Ana Iglesias, Universidad Politécnica de Madrid La economía de agua de riego 24 Septiembre 2008

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1 Ana Iglesias, Universidad Politécnica de Madrid La economía de agua de riego 24 Septiembre 2008 Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

2 PESETA (JRC) Adaptation (DG Agri) PICCMAT (6th FP) CIRCE (6th FP) SWAP (6th FP) ClimateCost (7th FP) MEDROPLAN (EuropeAid, MEDA Water) Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

3 For the last 10,000 years we have been living in a remarkable stable climate that allowed the whole of the human development to take place In all that time, though the medieval warming and the Little Ice Age, there was only a variation of 1ºC Now we see the potential for sudden change of between 2 and 6ºC We just don t know what the world is like at those temperatures, we have no idea if we can live in it Adapted from: Robert Corell, The Guardian, Oct 2007 Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

4 Production in a changing climate Objective: discussion 1. Critical thinking: What does climate change mean for production? Complex outlook, multiple dimensions Challenges and opportunities 2. Solutions: What is the best future we can hope for? Focus on policy integration Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

5 Rethinking climate impacts Climate impacts Climate dynamics f Societal dynamics Source: CIRCE Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

6 Climate dynamics Observed and projected warming in the EU Source: Stott et al. 2004, Hadley Centre Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

7 More extreme events Projected changes in drought risk (%) under the A1B MPI scenario Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

8 1911/ / / / / / / / / / / /00 Hm3 SPI (24 months) Annual Streamflow in Bolarque and SPI Ann Inflow SPI (24) Lineal (Ann Inflow) Source: Iglesias et al., 2007 Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

9 % change from baseline Portugal # 1. Scenarios: Water supply and demand Atlantic Ocean Changes in water supply and demand with climate Sevilla change 5 12 Bilbao # France # Barcelona Madrid # 3 Valencia # # 6 Mediterranean Sea (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Irrigation demand Rservoir water inflow Available water resources Iglesias et al Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

10 Rethinking climate impacts Climate impacts Climate dynamics f Societal dynamics Source: CIRCE Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

11 Million t Global scale Agricultural exports and imports (2006) 1, Exports Imports EU USA China RoW Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

12 # 2. Local realities (vulnerabilities) Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

13 Local realities (vulnerabilities) Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

14 Rethinking climate impacts Climate impacts Challenges and opportunities Climate dynamics f Societal dynamics Source: CIRCE Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

15 Challenges and opportunities Regional disparities Crop yield changes under the HadCM3/HIRHAM A2 and B2 scenarios for the 2080s and for the ECHAM4/ RCA3 A2 and B2 scenarios for the 2080s and ECHAM4/ RCA3 A2 scenario for the 2020s compared to baseline (Iglesias et al. 2007) Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

16 Boreal Expansion of areas and growing season Expansion of weeds, pests, diseases Risk of soil structure loss Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

17 Atlantic N Atlantic C Sea level rise Floods, waterlogging Summer drought Environmental policy determines the opportunities Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

18 # 3. Useful knowledge The role of the human capital, Gary Becker (Nobel Price, 1992) Fuente: OECD Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

19 Atlantic S Decline of high quality crops Regulations may limit opportunities Bordeaux red: Cabernet Sauvignon, Cabernet franc, Merlot, Petit Verdot, Carménère, Malbec Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

20 Balance Carbono en Champagne Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

21 Continental N Continental S Heat stress and drought in summer (e.g., 2007) Floods, water-logging Environmental degradation New crops, energy crops Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

22 # 4. Flexible risk management The past is not a reliable indicator of the future Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

23 Alpine Glacier melt Modification of the hydrological regime with large implications for soil erosion, water availability, etc Further stress to highly vulnerable areas Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

24 Med N Med S Water scarcity and drought Conflicts among water users Vulnerability of the complex interactions of agricultureecosystems Limitations of rural development Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

25 The Stern Review of the Economics of Climate Change (Stern et al, 2006) Argues that the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP1 each year Challenged by many economists with large working experience in climate change (Tol, 2007). Ignores and contradicts numerous unquestionable results (Nicholls and Tol, 2005; Nordhaus, 2006; Sachs, 2001; Fankhauser and Tol, 2005) Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

26 % change 0.15 Change value of GDP 2080s (agriculture shock) Rest of EU Med North Med South ROW HadCM3 A2 HadCM3 B2 ECHAM A2 ECHAM B2 Source: Iglesias et al., 2007 Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

27 Production in a changing climate Objective: discussion 1. Critical thinking: What does climate change mean for production? Complex outlook, multiple dimensions Challenges and opportunities 2. Solutions: What is the best future we can hope for? Focus on policy integration Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

28 Rethinking climate impacts Climate impacts Climate dynamics f Societal dynamics Source: CIRCE Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

29 Kyoto protocol Lisbon strategy SD strategy Existing set of policies EU White Paper on Adaptation CAP WFD Nitrates D Energy D Local initiatives (early stages, dissemination, awareness building) Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

30 Building adaptive capacity Awareness raising Research (spatial and time dimension) Knowledge transfer Risk management Policy support in order to deliver adaptation actions Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

31 Building adaptive capacity Delivering adaptation actions Supported by policy Strategic combination of the CC commitments of various policies Technology, infrastructure Changes in land use Flexible resource management and efficiency Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

32 Role of RD (CAP) A flexible framework Axis 1 Farm modernization Restoring & prevention Farm advisory services Training Axis 2 Agri-env measures Payments linked to WFD Axis 3 Diversification into nonagricultural activities Leader Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

33 Natural resources dimension Technological dimension Climate change Climate policy index Vulnerability Impacts Social dimension Economic dimension # 5. Understanding how may policy modify climate risks Define strategic combination of the climate change commitments in the various policies Source: CIRCE Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

34 Climate policy index Algeria 0.31 Egypt 0.43 France 0.62 Israel 0.48 Italy 0.61 Libya 0.30 Morocco 0.40 Spain 0.55 Syria 0.49 Values range from 0 to 1 High values indicate that current policies decrease potential impacts (the system has increased adaptive capacity, is less vulnerable) Source: CIRCE Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

35 Agric output Climate impacts on agriculture with different policies HadCM3/HIRHAM B2 scenario for the period (% yield change respect to baseline) Adaptation Policy Env (1) Adaptation Farm (2) Adaptation Policy Econ /Rural Dev (3) Mediterranean Europe -50 to to 20 (1) Adaptation with emphasis on water resources protection and urban development (2) Farm adaptation without policy support (private) (3) Adaptation with emphasis with protection of agricultural production and rural development Soure: Iglesias et al 2007 Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

36 What is the best future we can hope for? Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

37 Thinking more about 1. Climate scenarios are not enough 2. Understanding of local vulnerabilities 3. Useful knowledge (involving practitioners, industry) 4. Moving towards a flexible, risk management 5. Understanding how policy modifies climate risks and opportunities Learning how to respond in the long term Learning how to avoid political crisis Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

38 Thanks for your attention! Ana Iglesias - Ecoagua, Zaragoza 24 Septiembre

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