Economic analysis of GHG emission reduction options for rice - PowerPoint PPT Presentation

University of Tsukuba Graduate School of Life and Environment Sciences Economic analysis of GHG emission reduction options for rice cultivation: A case study in Nam Dinh province, Vietnam. Nguyen Thu Thuy-201326029 Supervisor: Professor Masuda Misa 15 DECEMBER, 2014 1

CONTENTS Background 1. Research Objective and study area 2. Methodology 3. Preliminary result 4. Primary conclusion and discussion 5. Future study 6.

1. Background Top 10 emitters GHGs budget of rice field Emission (CO 2 eq) Emission (CO 2 eq) (Rice Cultivation) ( Burning rice residue) 120000 2000 100000 1800 1600 80000 Gigagrams 1400 60000 1200 Gigagrams 1000 40000 800 20000 600 400 0 200 0 Source: FAOSTAT,2012 Source: Wassman, IRRI, 2010

1. Background  Emissions from agriculture comprise 43.1 % of Vietnam’s GHG emission in 2000 total carbon emissions, of which rice cultivation comprises of 50% of the share. (MONRE, VSNC, 2010)  Government of Vietnam (GVN)’s Green Growth Strategy aims to reduce carbon emissions while achieving growth GHG emission projection objectives  Ministry of Agriculture’s 20-20-20 strategy aims to reduce carbon emissions from agriculture sector by 20 percent, while reducing poverty by 20 percent and increasing agricultural gross domestic product (GDP) by 20 percent.

1. Background 7 million ha 80 million tons of agricultural residue Source: IAE A huge amount Source: Wassman,IRRI of carbon emission Q1: How to solve Q2: How to reduce agricultural residue emission from rice burnt? cultivation? Achieving low emission grow for rice Reuse agricultural residue; using alternative cultivation in Vietnam fertilizers and alternative irrigation method

2. OBJECTIVE  Assessing environmental consequences of traditional rice farming practices in term of GHG emission.  Evaluating the cost-effectiveness and adoption of selected GHG reduction options for rice cultivation.  The use of alternative organic fertilizer ( biochar and compost)  The application of Alternative Wetting and Drying (AWD)  Find out the most climate-smart agriculture system + Improve rice production + Reduce GHG emission 6

Mitigation option 1: Using Biochar Improve soil fertility (Chidumayo,1994) Carbon GHGs sequestration emission ( Johnanes Reduction 12- Lehmann, 84% ( Johnanes 2006) Lehmann, 2007) Picture are taken by IAE, 7 Vietnam)

Mitigation option 2: Using Compost Avoid high emission from burning residue Soil fertility improvement Creates biologically healthy soils 8 Source: IAE

Option 3: Alternative Wet and Dry (AWD) irrigation method Saving water Shifting from flood irrigation to AWD irrigation  soil turns from anaerobic condition to aerobic condition Reducing GHGs Picture are taken by IAE, 9 emission Vietnam)

Study site Nam Dinh Thinh Long: 40 households province Rang Dong: 40 households • Population: 0.5 million • Avarage temperature: 24 o C • Natural land: 1,652 km 2 -28 coastal communces with 12,000ha rice cultivation; 5000ha affected heavily by sanlinity Pilot study

3. METHODOLOGY 1. Data collection  Field data collection by conducting survey + Household survey: randomly 80 households (Acreage under di ฀ erent management systems Adoption details of abatement Rice field map Soil properties options rice variety, fertilizer management at various stage, water application, etc. Cost of production and Revenue  Second data collection 2. Apply GIS and Remote Sensing  build soil, land use and rice Irrigation distribution map Manure Climate (MONRE) DNDC Fertilizers 2014,2020 CROPS daily 3. Apply De Nitrification- De Composition (DNDC) model  Manage ,2030 record calculate GHGs emission. CH 4, N 2 O 4. Apply Cost- Benefit (CBA) and Marginal Abatement Cost Curve to evaluate economic value Calibrate model by GHG sampling data from IAE 11

4. Preliminary result

Farming Management information Ord, Activities Date Biochar application Composting AWD Convention application application application 1 Cultivation: - Tillage: 13 Jan Plow depth of 30- Plow depth of Plow depth of Plow depth of 30- 60mm 30-60mm 30-60mm 60mm - Sowing: 21 Jan - Transplanting: 17 Feb -Harvest planning: 15 June 2 Fertilizers: - Base dressing: N, P, 16-Feb 6.6 ton biochar / ha; 11.3 ton 10 ton manure/ha 10 ton manure/ha K fertilizers, biochar, 90kg P2O5; 30kg compost /ha; ; 90kg P2O5; 90kg P2O5; 30kg composting Urea; 90kg P2O5; 30kg Urea; Urea; 30kg Urea; 1st dressing fertilizer 1-March 50 kg Urea; 30 kg 50 kg Urea; 30 50 kg Urea; 30 50 kg Urea; 30 kg K2O; kg K2O; kg K2O; K2O; nd dressing 2 19-March 20 kg Urea, 30 kg 20 kg Urea, 30 20 kg Urea, 30 20 kg Urea, 30 kg fertilizer in flowering K2O kg K2O kg K2O K2O period 3 Flooding Continuously , water Continuously , AWD irrigation Continuously , depth of 5-10cm water depth of 5- water depth of 5- 10cm 10cm 13

