The economics advantage: assessing the value of climate change actions in agriculture
Agriculture is a sector especially sensitive to climate change. It also accounts for significant emissions and is, therefore, a priority for both adaptation and mitigation plans and actions at global, national and local levels. This report is aimed at readers who seek to build economic evidence in support of the inclusion of actions on agriculture in climate change plans and programmes, particularly at the national level under the umbrella of nationally determined contributions (NDCs) to the December 2015 Paris Agreement, which aims to restrict a rise in global temperatures and manage risks.
- evidence of actions in agriculture that have a high likelihood of delivering meaningful economic and financial returns under climate change has been shown for global, national, project and farm levels
- the ingredients of a strong economic assessment for NDCs and other climate change plans for agriculture include policy mainstreaming, iterative planning, a balance of project-level and farm-level assessment of costs and benefits, and appraisal of economic incentives and the enabling environment for farmers and other private-sector actors. NDCs are generally well aligned with national development plans so that proposed actions for both adaptation and mitigation contribute to improved development outcomes, but they do not yet collectively meet global ambitions of the Paris Agreement
- the more ambitious NDCs provide the political capital to promote transformative actions that bring together multiple longer-term agendas for social, economic and environmental benefit
This report has presented evidence of actions in agriculture that have a high likelihood of delivering meaningful returns under climate change, from an economic and financial perspective.
At the global level, the economic case can be made through several examples of positive returns for future food security and rural livelihoods under climate change.
At the farm level, positive economic returns can be demonstrated for multiple practices that build adaptive capacity and reduce emissions intensity across several of the priority subsectors highlighted in the NDCs soil and land, water crops, livestock, fisheries and trees. Evidence is emerging that combining these actions into portfolios linked to institutional support, such as extension, research and value-chain development, will deliver the best economic returns over time. Understanding and influencing the behaviours of farmers and other private-sector actors will be critical to success.
Building on the economic evidence available has the potential to generate new credible proposals that could then drive large-scale public and private investment in agriculture under climate change. The credibility of these proposals will depend on better-quality economic assessments.