Economic analysis of GHG emission reduction options for rice cultivation: A case study in Nam

Dinh province, Vietnam.

Nguyen Thu Thuy-201326029 Supervisor: Professor Masuda Misa

1

University of Tsukuba Graduate School of Life and Environment Sciences

15 DECEMBER, 2014

CONTENTS 1. Background 2. Research Objective and study area 3. Methodology 4. Preliminary result 5. Primary conclusion and discussion 6. Future study

GHGs budget of rice field

1. Background

Source: Wassman, IRRI, 2010 Source: FAOSTAT,2012

0

20000

40000

60000

80000

100000

120000

Gig

agra

ms

Emission (CO2eq) (Rice Cultivation)

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Gig

agra

ms

Emission (CO2eq) ( Burning rice residue)

Top 10 emitters

Emissions from agriculture comprise 43.1 % of Vietnam’s total carbon emissions, of which rice cultivation comprises of 50% of the share. (MONRE, VSNC, 2010)

Government of Vietnam (GVN)’s Green Growth Strategy aims to reduce carbon emissions while achieving growth objectives

Ministry of Agriculture’s 20-20-20 strategy aims to reduce carbon emissions from agriculture sector by 20 percent, while reducing poverty by 20 percent and increasing agricultural gross domestic product (GDP) by 20 percent.

1. Background

GHG emission projection

GHG emission in 2000

Q2: How to reduce emission from rice cultivation?

Q1: How to solve agricultural residue burnt?

7 million ha

80 million tons of agricultural residue Source: IAE

Reuse agricultural residue; using alternative fertilizers and alternative irrigation method

A huge amount of carbon emission

1. Background

Source: Wassman,IRRI

Achieving low emission grow for rice cultivation in Vietnam

2. OBJECTIVE Assessing environmental consequences of traditional

rice farming practices in term of GHG emission. Evaluating the cost-effectiveness and adoption of

selected GHG reduction options for rice cultivation.

Find out the most climate-smart agriculture system + Improve rice production + Reduce GHG emission

6

The use of alternative organic fertilizer ( biochar and compost) The application of Alternative Wetting and Drying (AWD)

Improve soil fertility

(Chidumayo,1994)

GHGs

emission Reduction 12-

84% ( Johnanes Lehmann,

2007)

Carbon sequestration

( Johnanes Lehmann,

2006)

7

Mitigation option 1: Using Biochar

Picture are taken by IAE, Vietnam)

Mitigation option 2: Using Compost

8

Avoid high emission from burning residue

Soil fertility improvement

Creates biologically healthy soils

Source: IAE

Option 3: Alternative Wet and Dry (AWD) irrigation method

9

Shifting from flood irrigation to AWD irrigation soil turns from anaerobic

condition to aerobic condition

Saving water

Reducing GHGs emission Picture are taken by IAE,

Vietnam)

Study site Nam Dinh province

Thinh Long: 40 households Rang Dong: 40 households

Pilot study

•Population: 0.5 million •Avarage temperature: 24o C •Natural land: 1,652 km2 -28 coastal communces with 12,000ha rice cultivation; 5000ha affected heavily by sanlinity

3. METHODOLOGY 1. Data collection Field data collection by conducting survey + Household survey: randomly 80 households (Acreage under

di�erent management systems Adoption details of abatement options rice variety, fertilizer management at various stage, water application, etc. Cost of production and Revenue

Second data collection 2. Apply GIS and Remote Sensing build soil, land use and rice

distribution map 3. Apply De Nitrification- De Composition (DNDC) model

calculate GHGs emission. 4. Apply Cost- Benefit (CBA) and Marginal Abatement Cost

Curve to evaluate economic value

11

Irrigation Manure Fertilizers Manage

CROPS DNDC 2014,2020,2030

(MONRE)

Climate daily record

CH4, N2 O

Soil properties Rice field map

Calibrate model by GHG sampling data from IAE

4. Preliminary result

Ord, Activities Date

Biochar application Composting application

AWD application

Convention application

1 Cultivation:

- Tillage: 13 Jan Plow depth of 30-60mm

Plow depth of 30-60mm

Plow depth of 30-60mm

Plow depth of 30-60mm

- Sowing: 21 Jan

- Transplanting: 17 Feb

-Harvest planning: 15 June

2 Fertilizers:

- Base dressing: N, P, K fertilizers, biochar, composting

16-Feb 6.6 ton biochar / ha; 90kg P2O5; 30kg

Urea;

11.3 ton compost /ha; 90kg P2O5; 30kg Urea;

10 ton manure/ha ; 90kg P2O5; 30kg Urea;

10 ton manure/ha 90kg P2O5; 30kg

Urea;

1st dressing fertilizer 1-March 50 kg Urea; 30 kg K2O;

50 kg Urea; 30 kg K2O;

50 kg Urea; 30 kg K2O;

50 kg Urea; 30 kg K2O;

