ENERGY SMART FOOD – LINKING FOOD AND CLEAN ENERGY

If energy prices continue to rise, the global food sector will face increased risks and lower profits. The efforts from low-GDP countries to emulate high-GDP countries in achieving increases in productivity and efficiencies in both small and large-scale food systems may be constrained by high energy costs. Lowering the energy inputs in essential areas, such as farm mechanization, transport, heat, electricity and fertilizer production, can help the food sector mitigate the risks from its reliance on fossil fuels. Hence, a major focus of food processing industries should be to reduce energy demand and/or promoting efficient energy management as well as introducing renewable energy technologies (RETs) to reduce the food sector’s dependence on fossil fuels. Indeed, introduction of RETs should happen from field to factory (processing) and up to the retail-outlet.  Energy.Smart

The encouraging development is that there is increasing consensus on the necessity on energy smart food and very recently in a study on energy-smart food, the Food and Agriculture Organization of the UN (FAO) stresses that agriculture’s dependence on fossil fuels is undermining efforts to build a more sustainable world economy. The paper, which is titled “Energy-Smart Food at FAO: An Overview[1],” notes that world food production consumes 30% of all available energy, most of which occurs after the food leaves the farm. The paper calls for: increasing the efficiency of direct and indirect energy use in agri-food systems; using more renewable energy as a substitute for fossil fuels; and improving access to energy services for poor households. It outlines numerous approaches to adapt practices to become less energy intensive.

However, to promote the campaign on energy smart food, we need affordable technologies at farm-level and food processing level. Unfortunately, most of the ‘energy efficient’ technologies in the agriculture sector of developing countries are expensive and not within the reach of poor farmers. Similarly, financing is also pivotal. Most farmers do not have upfront investment for introducing energy efficient devices in to their farm operations. Can we think of introducing a concessional loan systems into the farm system to meet this requirement as well as provide a really doable and practical contract farming model to the farmers, where, farmers will receive advance market commitments from global retailers and big MNCs in food market chain, and therefore, farmers will be in a comfortable situation to produce more and trade more? Indeed, agriculture insurance is also a key and obligatory intervention in the current context; particularly to reduce the risk of damage and loss due to climate change related adverse effects.

We also need enabling policies: strong and long-term supporting policies and innovative multi-stakeholder institutional arrangements are required if the food sector is to become energy-smart for both households and large corporations. Financial policies to support the deployment of energy efficiency and renewable energy will also be necessary to facilitate the development of energy-smart food systems. Examples exist of cost-effective policy instruments and inclusive business schemes that have successfully supported the development of the food sector. These exemplary policy instruments will need to be significantly scaled up if a cross-sectoral landscape approach is to be achieved at the international level.

Indeed, development organisations like SNV Netherlands Development Organisation has a major role to play in this domain so that the agriculture sector of developing countries are ready for the deployment of appropriate technologies; introduction, sharing and adaptation of energy-smart technologies; and carrying out capacity building, support services, and education and training on energy smart food production supply chain. Nevertheless, addressing the energy-water-food-climate nexus is a crucial and complex challenge. It demands significant and sustained efforts at all levels of governance: local, national and international.

 

Keshav C Das

Senior Advisor, Renewable Energy and Climate Finance

SNV Netherlands Development Organisation

 

[1] http://www.fao.org/docrep/014/i2454e/i2454e00.pdf

Climate Smart Agriculture: Enhancing Adaptive Capacity of the Rural Communities

 

 

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Agriculture remains crucial for pro-poor economic growth in most developing countries. More than in any other sector, improvements in agricultural performance have the potential to increase rural incomes and purchasing power for large numbers of people to lift them out of poverty. It is the largest contributor to average global GDP; the biggest source of foreign exchange, and the main generator of savings and tax revenues. In addition, about two-thirds of manufacturing value-added is based on agricultural raw materials.

And, climate change, however, is causing the greatest threat to agriculture and food security in the 21st century, particularly in many of the poor, agriculture-based countries of sub-Saharan Africa (SSA), Asia with their low capacity to effectively cope.  The agriculture of these countries is already under stress as a result of population increase, industrialization and urbanization, competition over resource use, degradation of resources, and insufficient public spending for rural infrastructure and services. The impact of climate change is likely to exacerbate these stresses even further. The outlook for the coming decades is that agricul­tural productivity needs to continue to increase and will require more climate resilient technologies and methods to meet the demands of grow­ing populations and ensuring global food security.

