GREEN GROWTH INDICATORS: HOW DOES CANADIAN AGRICULTURE STACK UP AGAINST OTHER OECD COUNTRIES
Dimitris DiakosavvasTrade and Agriculture Directorate
CAPI Workshop on Optimizing Land Use for Sustainable Growth: A CAPI Dialogue, 21-22 February 2019, Calgary, Alberta, Canada
Outline of presentation
• Background
What is green growth and what does it imply in addressing the challenges facing agriculture?
Policy and monitoring progress challenges
• Monitoring progress towards green growth in agriculture
The OECD Green Growth Measurement Framework
How does it apply to agriculture?
What does the empirical evidence show?
• Key lessons – What work OECD is doing?
What is green growth and what
does it imply in addressing the
challenges facing agriculture?
Green growth is the pursuit of economic growthand development, while preventingenvironmental degradation, biodiversity loss andun-sustainable natural resource use. To do this itmust catalyse investment and innovation whichwill underpin sustained growth and give rise tonew economic opportunities
What is green growth?
The Green Growth Agenda:Key characteristics
• No necessary conflict between growth and
environment in the long run
• Tool to achieve sustainable development
• Focus on fostering innovation, investment and
competition that can give rise to new sources of
economic growth
• Coherence of policies
Green growth is widespread as a goal…
• OECD – Green Growth Strategy
• UNEP – Green to Grow, focusing on a low carbon future
• FAO – Greening the Economy through Agriculture,focusing on food security
• World Bank – Moving to a Green Growth Approach toDevelopment, focusing on poorer countries
• Many countries have embraced green growth (Korea,Denmark, etc.)
• Many companies are also developing green growthstrategies
Green Growth in agriculture means ….
• providing enough food, feed, fibre and fuel for a growingpopulation…
• …with greater pressure on land, water, energy andbiodiversity resources - and the impact of climate change…
• …and the need to limit the harmful and enhance thebeneficial environmental impacts and reduce waste in thefood supply chain
So productivity has to rise faster than population and income,while reducing environmental footprints – “sustainableintensification”…
… Increasing productivity in a sustainable manner – from R&D,innovation, to uptake all along the food supply chain, whileaddressing social concerns.
The policy challenge …
Policies that mutually reinforce green and growth –• Increasing productivity in a sustainable manner
Investing in knowledge generation - R&D, innovation Investing in knowledge creation - training, advisory Investing in knowledge transfer - extension services Investment and trade
Policies specifically aimed at greening growth• Market-based instrumentsAgri-environmental payments, environmental taxes, etc.
• Non-market instrumentsRegulation, voluntary agreements, technical assistance
But a lot of green is not priced..
The monitoring progress challenge
• If governments are going to pursue policiesdesigned to promote green growth, theyneed indicators that can:
raise awareness
measure progress
identify potential opportunities and risks
You can’t manage what you don’t measure
Monitoring Progress Towards
Green Growth in Agriculture
OECD Green Growth Measurement Framework - Four dimensions
• Is growth becoming greener? Low-carbon, resource-efficient economy: Indicators of environmental and resource
productivity
• Is there a risk of future shock to Growth? Rising productivity is not enough: often, an
absolute decline in environmental pressuresis needed to keep the natural asset baseintact
OECD Green Growth Measurement Framework - Four dimensions
• How the environment affects people? Capturing the direct interaction between
people and the environment: indicators ofenvironmental quality of life
• How “green” helps growth and employment? Economic opportunities from environmental
considerations and policy responses.
The monitoring progress challenge:four dimensions
Guiding criteria for the selection of green growth indicators for agriculture
• Capture the nexus between the environmentand the economy
• Be measured and comparable across countries
• Reflect key global environmental issues
• Ease of communication
• Alignment with the OECD framework
• Use existing data
Environmental and resource productivity:What does the empirical evidence show?
