Research European Commission FP6-ERA.ppt17/06/03 1 Presentation on agriculture requirements- Poland Requirements in the field of land use, agriculture and forestry in the context of the EU Strategy for sustainable development Pierre Valette, European Commission Daniel Deybe, National Detached Expert

Research European Commission FP6-ERA.ppt17/06/03 2 Presentation on agriculture requirements- Poland The notion of sustainable development To meet the needs of the present generation without compromising those of future generations

Research European Commission FP6-ERA.ppt17/06/03 3 Presentation on agriculture requirements- Poland Ecosystem functioning, Health, Global Change Damages Thresholds (physical & monetary valuation) Targets (e.g. % of reduction Human activity Prevention, Adaptation: Policies & measures: economic instruments, technologies: *Scenarios *Cost-effectiveness analysis *Cost-benefit analysis Innovation & implementation Monitoring (incl. Testing & Measuring) S.D. strategy

Research European Commission FP6-ERA.ppt17/06/03 4 Presentation on agriculture requirements- Poland Sustainability Physical Economic Social

Research European Commission FP6-ERA.ppt17/06/03 5 Presentation on agriculture requirements- Poland To evaluate sustainability, it is necessary to evaluate the impacts on the three main components: –environment –social –economic

Research European Commission FP6-ERA.ppt17/06/03 6 Presentation on agriculture requirements- Poland There are no thresholds for any of them. But if it is possible to evaluate the impact on each of them, policy makers could consider the differentiated impact and decide according to their own goals, knowing the positive and negative effects. This justifies the Sustainable Impact Assessment of any major EU policy.

Research European Commission FP6-ERA.ppt17/06/03 7 Presentation on agriculture requirements- Poland What is expected from agriculture ? An agriculture that is competitive Production methods that are environmentally friendly and able to supply quality products Agricultural diversity, product variety and the provision of public goods linked to rural development and notable, the preservation and enhancement of the rural landscape. Simplicity in agricultural policy and shared responsibility for its implementation (subsidiarity) Justification of support through the provision of public services by farmers

Research European Commission FP6-ERA.ppt17/06/03 8 Presentation on agriculture requirements- Poland Agenda 2000 introduced payments to farmers to use their privately owned resources or production factors for activities that go beyond good farming practices. The Göteborg Council endorsed the Commission’s pledge to carry out a “Sustainable Impact Assessment” for “major” policy initiatives and legal proposals.

Research European Commission FP6-ERA.ppt17/06/03 9 Presentation on agriculture requirements- Poland Shifting resources from market support to rural development, improving agri-environment measures (transparency), assessing the coherence of zoning and increasing funds for rural development. Specific requirements concerning the CAP:

Research European Commission FP6-ERA.ppt17/06/03 10 Presentation on agriculture requirements- Poland Conflicts and synergies with Ecology In some cases, environmentalist would prefer that strong support (and even priority) should be given to policies that minimize the negative impacts on the environment. This would imply that the other axis (economy and social impacts) are neglected. In some cases, this might be irrealistic.

Research European Commission FP6-ERA.ppt17/06/03 11 Presentation on agriculture requirements- Poland But in some cases, several functions might contribute to environmental, economic and social goals

Research European Commission FP6-ERA.ppt17/06/03 12 Presentation on agriculture requirements- Poland Alternative “environmentally concerned” practices One way to deal with this problem is to identify and use environmentally concerned or environmentally neutral practices. In this case, the environmental impact could be low or nihil. But, are they economic or socially acceptable? Is there any way to introduce them?

Research European Commission FP6-ERA.ppt17/06/03 13 Presentation on agriculture requirements- Poland Role of landscape Landscape is a consequence of the natural endowment as well as of the human intervention. Several changes can take place: infrastructure, industrial settings, agriculture, urban settlements, etc. Agriculture is one of the key issues, because it occupies an important portion of the space, but it is not the only one.

Research European Commission FP6-ERA.ppt17/06/03 14 Presentation on agriculture requirements- Poland Policies can influence the type of agriculture and therefore the landscape. But landscape is also an “amenity”. It can contribute to human welfare and thus provide a positive externality (an extra function). Can a “value” be provided to this amenity?

Research European Commission FP6-ERA.ppt17/06/03 15 Presentation on agriculture requirements- Poland Land use Besides, as mentioned before, agriculture competes for land use. On one hand there is the incorporation of natural land into agriculture (and agro-forestry and forestry) and vice-versa. On the other hand, the trade- off with other land uses might not allow to obtain a sustainable balance. Agriculture can contribute to the functions of Land use, but Land use functions will drive agriculture.