Preserving and enhancing food security requires agriculture production systems to change in the direction of higher productivity and also, essentially, lower output variability in the face of climate risk and risks of an agro-ecological and socio-economic nature. In order to stabilize output and income, production systems must become more resilient i.e., more capable of performing well in the face of disruptive events. More productive and resilient agriculture requires transformations in the management of natural resources (land, water, soil nutrients and genetic resources) and higher efficiency in the use of these resources and inputs for production. Transitioning to such systems could also generate significant mitigation benefits by increasing carbon sinks, as well as reducing emissions per unit of agricultural product. These transformations are needed in both commercial and subsistence agriculture systems but with significant differences in priorities and capacity.

Until now, there are very few limited interventions of climate change adaptation/mitigation measures in the agriculture sector, which is particularly true for least developed countries like Nepal. Such interventions are mainly at micro level with respect to specific crops but there is no evidence of a macro and sectoral study in the field of climate smart agriculture which could result country specific strategies in the low emission agriculture development and/or climate smart agriculture. 

It is in this context that a comprehensive study is necessary to carry out which could identify approaches for climate change adaptation and mitigation in the agriculture sector and positioning the sector as a climate smart agriculture domain.  In a country like Nepal we shall aim to:

ü  identify effective climate-smart practices, which could be implemented in the agriculture system

ü  assess current capacity of value chain actors to adopt climate friendly practices in agriculture sector, and

ü  identify an ecosystem approach, which can be adopted for working at landscape scale and ensuring inter-sectoral coordination for effective climate change responses

However, we do not explicitly find any strategies on the climate change adaptation and agriculture in Nepal.  The basic guiding principles of UN on the climate change and agriculture, which includes adopting agriculture-led growth as the main strategy for achieving the first Millennium Development Goal (MDG) of halving the proportion of people living on less than a dollar a day and of hungry people by 2015, and accelerating agricultural productivity growth has not been addressed in the current programme and activities of Nepal. In addition, the four mutually reinforcing pillars, based on which other countries are developing climate change adaptation and mitigation strategies related to agriculture, viz.,- (1) extending the area under sustainable land management and reliable ecosystem development; (2) improving rural infrastructure and trade-related capacities for market access; (3) increasing food supply, reducing hunger, and improving responses to climate change and agriculture’s negative externalities; and (4) improving agriculture research, technology dissemination and adoption; are also missing from the policy documents of Nepal.

 It necessitates exploring potentiality of developing a climate smart agriculture sector in Nepal and SNV can play a key role in stirring the sector with its long term experiences in the agriculture domain in the LDCs and capacity development/advisory capabilities.

 Why Climate Smart Agriculture (CSA)?

Climate-smart agriculture (CSA) addresses the challenges of building synergies among climate change mitigation, adaptation and food security which are closely related within agriculture, and minimizing their potential negative trade-offs. Climate-smart agriculture (CSA) seeks to enhance the capacity of the agriculture sector to sustainably support food security, incorporating the need for adaptation and the potential for mitigation into development strategies[i].

CSA builds on existing efforts to achieve sustainable agriculture intensification such as Sustainable Crop Production Intensification (SCPI) and it will: (i) sustainably intensify production systems to achieve productivity increases thereby supporting the achievement of national food security and development goals; (ii) increase the resilience of production systems and rural livelihoods (adaptation); and (iii) reduce agriculture’s GHG emissions (including through increased production efficiency) and increase carbon sequestration (mitigation).

There is no blueprint for CSA and the specific contexts of countries and communities would need to shape how it is ultimately implemented. Climate-smart agricultural production technologies are therefore aimed at maximizing food security benefits and, at the same time, can deliver significant climate change mitigation and adaptation co-benefits[ii]. The main objective of CSA is to improve food security, incorporating adaptation as required to meet this objective. In this context, opportunities for mitigation shall be considered as additional co-benefits that could potentially be financed by external mitigation funding sources.

The best plausible options of CSA consist of adaptation and mitigations activities. Both these approaches (adaptation and mitigations) are inter-linked and can be practiced based on the emission trends and/or agriculture value chain. For instance, adaptation measures can be derived and formulated based on the crop production system, storage and conservation or livestock production system.

What next?

There are several available climate smart agriculture approaches. However, a careful selection of and adoption of appropriate methods and practices is necessary. There are numerous FAO, IFAD and other resources, guidelines, tools, technologies and other applications, which can be used to for selecting the most appropriate production systems, undertaking land use and resource assessments, evaluating vulnerability and undertaking impact assessments. This will help to identify the priority areas of CSA for Nepal. To introduce CSA in Nepal, an assessment of capacity of value chain actors will also be necessary.

