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Integrating Agri-Environmental Indicators and the OECD Policy Inventory. By Ralph E. Heimlich OECD Workshop March 19-21, 2007 Washington, DC. A Vision of Agri-Environmental Policy Development. Two contexts for analysis: Inter- and Intra-National

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Integrating agri environmental indicators and the oecd policy inventory

Integrating Agri-Environmental Indicators and the OECD Policy Inventory

By Ralph E. Heimlich

OECD Workshop

March 19-21, 2007

Washington, DC


A vision of agri environmental policy development
A Vision of Agri-Environmental Policy Development Policy Inventory

Two contexts for analysis: Inter- and Intra-National

Inter-National-analyze relationships between more aggregate agri-environmental indicators (AEIs) and policies across countries

  • Observations from many countries

  • Abstracts from or controls for differences in policy implementation and physical, climatic, cultural, economic, and political context across countries

  • Objective: Which policies work best to improve the AEIs?

  • Implicit: what works well in one or a set of countries will work well in others.


A vision ii
A Vision II Policy Inventory

Intra-National-analyze relationships between hierarchically disaggregated AEIs and policies within each member country

  • Disaggregates indicators and policies within a member country

  • Abstracts policies and programs or controls for context

  • Objective: Which policies work well in one area that could be applied to others? or What changes could improve efficiency and effectiveness?

  • Geographic disaggregation for understanding fine distinctions between

    • policies,

    • their parameters,

    • limitations of the resources and agricultural production practices to which they apply.


Hierarchical disaggregation

Sectoral disaggregation Policy Inventory

Geographic disaggregation

Industry-steel, agriculture, etc.

Sector-crops, livestock

Enterprise-corn for grain, hogs, etc.

Technology-irrigated, no-till, BT corn

Field-Tama silt loam, 2-5% slope,irrigate, no-till, Bt corn

Hierarchical Disaggregation


Previous oecd activities modeling aei policies
Previous OECD Activities Modeling AEI/Policies Policy Inventory

  • Causal graph analysis on data for nutrient balances provided “proof of concept”, but there remain severe data limitations, and problems with the model specification

  • Applied the OECD Policy Evaluation Model (PEM), specifically for Canada, to a set of alternative policy instruments on nitrogen balance

  • Three analyses (Swiss dairy production, Finnish arable crop and forestry production, and U.S. land retirement and tillage practices) using the Stylized Agri-Environmental Policy Impact Model (SAPIM)

  • A great many other analyses using country-specific modeling frameworks presented within the JWP framework.

  • These uses of ag sector programming models could be modified in a uniform way and used to produce coordinated analyses of uniform policies or examine the responsiveness of AEIs (constructed to be analogous with the OECD set) to policy change


The indicators
The Indicators Policy Inventory

Won’t quarrel with details of current set, but focus on adapting them for use in policy analysis.

Criticisms of AEIs Usefulness for Inter-national Analysis

  • Designed for international-specified at a high level of generality and aggregation, and a low level of detail and specificity.

  • Universality-does everyone have these problems?

  • Inherent and managerial effects-focus on what policy can affect

  • Scale-neutrality-all indicators should be normalized

  • Data issues

    • Do the data that support qualitative classes used in constructing the indicators measure the same things?

    • Monitoring design and coverage is likely inherently unequal. This probably leads to estimates with differing reliability across countries.


The indicators ii
The Indicators II Policy Inventory

Criticisms of AEIs Usefulness for Intra-national Analysis

  • Hierarchical disaggregation-Can indicators (or analogs) be disaggregated to every geographical/ sectoral level?

  • Size and scale- Does the meaning of the indicator remain the same when disaggregated?

  • Methods of quantification- Indicators may need to be calculated differently as the size of the unit of observation decreases


The policy inventory
The Policy Inventory Policy Inventory

Environmental Objectives

  • Agri-environmental policies affect more than one (all) environmental outcomes.

  • Environmental objectives are not mutually exclusive categories.

  • Make objectives consistent with/parallel to the AEIs.

  • Objectives should not mix up outcomes and methods, resources of concern and techniques.

  • “Generic/Broad Spectrum” is not useful- admission that there is no clear objective of the policy.

  • A Side Benefit: Direction and magnitude of entire vector of impacts on environmental outcomes is a step toward a cost/benefit framework.


Nrcs conservation practice physical effect worksheet

RESOURCE: SOIL Policy Inventory

RESOURCE CONCERN: SOIL EROSION

SHEET AND RILL WIND

EPHEMERAL GULLY CLASSIC GULLY

STREAMBANK IRRIGATION INDUCED

SOIL MASS MOVEMENT ROADBANK/CONSTRUCTION     

RESOURCE CONCERN: SOIL CONDITION

SOIL TILTH SOIL COMPACTION

SOIL CONTAMINATION   SALTS ORGANICS

FERTILIZERS PESTICIDES DEPOSITION/DAMAGE DEPOSITION/SAFETY    

RESOURCE: WATER

RESOURCE CONCERN: WATER QUANTITY

SEEPS RUNOFF/FLOODING

EXCESS WATER INADEQUATE OUTLETS

WATER MGT. IRRIGATION      

SURFACE SPRINKLER

WATER MGT. NON-IRRIGATED

RESTRICTED FLOW CAPACITY (H20 Convey.)     