Research European Commission FP6-ERA.ppt17/06/03 16 Presentation on agriculture requirements- Poland How to evaluate alternative land- uses, how to promote them (eventually)?

Research European Commission FP6-ERA.ppt17/06/03 17 Presentation on agriculture requirements- Poland Employment In some cases and regions, agriculture is the main source of labor occupation, both family and employment. It also contributes to stabilize population on the country side. It helps avoiding overpopulation in some urban sites.

Research European Commission FP6-ERA.ppt17/06/03 18 Presentation on agriculture requirements- Poland How can the benefits of the stabilization of the rural population be counted when undertaking SIA ? Are the available/proposed services sufficient enough to entertain the rural population and the level of employment? This can also be linked with land use issues.

Research European Commission FP6-ERA.ppt17/06/03 19 Presentation on agriculture requirements- Poland Income generation Agriculture can contribute to great extent in some cases to (direct and indirect) local and regional income generation and therefore have an impact on the level of development. Is this latter impact measurable in SIA? What is its role at the micro and macro-economic level?

Research European Commission FP6-ERA.ppt17/06/03 20 Presentation on agriculture requirements- Poland Carbon cycle Agriculture and forestry can contribute to capture greenhouse gases through the use of its sinking capacity (there are mainly two sources of sinks: soil carbon and forestry) or to mitigate GHG through technological change or by replacing fossil fuels by bio-fuels

Research European Commission FP6-ERA.ppt17/06/03 21 Presentation on agriculture requirements- Poland In the case of the sinks, an economic compensation can be estimated according to the amount of C captured and the final use of the consequent C stock. Emission trading could also be applied to GHG emitting activities, but it will be extremely difficult to implement.

Research European Commission FP6-ERA.ppt17/06/03 22 Presentation on agriculture requirements- Poland Bio-fuels should be considered in the economic valuation both as a source of energy and as a replacement for uses of non-renewable C sources

Research European Commission FP6-ERA.ppt17/06/03 23 Presentation on agriculture requirements- Poland Other outcomes of agriculture Any other outcome of the agricultural sector, like providing for food security, social cohesion, should be taking into account in the SIA.

Research European Commission FP6-ERA.ppt17/06/03 24 Presentation on agriculture requirements- Poland Multifunctional aspects All these aspects can be summarized in what could be named as the multifunctional aspects of the sector.

Research European Commission FP6-ERA.ppt17/06/03 25 Presentation on agriculture requirements- Poland Contribution of the forestry sector Forestry can contribute in at least two ways: as a source of diversification/income generation/employment/land use as a C sink

Research European Commission FP6-ERA.ppt17/06/03 26 Presentation on agriculture requirements- Poland Multifunctional forest But is also provides other functions: –hunting, fire wood, tourism, landscape, etc. How can these other functions be considered?

Research European Commission FP6-ERA.ppt17/06/03 27 Presentation on agriculture requirements- Poland Economic and social sustainable wood chains Actors: industries, public authorities, civil society, international (trade, conventions, partnership) Regulation (local, regional, EU, World) Forest, Forestry Solid wood chain Fiber chain Bio energy chain Bio composites chain Society markets Multifunctionalities: rural development, environment, sinks, landscape, bio-diversity Forestry Wood Chain

Research European Commission FP6-ERA.ppt17/06/03 28 Presentation on agriculture requirements- Poland From micro to macro- economic impacts It is very important to evaluate the micro-economic impacts, in particular the structural effects of the different policies at the farm level. It can provide useful insights for policy makers and help in the decision making.

Research European Commission FP6-ERA.ppt17/06/03 29 Presentation on agriculture requirements- Poland However, the evaluation of the macro- economic impacts is also required. In the process of policy making, several options can be contemplated and comparing the macro-economic impacts could provide arguments for the selection or rejection of a given one. Also, the spill-over effects to other sectors should be considered

Research European Commission FP6-ERA.ppt17/06/03 30 Presentation on agriculture requirements- Poland Relationship with externalities The externalities are the indirect or unexpected effects of policies. They can be negative or positive.

Research European Commission FP6-ERA.ppt17/06/03 31 Presentation on agriculture requirements- Poland Impact pathway analysis Source Dissemination Doses-Responses Monetary evaluation € Dose Response

Research European Commission FP6-ERA.ppt17/06/03 32 Presentation on agriculture requirements- Poland In particular, externalities happen on the environment and on health. But an integrated approach can be able to point them out in other sectors, quantify them (when possible) and eventually avoid them.