There is an urgent need for climate smart agriculture adoption, but knowledge and methodological gaps exist in terms of practices, policy and finance in Nepal. These gaps hinder the ability of stakeholders (from smallholders to policy makers and development agencies) to be able to successfully implement climate smart actions. Therefore, Nepal’s government could carry out study to establish a baseline on CSA practices in Nepal; which could be eventually used for developing CSA implementation plan for specific geographical regions of Nepal.  

There is also need of good policy formulation at the national level, which could include the agriculture policies for rural and infrastructure development, foreign direct investment to promote private sector investment in the agriculture value chain, favourable policies and regulations for agriculture marketing and introducing conducive trade and commerce polices with appropriate tariffs.   

There is also a necessity to create an interface between CSA and other core sectors of Nepal, viz., renewable energy, tourism (mainly ecotourism), water security, forestry and plantation.  It is believed that such interfaces will not only be useful for long term sustainability of CSA activities but also it will enhance the efficacy of CSA programmes wither greater outcome and wider impacts at the community and macro level.  Indeed, to achieve this, involvement of community and local organization through localization strategies will be obligatory.

Keshav C Das

SNV Netherlands Development Organisation

References:

 


[i] FAO (2010). “Climate-smart” Agriculture. Policies, Practices and Financing for Food Security, Adaptation

and Mitigation. Rome, FAO.

[ii] Branca, G., N. McCarthy, et al. (2011). Climate-smart Agriculture: A Synthesis of Empirical Evidence of Food

Security and Mitigation Benefits from Improved Cropland Management. Working paper. Rome, FAO.

 

Why environmental issues are important for business?

Jan2013Business can’t sustain without a sustainable production and consumption value chain development. Environmental sustainability is now conceived and implemented in regular business operations of companies not merely as a ‘green washing’ approach, rather, for most companies these days; sustainability is the core of corporate strategy. The rationale for this paradigm shift in the corporate strategy [from the old school of thoughts-produce more with less cost] is mainly powered with energy efficiency, process management, introduction of cleantech, green growth etc.

In one of the recent global survey of McKinsey[1], it is stated- companies know that consumers and employees care about the environment, and their interest often presents real business opportunities and risks. According to the survey, an emerging key environmental concern is biodiversity, or the diversity of species, variety of ecosystems, and variability of genes. The survey found that a majority of executives (59 percent), see biodiversity as more of an opportunity than a risk for their companies. They identify a variety of potential opportunities, such as bolstering corporate reputations with environmentally conscious stakeholders by acting to preserve biodiversity and developing new products or ideas from renewable natural resources. The positive outlook on biodiversity is in stark contrast to executives’ views on climate change in late 2007, when only 29 percent saw the issue as more of an opportunity than a threat[2]. Perhaps, addressing climate change over the past few years has changed some executives’ views on the potential upside of environmental issues.

Based on the ongoing discussion in the World Economic Forum (Davos) and the deliberations of Lord Stern, author of the government-commissioned review on climate change that became the reference work for politicians and green campaigners as well as the stern warning of Jim Yong Kim, the new president of the World Bank, are two significant statements in the beginning of 2013, which reaffirms the severity of the climate change problem and necessities to take up this issue as a market determinant, and perhaps, also as a business’s core activities. While Mr. Kim pledged to make tackling climate change as a priority of his 5 year term, he stated that “there will be water and food fights everywhere”. Lord Stern regretted that he underestimated the risks of climate change in his much referred Stern Review Report of 2006 and he now believed that he could have been more ‘blunt’. He said: “Looking back, I underestimated the risks. The planet and the atmosphere seem to be absorbing less carbon than we expected, and emissions are rising pretty strongly. Some of the effects are coming through more quickly than we thought then.”

With these concerns of two world leaders, the critical question for companies and businesses is: should they capitalize on this increasing threat of climate change and aligned their corporate environmental sustainability strategy? The answer is certainly YES. The corporate strategy should be to engage in these environmental value chains through market-based solutions that can quickly and effectively deploy capital to appropriate projects. The companies should use the market more effectively, and look for options with new climate finance mechanism and tools (like nationally appropriate mitigation actions-NAMAs), which will not only bring new investment opportunities to fund private sector sustainability and carbon reduction projects but also create new windows for profits. With corporate strategy ever more sensitive to climate risks and environmental sustainability, the business can adopt for greening of supply chains as a bright spot of opportunity for corporate investment in offsetting – and in some cases “insetting” – particularly in the realm of agriculture[3].

Keshav C Das, Senior Advisor, Climate Finance, REDD, and Renewable Energy

SNV Netherlands Development Organisation