2 nd dressing fertilizer in flowering period

19-March 20 kg Urea, 30 kg K2O

20 kg Urea, 30 kg K2O

20 kg Urea, 30 kg K2O

20 kg Urea, 30 kg K2O

3 Flooding Continuously , water depth of 5-10cm

Continuously , water depth of 5-

10cm

AWD irrigation Continuously , water depth of 5-

10cm 13

Farming Management information

Items Thinh Long

Rang Dong

Average Mean age (years) 38.93

40.3

39.6

Schooling (years) 7.93

9.03

8.48

Experience in rice farming (years) 25.33

17.78

21.55

Household size 4.75

4.94

4.88

Number of labor per household 2.30

2.48

2.39

Per capita cultivated land (ha) 0.27

0.31

0.29

Farm size /household(ha) 1.23

1.20

1.21

Social characteristics n1=80

Education level quite high High experience year involve farming activities

Occupation and income proportion

15 Main occupation: agriculture Lower income

19.2 27.3

5.43

48.07

0

20

40

60

80

100

120

Agriculture Livestock Service Other

OccupationproportionIncome propotion

16

3.3 10.0

36.7

18.3 13.3 13.3

23.3

35.0 36.7

63.3

46.7

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Multipurpose rice residue use

Rate of rice residue use (%)

Perc

enta

ge

Proportion of crop residue use in surveyed sites Total count: 240

Perception of farmers about the options

17

2% 7%

20%

43%

28%

Farmer perception on biochar quality

Unknown

Lower than existfertilizerEqual to exist fertilizer

Higher than existfertilizer

3% 10%

25%

40%

22%

Farmer perception on compost quality

Unknown

Lower than existfertilizer

Equal to exist fertilizer

Higher than existfertilizer

Unclear

•More people believed the quality of alternative fertilizers. •Find difficulty in applying AWD low adoption

N=80

4%

40%

30%

15%

11%

Famer perception about applying AWD irrigation

Unknown

Too complicated

Complicated

Not complicated

Simple

A significant adoption

Initially GHGs emission from different farming techniques

Option CO2 eq

emission (ton/ha)

% Reduction

Traditional farming (TRA)

27.6

Biochar application (BC)

11.2 59.42

Compost application (COM)

19.8 28.26

Applying AWD irrigation (AWD)

12.8 53.28

18

GHGs emission BC<AWD<COM<TRA

0

5

10

15

20

25

30

Traditionalfarming

Biocharapplication

Compostapplication

Applying AWDirrigation

ton

CO

2e/h

a

GHG emission from different farming techniques

GHGemission/year

Estimate benefit carbon exchange

19

From RICE CULTIVATION with the option

From avoid rice residue

burning

Total CO2e saving

Assume 63.3% rice residue will be burnt if not use for biochar and compost making.

30.07

20.14

14.60

0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00

Biochar application

Compost application

Applying AWD irrigation

Total CO2e saving (ton/ha/year)

High abatement potential in saving CO2 eq

CBA and MACC result

Information collection

Abatement rate (AR), tCO2y-1ha-1

Scale measure (hectare, ,..)

Abatement potentials (AP), total Gg CO2e

Recalculate cost effectives (CE) and

abatement potential (AP)

Identified quantity cost, benefit, discount rate(%)

Calculate benefits, costs and NPV, FPV)

Calculate cost effectiveness (CE)

Calculate (CE) and (AP) for different

potential GHG mitigation

Compare and select

preferred option having high CE and

AP

+

−+

−= ∑ ∑= =

n

t

n

tt

tt

t

rC

rBICE

1 10 )1()1(

Variable and capital cost, outputs

Environmental and social

factors

Negative CE was considered as win-win decision Positive CE was considered expensive options

NPV result from CBA analysis

2100.00

2200.00

2300.00

2400.00

2500.00

2600.00

2700.00

2800.00

Biochar Compost AWD

US(

$)

Net Benefit from mitigation options

NPV (USD)

Biochar has the biggest net benefit

MACC analysis

-150.00

-100.00

-50.00

0.00

50.00

100.00

150.00

200.00

Biocharapplication

Compost application

AWDapplication

Single cost effectiveness (CE) and potential GHG reduction in comparison

CE/tCO2eq saving(USD)Abatement potential(tCO2 eq saving/ha)

AWD with high intensive irrigation application and high investment for drainage system AWD is expensive option

MACC analysis

-150.00

-100.00

-50.00

0.00

50.00

100.00

150.00

200.00

USD

($)

Margin Abatement Cost Curve for three options

Sell in any shadow price

30.07 Biochar 20.14

COM

AWD

14.6

Saving tCO2eq CE range from -110.12 to -86.35 per tonCO2eq saving win-win range of policy-making The best mitigation option in term of cost effectiveness is composting, however biochar option illustrated both high NPV and high cost effectiveness

The government win GHG reduction, fammers obtain income

With positive CE no motivation in GHG reduction

5. Primary discussion and conclusion Discussion Some limitations in CBA analysis + do not include investment of irrigation system and agricultural infrastructure in

costs assessment + non-consumed agricultural production such as crop residues, by-products can be

sold and earned benefit in abroad countries but it is very limited in Vietnam + economic return of these options (from environmental value) was not estimated to

calculate CE Big potential GHG mitigation but weak carbon exchange Conclusion Biochar has the lowest carbon emission per hectare , high cost effectiveness and

high net benefit for famers, a significant adoption an abatement option for rice cultivation.

AWD implies a higher net cost for farmers because of higher direct costs that do not make up any potential yield increases farmers face constraints in adopting it

–fewer farmers know about it, and those who know do not practice it accurately

6. Future work

Estimate marginal abatement cost curves and CBAfor potential mitigation options for rice in 2020, 2030

Calibrate model and interpretation of data and result

Give conclusion and policy recommendation

Continue writing thesis

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MARD. 2011. Decision No 3119/BNN-KHCN on 16/12/2011 on approving national program of GHG eission reduction in the agircultural and rural development (in Vietnamese). Hanoi, Vietnam : Ministry of Agriculture and Rural Development (MARD), 2011.

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