Social characteristics n1=80 Items Thinh Long Rang Dong Average Mean age (years) 38.93 40.3 39.6 Schooling (years) 7.93 9.03 8.48 Experience in rice farming (years) 25.33 17.78 21.55 Household size 4.75 4.94 4.88 Number of labor per household 2.30 2.48 2.39 Per capita cultivated land (ha) 0.27 0.31 0.29 Farm size /household(ha) 1.23 1.20 1.21 Education level quite high High experience year involve farming activities

Occupation and income proportion 120 100 80 Occupation proportion 60 Income propotion 48.07 40 27.3 20 19.2 5.43 0 Agriculture Livestock Service Other Main occupation: agriculture 15 Lower income

Proportion of crop residue use in surveyed sites Total count: 240 70.0 60.0 63.3 Rate of rice residue use (%) 50.0 46.7 40.0 36.7 36.7 30.0 35.0 Percentage 20.0 23.3 18.3 10.0 13.3 13.3 10.0 3.3 0.0 Multipurpose rice residue use 16

Perception of farmers about the options Farmer perception on Farmer perception on biochar compost quality quality 3% 10% 22% N=80 Unknown 2% 7% Unknown Lower than exist A 28% Lower than exist fertilizer 20% 25% fertilizer significant Equal to exist fertilizer Equal to exist fertilizer adoption Higher than exist Higher than exist 40% fertilizer fertilizer Unclear 43% Famer perception about applying AWD irrigation 4% • More people believed the 11% Unknown quality of alternative 15% Too complicated 40% Complicated fertilizers. Not complicated Simple • Find difficulty in applying 30% AWD  low adoption 17

Initially GHGs emission from different farming techniques eq Option CO 2 % Reduction 30 GHGemission/year emission (ton/ha) 25 20 ton CO2e/ha 15 Traditional 27.6 farming 10 (TRA) 5 59.42 Biochar 11.2 application 0 Traditional Biochar Compost Applying AWD (BC) farming application application irrigation 28.26 Compost 19.8 GHG emission from different farming techniques application (COM) 53.28 GHGs emission Applying 12.8 AWD BC<AWD<COM<TRA irrigation (AWD) 18

Estimate benefit carbon exchange T otal CO2e saving (ton/ha/year) From RICE CULTIVATION with the option T otal Applying AWD irrigation 14.60 CO 2 e saving From avoid Compost application 20.14 rice residue burning Biochar application 30.07 Assume 63.3% rice 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 residue will be burnt if not use for biochar and High abatement potential in saving CO 2 eq compost making. 19

CBA and MACC result Calculate benefits, Calculate cost Identified costs and NPV, FPV) effectiveness (CE) quantity cost, benefit, discount rate(%) Compare and select preferred option having high CE and Environmental Variable and AP and social capital cost, factors outputs Abatement rate (AR), tCO 2 y -1 ha -1 Calculate (CE) Recalculate cost Abatement and (AP) for different effectives (CE) and potentials (AP), potential GHG Information abatement potential (AP) total Gg CO 2 e mitigation collection Scale measure (hectare, ,..)   n n B C ∑ ∑ = − − t t   CE I + + 0 t t   ( 1 ) ( 1 ) r r = = t 1 t 1 Negative CE was considered as win-win decision Positive CE was considered expensive options

NPV result from CBA analysis Net Benefit from mitigation options 2800.00 2700.00 2600.00 2500.00 US($) NPV (USD) 2400.00 2300.00 2200.00 2100.00 Biochar Compost AWD Biochar has the biggest net benefit

MACC analysis Single cost effectiveness (CE) and potential GHG reduction in comparison 200.00 150.00 100.00 CE/tCO2eq saving 50.00 (USD) Abatement potential (tCO2 eq saving/ha) 0.00 Biochar Compost AWD application application application -50.00 -100.00 -150.00 AWD with high intensive irrigation application and high investment for drainage system  AWD is expensive option

MACC analysis Margin Abatement Cost Curve for three options 200.00 The government win GHG 150.00 With positive reduction, fammers obtain CE  no income 100.00 AWD motivation in 50.00 GHG 14.6 USD($) reduction Sell in any 0.00 shadow 30.07 20.14 -50.00 Biochar price COM -100.00 -150.00 Saving tCO2eq CE range from -110.12 to -86.35 per tonCO2eq saving  win-win range of policy- making The best mitigation option in term of cost effectiveness is composting, however biochar option illustrated both high NPV and high cost effectiveness