Research European Commission FP6-ERA.ppt17/06/03 33 Presentation on agriculture requirements- Poland RES vs coal electricity production cost including external costs (€cents/kWh) Coal Coal w/ext Wind Wind w/ext time Cost

Research European Commission FP6-ERA.ppt17/06/03 34 Presentation on agriculture requirements- Poland Can sustainability goals be established? This is part of the political process. Stakeholders participation, discussion and compromise are useful processes to identify sustainability goals from a societal perspective. In some case, some room for manoeuvre might have to be left open when the future impacts have not yet been identified (precautionary principle)

Research European Commission FP6-ERA.ppt17/06/03 35 Presentation on agriculture requirements- Poland Indicators and thresholds A possible way to proceed is to identify main “sustainability” indicators that can help in the process of monitoring whether the goals are being achieved (or not). For these indicators, thresholds can be identified and fixed (from the environmental, economic and social perspective) which point out the limits that can/should not be exceeded.

Research European Commission FP6-ERA.ppt17/06/03 36 Presentation on agriculture requirements- Poland Is it possible to account realistically for policy impacts? An integrated framework that takes into account, modularly, the different sectors, combining bottom-up and top-down approaches, should be able to provide insights on possible impacts of policies. The combination of approaches (micro and macro) should be able to take into consideration the many levels (local, regional, global) concerned by the policies.

Research European Commission FP6-ERA.ppt17/06/03 37 Presentation on agriculture requirements- Poland From cost-efficiency to cost- benefit to integrated analysis There is a need to evaluate the (direct) efficiency according to the fixed targets and the associated private costs of any policy in the decision making. In this case, the possibility of succeeding efficiently in attaining the goals is evaluated and quantified.

Research European Commission FP6-ERA.ppt17/06/03 38 Presentation on agriculture requirements- Poland More difficult is to estimate the cost-benefit of any policy. In this case, all benefits (direct and indirect) of a policy have to be considered in the economic analysis. The outcome in this case is an internal rate of return of the policy. Usually, it is not always possible to evaluate the economic values of the indirect benefits (and cost), so usually they are only mentioned for information purposes.

Research European Commission FP6-ERA.ppt17/06/03 39 Presentation on agriculture requirements- Poland An integrated framework, in which the relationships between the different sectors and stakeholders are been explicitly considered and stated might help overcoming part of the inconveniences and provide useful insights (even if not completely accurate) of the impacts of policies and contribute to the SIA.

Research European Commission FP6-ERA.ppt17/06/03 40 Presentation on agriculture requirements- Poland Some examples of how policies might not achieve their goals and how integrated approaches can detect the unexpected outcomes and help avoiding them

Research European Commission FP6-ERA.ppt17/06/03 41 Presentation on agriculture requirements- Poland Case study 1 In Africa, it is said that animals overgrazing enhance the erosion processes. It is tested for a village what could happen if the number of animals pasturing could be limited.

Research European Commission FP6-ERA.ppt17/06/03 42 Presentation on agriculture requirements- Poland 1000 FCFA Tn érodées Strong impact on the village revenue Strong impact on erosion with a limited constrain, further constrain will not have any more impact

Research European Commission FP6-ERA.ppt17/06/03 43 Presentation on agriculture requirements- Poland Impact on the revenue Better endowed Less endowed Less endowed farmers might face a strong impact on their revenue

Research European Commission FP6-ERA.ppt17/06/03 44 Presentation on agriculture requirements- Poland Example 2 In a certain region of south America, rotation are excluding fallow periods. What will happen if a subsidy is granted for fallowing?

Research European Commission FP6-ERA.ppt17/06/03 45 Presentation on agriculture requirements- Poland Impact of a compensation paid to extensify production The subsidy is used to increase livestock size 100 ha Tn érodées

Research European Commission FP6-ERA.ppt17/06/03 46 Presentation on agriculture requirements- Poland  “Sustainability issues”  protection and renewal of stocks of resources  efficiency with which resources are used  equity between generations  “Measuring impacts”  quantitative, qualitative and in money terms when reliable estimates are possible  costs and benefits expressed in real terms taking into account “discounting” Sustainability Impact Assessment: (Methodology 1)

Research European Commission FP6-ERA.ppt17/06/03 47 Presentation on agriculture requirements- Poland SIA: Methodology (2) Economic impacts : macro- and micro-economic impacts, notably in terms of economic growth and competitiveness, innovation and technological development, investment, market shares and trade patterns, increases or decreases in consumer prices. Social impacts : human capital, employment levels, ethic, gender equality, social exclusion and poverty, acceptability, health, safety, consumer rights, social capital, security. Environmental impacts : changing status of climate change, air, water, soil pollution, land-use, bio- diversity, changes in public health.

