Simultaneous biodiversity policies increase agricultural mitigation cost Simultaneous biodiversity policies increase agricultural mitigation cost Integrated analysis important (climate, soil, water, biodiversity, fuel, food) to prevent today’s solution becoming the problem of tomorrow Integrated analysis important (climate, soil, water, biodiversity, fuel, food) to prevent today’s solution becoming the problem of tomorrow

Integrated Analysis in CCTAME

Thank you.