RESTRICTED STORAGE

RESOURCE: WATER

RESOURCE CONCERN: WATER QUALITY

GROUNDWATER CONTAMINANTS

PESTICIDES NUTRIENTS ORGANICS SALINITY HEAVY METALS PATHOGENS

SURFACE WATER CONTAMINANTS

PESTICIDES NUTRIENTS ORGANICS SEDIMENTS DISSOLVED OXYGEN SALINITY HEAVY METALS TEMPERATURE PATHOGENS

RESOURCE: AIR

RESOURCE CONCERN: AIR QUALITY

AIRBORNE SEDIMENT AND SMOKE PARTICLES      

AIRBORNE SEDIMENT CAUSING CONVEYANCE PROBLEMS

AIRBORNE CHEMICAL DRIFT

AIRBORNE ODORS

FUNGI, MOLDS, AND POLLEN      

RESOURCE CONCERN: AIR CONDITION

AIR TEMPERATURE

AIR MOVEMENT (Windbreak Effect)

HUMIDITY

RESOURCE: PLANT

RESOURCE CONCERN: SUITABILITY

SITE ADAPTATION PLANT USE      

RESOURCE CONCERN: CONDITION

PRODUCTIVITY HEALTH, VIGOR, SURVIVAL

RESOURCE CONCERN: MANAGEMENT

ESTABLISHMENT/ GROWTH HARVEST

NUTRIENT MANAGEMENT PESTS

THREAT/ENDANGERED PLANTS

RESOURCE: WILDLIFE

RESOURCE CONCERN: HABITAT

FOOD COVER/SHELTER

WATER (QUANTITY & QUALITY)      

RESOURCE CONCERN: MANAGEMENT

POPULATION BALANCE THREAT/ENDANGERED

HEALTH

NRCS CONSERVATION PRACTICE PHYSICAL EFFECT WORKSHEET


The policy inventory ii
The Policy Inventory II Policy Inventory

Types of Measures

  • Make explicit the spectrum of measures from least coercive through voluntary methods, quasi-regulatory measures, and on to the most coercive. (see graph)

  • Further disaggregate the taxonomy of payment types

  • Differentiate payments based on farming practices between cost-share and incentive.

  • Accommodate policies using a variety of measures by separating their component parts and assigning the level of resources committed to each.


Continuum of policy measures
Continuum of Policy Measures Policy Inventory

High

Level of

Coerciveness

Low

Range of Environmental Policy Measures


Incorporating aeis and policies into quantitative models
Incorporating AEIs and Policies Into Quantitative Models Policy Inventory

  • Positive and Normative approaches

  • Econometric models;

    • Single equation

    • Multi-equation simultaneous systems

  • Inter-industry (Leontiev) models;

    • I/O models

    • CGE models

  • Ag sector programming models.


Representative farm models sapim
Representative Farm Models (SAPIM) Policy Inventory

A special case of programming models

Principal advantage as a communications tool

Because of diversity in agriculture, it would take a large number of representative farms to accurately portray even one sector in one region or country

Useful for understanding, but not for estimating overall impacts


Coordinated ag sector modelling
Coordinated Ag Sector Modelling Policy Inventory

  • Activity level is the unit of production (acre, hectare, animal unit)

  • Activities embody dissaggregation of

    • Resources (soils, climate, etc.)

    • Sectors (crops, livestock enterprises, etc.)

    • Technology (tillage, fertilization, pesticides, irrigation, conservation practices, etc.)

  • Vector of AEIs is differentiated by activity, implied by dissaggregation

  • Develop and require:

    • A coordinated set of policy questions

    • Guidance on how to adapt the set of AEI’s


Conclusions
Conclusions Policy Inventory

The AEIs

  • Scale-or Size-neutral

  • Universally relevant

  • Sectorally and geographically dissaggregable

  • Measures of data quality for comparability

    The Policy Inventory

  • Focus on entire vector of environmental impacts

  • Don’t mix outcomes and methods

  • Eliminate the “catch all”

  • Make more parallel with the AEIs

  • Make continuum of coercivness more explicit as an organizing principle

  • Subdivide policies/programs based on their objectives and allocation of resources


Conclusions ii
Conclusions II Policy Inventory

Policy Analytic Approaches

  • Fit the analytic approach to the policy being analyzed:What policies does the JWP most want to analyze?

  • Let those who know best do the work

    • Develop a coordinated set of policy questions

    • Develop guidance on how to adapt the set of AEI’s to the questions

    • Let modelers in each member country (or group of countries) adapt existing disaggregated models for the analyses,

  • Conduct hybrid analyses that “cascade” results from one level of modeling to more and more dissaggregated levels.

  • A more “black box” approach that deemphasizes causality may be useful to develop reliable econometric estimates of coefficients between existing policies and the levels of the AEI’s


Reflections
Reflections Policy Inventory

Policy development is highly articulated (many roles and many players)

  • Policy formulation (developing good questions)- NGOs, agricultural interests, political figures

  • Policy research (what are the relationships?) Universities, research agencies, consultants

  • Policy analysis (refining proposals, estimating effects on key outcomes) The Secretariat, upper agency officials, consultants

  • Policy making (cutting deals) politicians compromising on the results for competing objectives

  • Policy implementation (putting programs in place) agencies in member countries, international institutions


Reflections ii
Reflections II Policy Inventory

The limits of policy analysis

  • Illuminating tradeoffs between agricultural production and environmental consequences.

  • Timely and to the point

  • Process allows for iteration and successive approximations

  • Inform at all points of policy development

  • Don’t defer input for the “perfect” analysis


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