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Climate Change and Energy Impacts on Water and Food Scarcity

Climate Change and Energy Impacts on Water and Food Scarcity. Mark W. Rosegrant Director Environment and Production Technology Division.

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Climate Change and Energy Impacts on Water and Food Scarcity

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  1. Climate Change and Energy Impacts on Water and Food Scarcity Mark W. Rosegrant Director Environment and Production Technology Division High-level Panel Conference on “Water and Agriculture: Implications for Development and Growth,” organized by SAIS and CSIS, Washington DC, USA, March 30, 2009

  2. Outline • Trends in Global Food and Energy Prices • Contributing Factors to Food Scarcity and Price Rises: Past and Future • Policy Recommendations for Pro-Poor Growth Page 2

  3. Trends in Food and Oil Prices Page 3 Source: Data from WB 2009

  4. Contributing Factors to Food Scarcity and Price Rises: Past and Future

  5. Contributing Factors to Food Price Rises Biofuels Rapid income growth Underinvestment in agricultural productivity and technology Water and land scarcity, production shocks (emerging climate change) High input and transport costs (energy price) Trade policy, low stocks, speculation, exchange rates

  6. Implications of High Energy Prices: Water • Demand for biofuel increases demand for water • Higher energy costs will increase the costs of water pumping, conveyance and desalinization • Higher value of water will demand efficient allocation (markets) and conservation (precision technologies) • Higher energy price will make water and power subsidies too costly Source: Zilberman et al. 2008 Page 6

  7. Implications of High Energy Prices: Land • Livestock market effects • Higher feed prices will cause livestock prices to go up and consumption to go down • Increased pressure on pasture land • Increased demand for land will lead to less conservation and expansion of agricultural land base • Environmental pressure: bringing CRP land into production of energy crop • Future rapid expansion of biofuels for climate change mitigation Page 7

  8. Reference Scenario: Biomass & Land Use Reference scenario is BAU where there is no attempt to control GHG emissions. Biomass only enters when competitive with fossil fuels. Emissions Mitigation Scenario Policy Scenario includes a cumulative reduction of emissions of 40% from 2012 to 2100, where limits on fossil fuel usage spur biomass conversion. Source: Gurgel et al. 2007

  9. Global Annual Run-off Climate change will lead to major changes in water availability across the globe, with consequences for droughts and floods Page 9

  10. Projected water consumption by sector, 2000, 2025 and 2050 Source: IMPACT Model Projections Page 10

  11. 2025 2050 BAU Business as 1995 Usual 0 -100 -200 million mt -300 -400 -500 Loss of grain production due to water scarcity, developing countries Source: Rosegrant et al. 2002. World Water and Food to 2025: Dealing with Scarcity; IFPRI IMPACT simulations, 2008 Page 11

  12. Climate Change Effects on Maize Yield Global rainfed maize yields decline by 17% Hadley GCM, SRES Scenario A2a, Maize Variety IB0041 Source: G. Nelson, J. Koo, R. Robertson, “Simulating the Yield Consequences of Climate Change: Combining Crop Models with Location-specific Climate and Physical Constraints”, EPTD, IFPRI, in draft

  13. Global Price of Maize:Baseline and Without climate change, 2000-2050 No climate change Baseline Source: IFPRI IMPACT simulations for HadCM3/SRES B2 scenario (with IMAGE temperature and CO2 fertilization effects, April, 2008) Page 13

  14. POLICY DIRECTIONS

  15. Investments in Agricultural Research and Technology • Increasing crop productivity: agricultural research,water management, and rural investment • Emphasis on crop breeding (including biotechnology) targeting abiotic and biotic stresses • Water harvesting, minimum tillage, integrated soil fertility management • Rural infrastructure investment to improve access to markets, risk insurance, credit, inputs Page 15

  16. Need full integration of policies aimed at agricultural growth, biofuels and energy, climate change and carbon sequestration Dealing with competing demands for land and trade-offs with environment can only be met by bringing externalities into the growth equation  Integration of Energy and Climate, and Agricultural Growth Policies Page 16

  17. Establish economic incentives for water use Expand markets for environmental services (watershed management, biodiversity) Develop markets for agricultural and forest carbon, generating new value streams in rural areas through carbon mitigation Create and Expand Markets in Natural Resources Page 17

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