Agrifood economics and policy

Evidence-based methodologies for environmental externalities accounting and value chain sustainability

FAO’s work on environmental externalities accounting and value chain sustainability aims to develop innovative tools and methodologies that support evidence-based, multi-criteria decision-making in agrifood systems. It promotes the integration of environmental externalities and socioeconomic dimensions into investments, policies and projects across agrifood systems value chains. 

This work is led by the Environmental eXternalities ACcounting Tool (EX-ACT) team within FAO’s Agrifood Economics and Policy Division, which supports FAO Member Countries and external stakeholders by developing and applying several key instruments, including EX-ACT, the value chain sustainability tool and methodologies related to food loss and waste, as well as the bioeconomy.

The Environmental eXternalities ACcounting Tool (EX-ACT)
EX-ACT online app

The Environmental eXternalities ACcounting Tool (EX-ACT) makes evaluation of environmental externalities digital and more accessible. It allows users to work online, manage data efficiently, and collaborate across teams and institutions, simplified and flexible reporting and monitoring.

EX-ACT

The FAO Environmental eXternalities ACcounting Tool (EX-ACT) team is responsible for the development and deployment of methodologies targeting the economic and non-economic quantification of value chain sustainability and environmental externalities. In particular:

  • Evidence-based methodology development: Evidence-based tools and methodologies are designed to meet stakeholder needs and to embed sustainability considerations into conventional decision-making frameworks, promoting a more holistic and integrated approach to agrifood system planning and evaluation.
  • Capacity building: Tailored training sessions and workshops are provided for partners, decision-makers and technical experts. These activities include hands-on exercises, field visits and real case studies that build practical skills in scenario analysis, data management and sustainability reporting. Participants are equipped to independently apply EX-ACT tools in investment planning, policy design and project monitoring.
  • Project analysis: The EX-ACT assesses the impact of agrifood systems interventions on environmental externalities and value chain sustainability. Analyses may cover individual projects, national programmes, policies or investment portfolios. Appraisals can be conducted ex ante (design), during implementation (monitoring), or ex post (evaluation).
  • Quality control: Technical support and quality control are provided to ensure the correct and consistent application of EX-ACT tools, including methodology review, validation of results and harmonization across different contexts.

The EX-ACT team contributes to FAO’s decision-making processes in collaboration with other divisions, including the Land and Water Division (NSL), the Animal production and Health Division (NSA), the Office of Climate and Biodiversity (OCB) and the Forestry Division (NFO). Through these partnerships, the development and application of EX-ACT tools and methodologies are strengthened across FAO and among external stakeholders. 

This work directly contributes to the implementation of FAO’s Strategic Framework, particularly on the Programme Priority Areas (PPAs): BE1 – Climate change mitigating and adapted agrifood systems; BE3 – Biodiversity and ecosystem services for food and agriculture; BP1 – Innovation for sustainable agriculture production; and BL6 – Scaling up Investment.

The EX-ACT team also collaborates with major international financial institutions (IFIs) and development partners, such as the World Bank, the International Fund for Agricultural Development (IFAD), the Global Environment Facility (GEF) and the Green Climate Fund (GCF). The EX-ACT methodology is furthermore endorsed or recommended in several key guidance documents, including:

 

RELEVANT PUBLICATIONS
Handbook
Environmental eXternalities ACcounting Tool (EX-ACT) handbook – Guiding sustainable investments
2026

This handbook provides technical guidance on using the greenhouse gas (GHG) accounting component of the Environmental eXternalities ACcounting Tool...

Technical report
Integrating permanence into greenhouse gas accounting for agrifood systems – Application of the Environmental eXternalities ACcounting Tool (EX-ACT)
2026

Assessing permanence is a critical consideration in project-level greenhouse gas (GHG) accounting to ensure that reported mitigation outcomes are durable...

Handbook
Environmental eXternalities ACcounting Tool (EX-ACT) – User guide
2026

This user guide provides practical guidance for operating the Environmental eXternalities ACcounting Tool (EX-ACT) online app for assessing environmental...

Technical report
Additionality and ex ante greenhouse gas project level accounting – Application of the Environmental eXternalities ACcounting Tool (EX-ACT)
2026

This report reviews the concept of additionality and how it is treated in major climate finance frameworks, to identify relevant practices for project-level...

cd7207en
Training material
Environmental eXternalities ACcounting Tool (EX-ACT) – Checklist for EX-ACT implementation
2025

The Environmental eXternalities ACcounting Tool (EX-ACT) checklist guides the collection of essential data for the greenhouse gas (GHG) assessments...

cd6232en
Technical report
Expanding greenhouse gas accounting in the fisheries sector using the Environmental eXternalities ACcounting Tool (EX-ACT) – Review of the "Coastal and Marine Fisheries Management" module of EX‐ACT
2025

This methodological note presents the updated approach for estimating greenhouse gas (GHG) emissions from fisheries using the Environmental eXternalities...

cd4515en
Technical report
Greenhouse gas accounting in the forestry sector – Refining the approach for forest management activities in EX-ACT
2025

This report aims to illustrate the methodological improvements for estimating greenhouse gas (GHG) emissions and removals from forest management practices...