16
Nitrogen balance per hectare, 2013-15
0
50
100
150
200
250
kg/h
a
Nutrient surpluses declined relative to agricultural production ……
2003-15 % changes
AUS
AUT
BEL
CAN
CZE
DEN
EST
FIN
FRA
GER
GRC
HUN
ISL
IRL
ISRITA JPN KOR
LVA
LUX
MEX
NLD
NZL
NORPOLPOR
SVK
SLV
SPA
SWE
CHE
TUR
GBRUSA
OECD
EU
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
-0.2 -0.1 0.0 0.1 0.2 0.3 0.4 0.5
N b
alan
ce/h
a (%
)
Agric. production growth (%)
Nitrogen
RELATIVE DECOUPLING
ABSOLUTE
DECOUPLING
AUS
AUT
BEL
CAN
DNKFIN
FRA
GER
GRC
ISL
IRL
ISRJPN KOR
LUX
MEX
NLD
NZL
NOR
POLPOR
SLV
SPACHE
TUR
GBRUSA
OECD
EU
-30
-25
-20
-15
-10
-5
0
5
-0.2 -0.1 0.0 0.1 0.2 0.3 0.4
Ph
osp
ho
rus
bal
ance
/ha
(%)
Agric. production growth (%)
Phosphorus
ABSOLUTE
DECOUPLING
But in Canada nutrient surpluses increased relative to agricultural land
0
20
40
60
80
100
120
1990 1995 2000 2005 2010 2015
Nitrogen balance
Canada OECD
kg/ha of agricultural land
-2
0
2
4
6
8
10
12
14
16
18
1990 1995 2000 2005 2010 2015
Phosphorus balance
Canada OECD
kg/ha of agricultural land
19
Evolution of livestock composition and crop mix
0
0.05
0.1
0.15
0.2
0.25
0.3
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Cattle heads/Total livestock heads Oil crops/Total harvested crops
Pesticide sales per unit of land much lower than the OECD average
0.002
0.1
0.6
0.7
0.7
0.8
0.8
0.9
1.0
1.0
1.0
1.1
1.1
1.1
1.2
1.2
1.2
1.5
1.5
1.6
1.6
1.7
2.2
2.3
2.7
2.7
3.0
3.1
3.2
4.8
4.9
5.8
10.9
11.8
20.6
0 5 10 15 20 25
Iceland
Australia
Estonia
Ireland
Latvia
Sweden
Norway
Lithuania
United States
Mexico
Turkey
Slovak Republic
Greece
Switzerland
United Kingdom
Austria
Canada
Finland
Denmark
Poland
Hungary
Czech Republic
Slovenia
France
Chile
Germany
OECD
Spain
Portugal
Italy
Belgium
Netherlands
Korea
Japan
Israel
Average annual pesticide sales per ha (2011-15)
21
Share of agricultural GHG emissions in total 2013-15
0
5
10
15
20
25
30
35
40
45
50
(%)
22
Progress with decoupling GHG emissions from production growth in several countries
AUS
AUT
BEL
CANCHI
CZE
DEN
FIN
FRA
GER
GRE
HUN
ISL
IRL
ISR
ITA
JPN
KOR
LAV
LIT
LUX MEX
NLD
NZLNOR
POL
POR
SLK
SLV
ESP
SWE
CHE
TUR
UK
USA
EU15
OECD
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
-0.2 -0.1 0.0 0.1 0.2 0.3 0.4
Car
bo
n p
rod
uct
ivit
y gr
ow
th in
agr
icu
ltu
re (
%)
Agricultural production growth (%)
2003-15
Relative decoupling
Absolute decoupling
No decoupling
Progress with decoupling GHG emissions from agricultural production
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0
10000
20000
30000
40000
50000
60000
70000
1990 1995 2000 2005 2010 2015
Canada agricultural GHGs emissions Canada GHGs emissions intensity OECD GHGs emissions intensity
1000 tonnes of CO2 kg of CO2 eq./USD
On-farm energy use comparable to OECD average, but is increasing…
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
(%)
Share of agriculture in total energy (%)
1995 2016
Energy productivity is declining…
0
50
100
150
200
250
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
(19
90
=10
0)
Energy Production Productivity
26
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
%
2001-15 1991-2000
TFP growth in primary agriculture is comparable with OECD, but slowed down
Natural asset base:What does the empirical evidence show?
Land use change
-0.8
-0.7
-0.6
-0.5
-0.4
-0.3
-0.2
-0.1
0
Canada OECD
%
Average annual % change 2005 to 2015
Total agricultural land Cropland Pasture
Farmland bird populations continue declining
-4
-3
-2
-1
0
1
2
1992-94 to 2002-04 2002-04 to 2012-14
Average annual % change in farmland bird index (2000=100)
Economic opportunities and policy responses:What does the empirical evidence show?