Research European Commission FP6-ERA.ppt17/06/03 48 Presentation on agriculture requirements- Poland SIA: Methodology (3)  Tools for cost-effectiveness and cost-benefit analysis multicriteria analysis, scenario building, indicators building.  Treatment of risk and uncertainty in order to apply “precautionary principle”   macro-econometric and general equilibrium models  sectoral models : energy, transport, agriculture and forests  “Impact Pathway” analysis for damage valuation  multi-agent models  participatory approaches, learning methods

Research European Commission FP6-ERA.ppt17/06/03 49 Presentation on agriculture requirements- Poland Methodological challenges for SIA  Some tools (models, accounting frameworks for externalities, techno-economic databases) exist, but they are not dedicated to the SIA needs (and not sufficiently developed).  Environment: -damages of a technology or human activity on environment and health  physical damages (Environment programme)  monetary valuation (EXTERNE or GREENSENSE) -“thresholds of sustainability” issue: a mix of natural science, economic and social aspects mainly “sites” level; transferability issue for “macro” assessment -treatment of uncertainty for global issues (climate change)

Research European Commission FP6-ERA.ppt17/06/03 50 Presentation on agriculture requirements- Poland  Economy -“private costs” of measures (incl. technologies) -“social cost” (social cost = private + external costs) of measures -cost-effectiveness analysis means optimisation against an objective  modelling framework; - cost-benefit analysis  includes external cost -micro-economic and macro-economic impacts  different types of models -regional, national, global modelling with linkages for competitiveness and trade analysis -ex-ante impacts analysis of mix of economic instruments (e.g. emission trading + emissions ceilings)

Research European Commission FP6-ERA.ppt17/06/03 51 Presentation on agriculture requirements- Poland  Society -distinction between social, legal and institutional aspects is necessary -social aspects are not explicitly taken into account in the traditional economic tools -understanding and expectations of behaviours -multi-agents models could help to represent the functioning of a social system -participatory approach and governance issue must be addressed -issue of transferability of results  Trade-offs -difficult and political process at the final stage -monetary valuation should help, but not application to societal issue

Research European Commission FP6-ERA.ppt17/06/03 52 Presentation on agriculture requirements- Poland Integration of sustainability in the land use modeling In the land use models it is possible to consider: –available resources –different actors –different regions it is also possible to account for –environmental indicators

Research European Commission FP6-ERA.ppt17/06/03 53 Presentation on agriculture requirements- Poland The last option can be used to measure and compare the impacts on environmental sustainability. Considering different stakeholders might help identifying structural and social impacts As these models also considers profitability, they can help measuring the economic impacts

Research European Commission FP6-ERA.ppt17/06/03 54 Presentation on agriculture requirements- Poland Some of the accounting indicators can be transformed in constrains to represent thresholds or targets This allows to identify the “economic cost” or the “welfare impact”, according to the objective function defined and using the “dual values”, for evaluation and comparison purposes.

Research European Commission FP6-ERA.ppt17/06/03 55 Presentation on agriculture requirements- Poland Type of uses of the integrated framework Main types of analysis –simulation  econometric  approximations until the equilibrium  optimization  general equilibrium –foresight  Scenario based  Baseline

Research European Commission FP6-ERA.ppt17/06/03 56 Presentation on agriculture requirements- Poland Econometric Extrapolation of past trends through the use of response elasticities –Very useful for short term analysis –ex. Capri model

Research European Commission FP6-ERA.ppt17/06/03 57 Presentation on agriculture requirements- Poland Aproximation Trial and error mechanisms for each sector sequentially, until the equilibrium is reached, which is not the global equilibrium –very pragmatic, gathering detail information on the different components –ex. Poles-gecs, Agripol

Research European Commission FP6-ERA.ppt17/06/03 58 Presentation on agriculture requirements- Poland Optimisation Behaviour is the basis for model solving –The solution is optimal, but might not be realistic –ex: Mata

Research European Commission FP6-ERA.ppt17/06/03 59 Presentation on agriculture requirements- Poland General equilibrium All the sectors and all the reactions are considered simultaneously –very aggregated and static –ex. GTAP, GEM-E3, Nemesis

Research European Commission FP6-ERA.ppt17/06/03 60 Presentation on agriculture requirements- Poland Scenario based Different large consistent sets of assumptions affecting science, technical schedules, environement, economy and social factors are compared in quantitative and qualitative terms. –difficult to estimate the differential impacts of some of the measures

Research European Commission FP6-ERA.ppt17/06/03 61 Presentation on agriculture requirements- Poland Baseline based The comparison is undertaken on the basis of a probable evolution and the changes in some parameters –the specific impacts can be identified