Working paper
Making public investments Paris Agreement-aligned in a cost-effective way – Calculating marginal abatement cost curves for agricultural investments
2024

This paper proposes a novel methodology for calculating marginal abatement cost curves (MACCs) for public finance in agriculture using granular data...

Handbook
EX-Ante Carbon-balance Tool for Value Chains (EX-ACT VC) Guidelines. Third edition
2023

The Ex-Ante Carbon-balance Tool for value chains (EX-ACT VC) is a quantitative multi-appraisal tool that evaluates the sustainability of agrifood value...

Handbook
EX-Ante Carbon-balance Tool for Value Chains (EX-ACT VC) Guidelines. Second edition
2022

The Ex-Ante Carbon-balance Tool for Value Chains (EX-ACT VC) is a quantitative multi-appraisal tool that evaluates the sustainability of agrifood value...

Handbook
Biodiversity Integrated Assessment and Computation Tool (B-INTACT) – Guidelines
2021

Biodiversity loss is accelerating at an unprecedented rate across the planet putting a great number of species on the brink of extinction. A decline...

Communication material
Ex-Ante Carbon-balance Tool for biodiversity – Mainstreaming biodiversity impacts into agricultural investments and policies
2019

In recent decades, concerns have grown around the environmental impact of the Agriculture, Forestry and Other Land Use (AFOLU) sector, more specifically...

Communication material
EX-Ante Carbon-balance Tool (EX-ACT) – Mainstreaming greenhouse gas accounting into agriculture investments and policies
2019

A brief that presents the FAO EX-Ante Carbon-balance Tool.

Communication material
EX-Ante Carbon-balance Tool for value chains – Assessing environmental and socio-economic potential of agri-food value chains
2019

A brief that presents the FAO EX-Ante Carbon-balance Tool for value chains.

Communication material
EX-Ante Carbon-balance Tool for blue carbon and fisheries – Assessing the climate mitigation potential of coastal wetlands, aquaculture and fisheries management
2019

A brief that presents the EX-Ante Carbon-balance Tool for blue carbon and fisheries.

Technical brief
Greenhouse gas appraisal for the joint World Bank-GEF-SIDA Environmental Services Project in Albania – EX-ACT case study
2019

This report is prepared to provide an ex-ante appraisal of the carbon-balance of the “Environmental Services Project” (ESP) of the World Bank, the Global...

Technical brief
Rice value chain analysis in Tamil Nadu, India – EX-ACT value chain case study
2019

This report is a case study of a multi-impact appraisal of a paddy value chain in India. The value chain is analysed from production to the distribution...

Technical brief
Cocoa value chain analysis in Haiti – EX-ACT value chain case study
2019

This report is a case study of a multi-impact appraisal of a cacao value chain in Haiti. The value chain is analysed from production to the distribution...

Technical brief
Greenhouse gas appraisal on the adaptation to salinity intrusion project
2017

This working document presents the results of an EX-ACT Greenhouse Gas appraisal of the "Mekong Delta Integrated Climate Resilience and Sustainable...

Handbook
EX-Ante Carbon-balance Tool for coastal wetlands, fisheries and aquaculture management – Guidelines. First edition
2017

This manual explains how to use the EX-Ante Carbon-balance Tool known as “EX-ACT” to estimate the impacts of management activities in coastal wetlands,...

Technical brief
Greenhouse gas appraisal on sustainable management of critical wetland ecosystems
2017

This report presents the results of an Ex-Ante Carbon-balance Tool (EX-ACT) Greenhouse Gas appraisal of the project “Sustainable management of critical...

Handbook
EX-Ante Carbon-balance Tool – Quick guidance. First edition
2017

In order to facilitate the different activities of targeting climate change mitigation in agriculture, decision makers can today choose from a wider...

Handbook
EX-Ante Carbon-balance Tool for Value Chains (EX-ACT VC) – Guidelines. First edition
2017

This practical guidance presents details on how to use the EX-Ante Carbon-balance Tool for Value Chain (EX-ACT VC), with the aim of providing a multi-impact...

NEWS
30/01/2026

Since its launch in October 2024, the Environmental eXternalities ACcounting Tool (EX-ACT) web application has seen a remarkable spike in uptake. Designed to&nbs...

EX-ACT Dec24 Cameroon
16/12/2024

FAO’s Agrifood Economics and Policy team has just returned from Cameroon, where it delivered capacity-building training on climate action and greenhouse gas (GHG) accounting using the Environmental eXternalities ACcounting Tool (EX-ACT) for the 

18/10/2024
EX-ACT, managed by the Agrifood Economics and Policy Division at FAO, has a host of new features such as yearly carbon balances, geospatial maps and has better user experience. 
Area of work
value-chains
Investments for sustainable markets, agribusiness and rural transformation

Connecting farmers, markets, consumers and investors with sustainable value chains