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Overseas Development Institute (ODI)

Climate change, agricultural policy and poverty reduction – how much do we know?

Natural Resource Perspectives no. 109

Rachel Slater, Leo Peskett, Eva Ludi and David Brown1
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Overseas Development Institute (ODI)

September 2007

SARPN acknowledges ODI as a source of this document: www.odi.org.uk
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Projections suggest that, by the end of the 21st century, climate change could have had substantial impact on agricultural production and thence on the scope for reducing poverty. This paper seeks to trace the likely impacts through changes in the quality of the physical asset base, access to assets, and impacts on grain production and on agricultural growth more generally. At moderate degrees of warming, impacts are likely to be negative in some regions, but positive in others, making it important to understand the possible implications for trade between the regions. The short term impacts of climate change, particularly changes in the frequency and severity of adverse weather events, remain uncertain, but their impacts on many developing countries are likely to be negative. There is likely to be time to make appropriate policy responses to some of the longer-term impacts.

Policy conclusions

  • Considerable uncertainty surrounds long-term patterns of climate change and their likely2 impacts on agriculture. The prospects are that policy will have time to respond to some impacts, such as possible global decreases in crop production.
  • Shorter term shocks from increased climate variability might be experienced much sooner and are likely to be severe for tropical areas.
  • Both long- and short-term changes imply an increased need for more food trade between the OECD and rest of the world. Without this, food security in some regions may diminish.
  • Agricultural practices need to be incorporated into mitigation policies and programmes such as the Clean Development Mechanism (CDM). This will promote the measurement of carbon balances in agriculture and the search for synergies between mitigation and adaptation in the sector.
  • Increased scope for carbon trading may in some measure compensate for lost agricultural production potential in developing countries if these countries can access the carbon markets.
  • Conversely, if not carefully designed, mitigation policies such as biofuels and carbon markets are likely to further restrict access by the poor to productive resources, access which is already under threat from numerous development pressures on resources
  • Donors can help in mainstreaming policy responses to climate change into poverty reduction strategies and into other national development policies and programmes.
  • The “mainstreaming” of responses to climatic change into wider government policy will help in identifying which rights of the poor are under threat and in strengthening them.
  • Donor assistance may usefully support developing country interests in international climate negotiations, and help governments to support both regulated and voluntary carbon markets.
  • Specific international funds for agricultural adaptation need to be identified that are additional to existing development assistance, possibly targeted towards viable export options, and if necessary earmarked for access by developing countries.

Introduction

For present purposes, climate change is defined as a process of global warming, in part attributable to the ‘greenhouse gases’ generated by human activity. Accompanying changes are likely to be both global, as with rising sea levels attributable to ice-melt, and local, such as changes in rainfall patterns. Responses to climate change can either seek to reduce the level or rate of change (mitigation) or manage its consequences (adaptation). We are concerned here with both types of response.

Agriculture currently accounts for 24% of world output, and uses 40% of land area (FAO 2003). It is highly dependent on the climate and human dependence on agricultural livelihoods, particularly by the poor, is high, and so agriculture has been a focus of those modelling the impact of climate change on poverty.

This paper reviews current knowledge about the relationships between agriculture and climate change, focusing on:

  • cereal crops – rice, wheat and maize make up 85% of world cereal exports, and are thought to be particularly sensitive to climate change (FAO 2003)
  • four scenarios of future climate change derived from models of the Intergovernmental Panel on Climate Change (IPCC) and modelling studies used in the recent IPCC Working Group II Report (particularly Fischer et al 2002; Fischer et al 2005; Parry et al 2004; Parry et al 2005).
  • global climate changes, as these have more coverage in modelling studies, rather than regional or local changes.
Most models suggest that climate change will slow or reverse the poverty reducing impact of agriculture, with, by one estimate, some 600 million additional people at risk of hunger if temperature increases by over 3°C (Warren et al. 2006). But this has to be set against other changes in agriculture such as improvements in technology and changes in farming systems. Also, assumptions about population growth and food demand have a large influence on future projections (IPCC 2007).

Given the complex relationships between crops, atmospheric composition and temperature, combined with the complexities of world agricultural policies and trade, to make predictions about the future impacts of climate change on agriculture is fraught with difficulties. However, models based on the scenarios in Table 1 all suggest an increase in extreme events such as floods and droughts, even in the short term.


Footnotes:
  1. This paper draws on a suite of 5 papers (see Further Reading) prepared by ODI for DFID. The authors are indebted to the coauthors of these papers, namely Lidia Cabral, Nanki Mann Kaur, Tom Slaymaker and Chris Stevens, and to the editor of the Natural Resource Perspectives Series. The authors are indebted to DFID for funding the work on which this paper is based, but the views expressed are those of the authors alone.
  2. Note that the use of the term ‘likely’ is not linked to the formal IPCC definitions related to probabilities.


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