Economics of Adaptation in Agriculture

Opportunities for Impact Evaluation in NAP Process

Ali Akram FAO, Impact Evaluation Expert

Yale University

Structure• Context• Estimating climate change impacts on agriculture (Ricardian

technique)• Estimating impacts of adaptations (experimental and quasi-

experimental techniques)• Institutional arrangements• Mapping to NAP elements

Context• Country governments engaging in NAP process

• Complex task – many elements

• Multiple resources and tools are needed

• Impact Evaluation (IE) one such tool

• Provides two complementary inputs for NAP process:• What is impact of climate change?• What is impact of adaptations?

IE for Climate Change Impacts• Called the Ricardian technique

• First used for agriculture in the United States

• Method can be feasibly deployed in multiple contexts

• Applied to agriculture in Africa and Latin America

IE for Climate Change Impacts• Farmers experience large range of climates

• Relating farmer profit to climate quantifies climate change impacts

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Farmer Profit Climate

IE for Climate Change Impacts• Existing variation in climate tells us what farmers will do as climate

changes

• Help us quantify damage from climate change

• Add-on: Provides insights on possible adaptations

• Rationalize adaptation spending• Knowing damages justifies spending on adaptation

IE for Adaptations• Policymakers must rationally choose adaptations

• Turn to experimental and quasi-experimental techniques (choice depends on circumstance)

• Rationale: understand if given adaptation choice has intended impact

IE for Adaptations• Always think of ideal scientific experiment

• Control group; treatment group

• For adaptations – subjects must be randomly assigned

• Lottery assignment ensures validity of evaluation

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IE for Adaptations

CONTROL

TREATMENT ADAPTATION

IE for Adaptations• When randomization not feasible, turn to quasi-experimental

methods• Not feasible due to constraints – political, institutional, design

(timing)

• Array of techniques• Difference-in-Difference• Regression Discontinuity Design• Matching• Instrumental Variables

Institutional Arrangements• Three roles

• Implementation• Data Collection• Design and Analysis

Implementation Data Collection

Analysis

Design

Institutional Arrangements• Capacity

• Trained economists• In-house capability might exist• Partnership (e.g. researchers)

• Timing• Design: Researcher input before implementation• Obtaining results: could take some years

IE and the NAP Process• IE (both techniques) help with key NAP elements

NAP Element Impact Assessment Tool(s) Connection Element B Preparatory Elements: Assessing climate vulnerabilities and identifying adaptation options at the sector, subnational, national and other appropriate levels.

Ricardian The Ricardian technique can be used to understand climate change impacts, quantifying the vulnerability of agriculture to climate change. The same can also be used to assess climate adaptations that are already being undertaken to help identify options for adaptation.

Element B Preparatory Elements: Reviewing and appraising adaptation options.

Experimental and Quasi-experimental

Experimental and quasi-experimental techniques can be used to assess adaptation options in a rigorous evidence-based manner.

Element C Implementation Strategies: Prioritizing climate change adaptation in national planning.

Ricardian Experimental and Quasi-

experimental

As before, the Ricardian technique can help identify possible adaptations based on what is already taking place in agriculture. Then, evidence generated from experimental and quasi-experimental methods can help to select the adaptations that are effective.

Element D Reporting Monitoring and Review: Reviewing the NAP process to assess progress, effectiveness and gaps; Iteratively updating the national adaptation plans.

Experimental and Quasi-experimental

Evidence generated from experimental and quasi-experimental techniques helps with these – as a continuous process of testing and deploying new adaptation programs, and rejecting those options that do not work.

Conclusion• Impact Evaluation – broad set of tools• Two areas where immediately applicable:

• Understanding climate change impacts on agriculture sector

• Understanding impact of adaptations in agriculture• Technical resource persons are needed• IE tools allow multiple parts of NAP process to be

addressed

Conclusion

• Next steps include:

• Identifying opportunities for using IE methods

• Providing training to countries on specific methods