12.2.4.3 Agriculture and forestry

Vast arrays of policies affect the emissions of the agriculture and forestry sectors, and the emissions or the sequestration rate from biomass and soils. An extensive list of non-climate policies that impact on CO₂, CH₄ and N₂O emissions from the agriculture sector are presented in Chapter 8 (Tables 8.10 and 8.11). The list includes sectoral policies designed to reach environmental goals other than climate change, such as biodiversity conservation or watershed protections; agricultural policies designed to reach non-environmental goals, such as increasing exports of agricultural products or securing farmers’ income; and non-agricultural policies with impact on the agriculture sector, such as energy price reforms. For example, the 2003 EU Common Agricultural Policies reform, by decoupling subsidies from production targets, is likely to lead to reduced on-farm CO₂ and N₂O emissions (see Table 8.10). In fact, changes in the Common Agricultural Policy from 1997 to 2001 (in intervention prices, in per-hectare support to grains and oilseeds, as in milk quotas and livestock subsidies) are estimated to have resulted in a 4% decline of agricultural sector emissions in Europe over that period (De Cara et al., 2005).

If the direct emissions of the forestry sector are small, the emissions/uptake related to land conversion from/to forests are extremely large (see Chapter 9). In addition, emissions/uptake related to changes in the quality of existing forests, to the use of forest products in carbon stocks, and to bioenergy are very large. Policies affecting land use and land-use change, policies affecting the substitution between wood-based and other products, and policies related to bioenergy are thus likely to have strong implications for the net emissions from forests and forest products.

The causes of deforestation have been studied specifically. They differ from regions to regions and depend on the interaction of cultural, demographic, economic, technological, political and institutional issues (e.g., Angelsen and Kaimowitz, 1999; Geist and Lambim, 2002). In all cases, the drivers of deforestation are strongly affected by policy decisions. For example, rural road construction or improvement tend to encourage future deforestation (Chomitz and Gray, 1996; Chomitz, 2007), yet may have positive economic implications by providing better access to markets and basic services for remote population in developing countries (Jacoby, 2000). Similarly, agriculture intensification policies have potentially important but ambiguous effects on deforestation. On the one hand, intensification increases the productivity of existing agricultural land and lowers the pressure on forests. On the other, it could also trigger migration and it might, in fact, increase deforestation. Careful design of agriculture intensification policies is thus necessary to avoid unintended outcome on deforestation (Angelsen and Kaimowitz, 2001).

A third example concerns a macro-economic policy decision: the devaluation of Brazil currency in 1999, which fell by 50% against the US dollar. Coupled with an increase of soybean prices on the international market, increased the value of soybean and beef production in the country - notably in the state of Mato Grosso – triggered massive increase in production and massive deforestation of cerrado forests. In fact, a third of total deforestation in the Brazilian Amazon between 1999 and 2003 occurred in Mato Grosso (Chomitz, 2007).