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Using Marginal Abatement Cost Curves to Realize the Economic Appraisal of Climate Smart Agriculture Policy Options

Analytical Tools. EASYPol Module116










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    Book (series)
    Making public investments Paris Agreement-aligned in a cost-effective way
    Calculating marginal abatement cost curves for agricultural investments
    2024
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    This paper proposes a novel methodology for calculating marginal abatement cost curves (MACCs) for public finance in agriculture using granular data on specific activities from investment projects. The proposed MACCs target public investment decision makers from the international and national financing institutions, as well as governments. The methodology is based on information obtained from agricultural projects implemented by international funding institutions (IFIs) and carbon accounting appraisals conducted using the Food and Agriculture Organization of the United Nations (FAO) EX-Ante Carbon-balance Tool (EX-ACT). The curves are estimated through a bottom-up approach, in which actual data on mitigation potential of agricultural investments and their associated costs are used to derive the cost-effectiveness of individual agricultural activities. The resulting curves illustrate the relationship between the cost of each individual activity and their individual mitigation potential helping decision makers to identify how to achieve best results at lowest cost. The application of the methodology is demonstrated using a sample portfolio of projects under World Bank’s Global Agriculture and Food Security Programme (GAFSP).Isolating the contribution of individual practices and highlighting their contextual cost-efficiency is a key factor in investment decision making for private and public entities aligning with the global climate targets. Given the complexity of estimating real costs, bottom-up MACCs offer a precious reference for evaluating activities' abatement potential and supporting decision-making processes of policymakers and investors interested in efficient and climate-friendly investments.
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    EX-Ante Carbon-balance Tool (EX-ACT) 2017
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    EX-Ante Carbon-balance Tool (EX-ACT) is a tool developed by the Food and Agriculture Organization of the United Nations (FAO). It is aimed at providing ex-ante estimates of the mitigation impact of agriculture, forestry and fishery development projects, estimating net Carbon (C) balance from greenhouse gas (GHG) emissions and C sequestration. EX-ACT is a land-based accounting system, measuring C stocks, stock changes per unit of land, and CH4 and N2O emissions expressed in t CO2-e per hectare an d year. The main output of the tool is an estimation of the C-balance that is associated with adoption of alternative land management options, as compared to a ‘business as usual’ scenario. EX-ACT has been developed using primarily the IPCC 2006 Guidelines for National Greenhouse Gas Inventories (IPCC 2006), complemented by other existing methodologies and reviews of default coefficients where available. Default values for mitigation options in the agriculture sector are mostly from the 4th Asse ssment Report of IPCC chapter 8, Smith et al.2007. Default values for wetlands (inland and coastal) are from the 2013 supplement to the IPCC 2006 (IPCC 2014). Thus, EX-ACT allows for the C–balance appraisal of new investment programmes by ensuring an appropriate method available for donors and planning officers, project designers and decision makers within agriculture, forestry and fisheries sectors in developing countries. The tool can also help to identify the mitigation impacts of various inv estment project options, and thus provide an additional criterion for consideration in project selection. These technical guidelines for using EX-ACT aim at providing the user with the details of procedures and numbers used to perform calculation of C balance.
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    FAO/IPCC Expert meeting on land use, climate change and food security 2017
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    One hundred scientists, economists and policy experts participated in a three-day expert meeting (EM) to engage in a high-level, globally oriented, and multidisciplinary scoping of topics that climate change to land use and food security. The EM was structured around five themes: climate impacts and human-directed drivers of land change and linkages to food security; mitigation and adaptation options; and policies for resource management, smallholder resilience, mitigation and food and nutrition security. The present report offers a comprehensive synthesis of the EM findings and conclusions reflecting the collective view participants and external reviewers. The report is a valuable source for the IPCC above-mentioned Special Report, especially in relation to food security, as well to researchers and policy makers concerned with the policy implication of food security in relation to post-Paris climate action and Agenda 2030.

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