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Using Marginal Abatement Cost Curves to Realize the Economic Appraisal of Climate Smart Agriculture Policy Options. EASYPol Series 116
The AFOLU sector (Agriculture, Forestry, Land Use) is directly linked with climate change issues, on an environmental aspect as well as on an economical and social aspect (food security).
On the one hand, the sector directly contributes to climate change. Indeed, agriculture represents 14% of the total worldwide GHG emissions, and deforestation accounts for 17% (UNFCCC, 2008). The AFOLU sector is thus responsible for one third of the GHG emissions in the world. Moreover, this sector is increasingly vulnerable to climate changes and hence requires adaptation measures. On the other hand, it is estimated that the mitigation potential of the AFOLU sector could reach up to 4.5-6 Gt CO2e/year in 2030 (IPCC, 2007; Smith and al, 2007).
Yet, while there is a wide range of technical solutions, it is not immediately apparent which options deliver the most economically efficient reductions in GHG within agriculture. It is why methodologies such as a Marginal Abatement Cost Curves (MACC) have been developed these past twenty years. MACC also enables the comparison of the cost-effectiveness of mitigation options between different sectors (e.g. agriculture, power, transport, industry and domestic energy consumption). MACC has become a useful tool for policy makers to prioritize mitigation options.
The paper aims at putting forward a methodology to use MAC-curves within the AFOLU sector. It targets especially policy planners and policy makers. In this paper, the agricultural sector, also called agriculture or AFOLU, encompasses farm-based activities (crop production, livestock) as well as forestry and land use. It does not include the downstream agro-industry sector.
The first part of these guidelines explains the methodology in order to assess the cost-effectiveness and the mitigation potential of technical practices in agriculture. It also underlines the limits of the MACC approach. The second part treats a practical MACC analysis example, using the EX-ACT tool.
This paper is part of the FAO Policy series: EASYPol-Resources for policy making (in agriculture, rural development and food security). To find other EASYPol series' resources, go to the Policy Support and Governance website>Resources and type "EASYPol" in the free text search.