Shailesh Shrestha

Climate Impacts in Europe. The JRC PESETA II Project

The objective of the JRC PESETA II project is to gain insights into the sectoral and regional patterns of climate change impacts in Europe by the end of this century. The study uses a large set of climate model runs and impact categories (ten impacts: agriculture, energy, river floods, droughts, forest fires, transport infrastructure, coasts, tourism, habitat suitability of forest tree species and human health). The project integrates biophysical direct climate impacts into a macroeconomic economic model, which enables the comparison of the different impacts based on common metrics (household welfare and economic activity). Under the reference simulation the annual total damages would be around €190 billion/year, almost 2% of EU GDP. The geographical distribution of the climate damages is very asymmetric with a clear bias towards the southern European regions. More than half of the overall annual EU damages are estimated to be due to the additional premature mortality (€120 billion). Moving to a 2°C world would reduce annual climate damages by €60 billion, to €120 billion (1.2% of GDP).

Impacts of greening measures and flat rate regional payments of the Common Agricultural Policy on Scottish beef and sheep farms

The latest Common Agricultural Policy (CAP) reforms could bring substantial changes to Scottish farming communities. Two major components of this reform package, an introduction of environmental measures into the Pillar 1 payments and a move away from historical farm payments towards regionalized area payments, would have a significant effect on altering existing support structures for Scottish farmers, as it would for similar farm types elsewhere in Europe where historic payments are used. An optimizing farm-level model was developed to explore how Scottish beef and sheep farms might be affected by the greening and flat rate payments under the current CAP reforms. Nine different types of beef and sheep farms were identified and detailed biophysical and financial farm-level data for these farm types were used to parameterize the model. Results showed that the greening measures of the CAP did not have much impact on net margins of most of the beef and sheep farm businesses, except for ‘Beef Finisher’ farm types where the net margins decreased by 3%. However, all farm types were better off adopting the greening measures than not qualifying for the greening payments through non-compliance with the measures. The move to regionalized farm payments increased the negative financial impact of greening on most of the farms but it was still substantially lower than the financial sacrifice of not adopting greening measures. Results of maximizing farm net margin, under a hypothetical assumption of excluding farm payments, showed that in most of the mixed (sheep and cattle) and beef suckler cattle farms the optimum stock numbers predicted by the model were lower than actual figures on farm. When the regionalized support payments were allocated to each farm, the proportion of the mixed farms that would increase their stock numbers increased whereas this proportion decreased for beef suckler farms and no impact was predicted in sheep farms. Also under the regionalized support payments, improvements in profitability were found in mixed farms and sheep farms. Some of the specialized beef suckler farms also returned a profit when CAP support was added.

Quantifying the viability of farming in Ireland: can decoupling address the regional imbalances?

Abstract Irish agriculture has undergone fundamental transformations in the last two decades. A growing divergence between farming and non-farming incomes and a significant increase in part-time farming have led to intense debates surrounding the future viability of the Irish farmer. Irrespective of such deliberations, agriculture still remains an important employer and contributor to the regional economies of Ireland, a factor that is discussed in this paper. An analysis of the financial performance of farms shows that the regions that rely most on agriculture as an employer have the most economically and physically disadvantaged farms. The paper examines the role of agricultural policy in addressing this regional imbalance. In particular, the recent decoupling policy is examined. The results of economic models suggest that the decoupling reform increases the viability of farming in Ireland across all regions. However, the decision to implement the historical decoupled payment scheme has served to perpet...

Methodology to assess EU Biofuel Policies: The CAPRI Approach

This report is based on the outcome of a study carried out by the European Commissions Joint Research Centre - Institute for Prospective Technological Studies (JRC-IPTS, Spain) in cooperation with EuroCARE (Bonn, Germany). The report provides a detailed description of the methodology developed to assess the implications of the European Renewable Energy Directive on the agricultural sector, with an explicit focus on regional effects of biofuel targets in the EU. For the analysis, the spatial agricultural sector model CAPRI has been extended to include a global representation of biofuel markets (with endogenous supply, demand and trade flows for biofuels and biofuel feedstocks) while keeping the focus on regional impacts in the EU. The model is capable to simulate the impacts of EU biofuel policies on food production and prices, the potential use of by-products in the feed chain, the increasing pressure on marginal and idle land and the share of imported biofuels (self-sufficiency indicators). CAPRI is now able to jointly assess biofuel and agricultural policies, including policy instruments defined at the Member State level. The CAPRI biofuel module allows for a detailed analysis of most relevant biofuel support instruments like consumer tax exemptions, quota obligations, import tariffs and other trade measures. Additionally, the model allows for analysing scenarios regarding technical progress in 2nd generation technologies for biofuels.

Potential EU-Mercosur Free Trade Agreement: Impact Assessment, Volume 1: Main results

This report presents the simulations made with two different models of two alternative hypothetical versions of a bilateral free trade agreement between the EU and Mercosur. The two versions of the agreement are based on the final negotiating positions of each party in the previous unresolved negotiating round. A global CGE model, GLOBE, simulates the economy-wide impacts of the trade policy changes involving all sectors of the two regional blocks. A global partial equilibrium model, CAPRI, simulates only the impacts generated by changes in agricultural trade policy and incurred by the agricultural sectors of the two regions. However, CAPRI considers individual agricultural products in more detail and can generate the territorial distribution of their production within the EU at the NUTS 2 regional level. The simulation results show that the economic losses and the adjustment pressures arising from a bilateral trade agreement between the EU and the countries of Mercosur would, as far as the EU is concerned, fall very heavily on the agricultural sector. The gains to other sectors would be widely diffused and, given the very small magnitude of these gains relative to the EU economy as a whole, would be easily absorbed without imposing an adjustment burden. The aggregate welfare changes for the EU, whether measured across the whole economy or on a partial basis with respect only to the activities agricultural production and food consumption, would be small. However, the trade-off involved in the redistribution of income between agriculture and the rest of the economy is steeper in the scenarios depicting the terms requested by Mercosur than in those involving the terms offered by the EU. The Mercosur request provokes a much greater downward impact on EU agriculture whereas the additional gains elsewhere (to non-agrifood sectors or to consumers in the EU) are relatively smaller.

Irish farms under climate change – is there a regional variation on farm responses?

The current paper aims to determine regional impacts of climate change on Irish farms examining the variation in farm responses. A set of crop growth models were used to determine crop and grass yields under a baseline scenario and a future climate scenario. These crop and grass yields were used along with farm-level data taken from the Irish National Farm Survey in an optimizing farm-level (farm-level linear programming) model, which maximizes farm profits under limiting resources. A change in farm net margins under the climate change scenario compared to the baseline scenario was taken as a measure to determine the effect of climate change on farms. The growth models suggested a decrease in cereal crop yields (up to 9%) but substantial increase in yields of forage maize (up to 97%) and grass (up to 56%) in all regions. Farms in the border, midlands and south-east regions suffered, whereas farms in all other regions generally fared better under the climate change scenario used in the current study. The results suggest that there is a regional variability between farms in their responses to the climate change scenario. Although substituting concentrate feed with grass feeds is the main adaptation on all livestock farms, the extent of such substitution differs between farms in different regions. For example, large dairy farms in the south-east region adopted total substitution of concentrate feed while similar dairy farms in the south-west region opted to replace only 0·30 of concentrate feed. Farms in most of the regions benefitted from increasing stocking rate, except for sheep farms in the border and dairy farms in the south-east regions. The tillage farms in the mid-east region responded to the climate change scenario by shifting arable production to beef production on farms.