Evolution of agricultural policies in OECD countries
• Agricultural policy reform in OECD countries has been progressing slowly – but it is still a protected sector
• Some reduction in support and shift towards public goods (e.g. environment) and other objectives (e.g. rural development)
• Less emphasis on which commodities farmers can produce, but more restrictions on how they produce them
32
Producer support is half than the OECD average …
33
But potentially most distorting support is similar to the OECD average
(% Share in producer support, 2015-17)
0
10
20
30
40
50
60
70
%
Potentially most distorting support 1 Other support
34
Producer support is without environmental constraints, 2015-17 (%)
0%
5%
10%
15%
20%
25%
35
Potentially environmentally harmful agricultural support decreased in OECD area
0
50000
100000
150000
200000
250000
300000
1990 1995 2000 2005 2010 2015
USD mnMost harmful Least harmful Other
Potentially most environmentally harmful support
05
10152025303540
(%)
1995-97 2015-17
36
High share of Government expenditures on AIS in total support to agriculture
Public agricultural R&D intensity is the 6th
largest
37
Source: OECD R&D statistics and ASTI database.
Budget allocations for agricultural sciences R&D as a percentage of agricultural
value-added
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5%
2016* 1996*
Agri-food research co-operation outputs close to OECD average
38Source: ECD patent statistics and Scimago.
Key lessons –
what work OECD is doing?
• Canada has made progress towards green growth inagriculture, but there is a need for further progress:
Nutrient balances
GHG emissions
Energy productivity
Total factor productivity
• Evidence is partial:
Gaps in data availability and quality
Conceptual and methodological challenges
Empirical evidence often confusing
Key lessons
• Country reviews on innovation, productivity andsustainability
• Agri-environmental indicators
• Environmental impacts of agricultural policies
• OECD co-ordinated Network on Total FactorProductivity and the Environment
4-5 April 2019
30-31 October 2019
What OECD is doing?
Green Growth framework
• Balanced tax structures
• R&D and innovation policy
• Competition
• Infrastructure investment
• Openness to trade and FDI
Enabling conditions
•Pricing of pollution and resource use
• Subsidy reform
•Regulatory and policy predictability
• Support to basic research and emerging technologies
•Governance of natural assets
Key policy tools
• Water scarcity
• Climate change
• Health impacts of pollution
• Biodiversity loss
Major environmental issues
• Skills and labour market adjustment
•Distributional and competitiveness concerns
• Science and technology cooperation
•Development assistance
•Management of global public goods
Promoting transition
•Productivity of resource use
•Physical evolution of the natural asset base
•Environmental quality of life
•Opportunities arising from environmental considerations
•Evolution of policy and social responses
•Promoting efforts consistent with international standards
Measurement agenda
Framework for green growth indicators
Natural asset base
Economic activities
Consumption
Households
Governments
Investments
Energy & raw materialswater, land, biomass, air
Pollutants waste
Policies,
measures,
opportunities
4Outputs
Income
Goods& services
Residuals
Inputs
Labour
Capital
Resources
2
13
Resource functions Sink functions
Amenities, health & safety aspects
Production
Multi-factor productivity
Indicators monitoring environmental and resource productivity
Indicators monitoring the natural asset base
Indicators monitoring the environmental quality of life
Indicators monitoring economic opportunities and policy responses
The socio-economic context and characteristics of growth
4
3
2
1
For executive summary
Service functions
45
Agri-environmental progress
-12
-10
-8
-6
-4
-2
0
2
4
6
Nitrogen balance Phosphorus balance Direct on-farm energy consumption Water use Greenhouse gas emissions
%
Average annual change (2003-05 to 2013-15)
Canada OECD
46
Beef: Limited progress with decoupling GHG emissions from production
50
70
90
110
130
150
170
190
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
(19
90
=10
0)
Emissions intensity Emissions (CO2eq) Production
47
Pigmeat: Progress with decoupling GHG emissions from production
50
70
90
110
130
150
170
190
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
(19
90
=10
0)
Emissions intensity Emissions (CO2eq) Production
48
Livestock accounts for more than half of GHG emissions (2016)
Cultivation of Organic Soils
10%
Enteric fermentation
32%
Synthetic fertilisers23%
Manure management
12%
Manure left on pasture
10%
Manure applied to soils3% Crop residues
8%
Burning - Crop residues
1%
Burning - Savanna1%
Source: FAOSTAT