Module 5: Sound ManageMent of energy for CSa Overview This section looks at the relationship between food and energy in a world where the climate is changing and competition for natural resources is increasing. This relationship is becoming stronger and more complex because the global agrifood system is almost entirely dependent upon fossil fuels and modern bioenergy is increasingly being looked to as an alternative to these fuels. Sound management of energy for and from the agrifood system could make a crucial contribution to making the transition to climate- smart agriculture and the achievement of food, climate and energy security. But this transformation can only happen if existing examples of energy-smart food systems can be scaled up significantly. Also required are adequate assessments of the effects of energy-based interventions in agrifood systems on sustainable development goals to guide decisions related to policy and practices. Key messages • In light of increasing and volatile fossil fuel prices, the dependence of agrifood systems on fossil fuels represents a major threat to food security and contributes significantly to climate change. The challenge of reducing this dependency on fossil fuels can be met by up-scaling of energy-smart food systems. These systems improve energy efficiency, increase the use and production of renewable energy, and broaden access to modern energy services in agrifood systems. • More energy is generally used in post-harvest stages of the food supply chain, whereas most green- house gas (GHG) emissions occur in the pre-harvest stages. Nevertheless, there is greater synergy between energy-smart and climate-smart agricultural practices than may appear at first. This syn- ergy can be created through resource-efficient farming practices that reduce pressures on land use change, lower emissions embedded in the production of agricultural inputs, lessen the reliance on fossil fuels and enhance the productivity and resilience of agro-ecosystems. • Each intervention requires careful analysis. This must be done using a lifecycle analysis, which includes the intervention’s indirect effects, to assess the synergies and trade-offs among the various sustainable development goals related to energy, climate, food security and water security. • In developing countries, increased access to modern energy services in agrifood systems is often re- quired to improve productivity and income, and advance economic and social development. However, an increase in energy consumption, even if based initially on fossil fuels, may result in lower abso- lute GHG emissions. For example, improved access and greater use of modern energy services may reduce deforestation as the demand for traditional wood fuels declines, or create new economic op- portunities that displace unsustainable high-emission activities that are profitable only in the short- term, such as logging and charcoal production, or agricultural expansion. Increased access to energy is likely to reduce emissions per unit of food production or per unit of gross domestic product (GDP). The effect of increased energy access on climate change mitigation should be assessed according to a county’s or community’s current stage of development and the development model that is being followed. It should not be assumed that there is always a trade-off to be made between energy access and climate change mitigation. MODULE 5: Sound Management of Energy for CSA Contents Overview 139 Key messages 139 5.1 Introduction – Energy and the agrifood system 143 5.2 Energy-smart food in the CSA context 145 CSA objective: sustainable increases in productivity and income 146 CSA objective: strengthened resilience to climate change and variability 148 CSA objective: contribution to climate change mitigation 150 Synergies and trade-offs between energy-smart food and climate-smart agriculture 153 5.3 Moving forward – possible energy solutions for CSA 156 Technologies for energy-smart food and CSA 157 Policies and institutions for energy-smart food and CSA 162 A multi-partner programme for scaling up energy-smart food 164 5.4 Conclusions 165 Notes 166 Acronyms 166 References 167 Additional Resources 169 List of Figures Figure 5.1 Energy FOR and FROM the Agrifood System 143 Figure 5.2 Indicative shares of final energy consumption for the food sector for high- and low-GDP countries 144 Figure 5.3 Shares of GHG emissions along the food supply chain with breakdown by energy consumption (by phase) and GHG emissions (by phase and by gas). 145 Figure 5.4 Cereals and vegetables yield increases in Bangladesh from 2000 to 2010 147 Figure 5.5 GHG emissions along the agri-food chain in the UK 151 Figure 5.6 GHG emissions along the agri-food chain in the US 151 Figure 5.7 An integrated approach to renewable energy for farming systems 157 Figure 5.8 Best and worst assumption of energy intensities in the post-harvest stage of the food chain 159 List of Tables Table 5.1 Examples of adaptation measures to reduce losses/risks in energy systems 149 Table 5.2 Examples of energy efficiency improvements through direct or indirect technical and social interventions along the food chain 152 Table 5.3 Examples of possible synergies and trade-offs between energy-smart food and CSA objectives 154 Table 5.4 Total energy inputs per crop per hectare for conventional agriculture and conservation agriculture for the complete microcatchment of Lajeado São José (Brazil) 159 Table 5.5 Examples of policy instruments to promote energy efficiency and renewable energy 163 List of Boxes Box 5.1 Low-cost machinery systems for small farms in Bangladesh 147 Box 5.2 Examples of the importance of energy-related GHGs beyond the farm gate in high GDP countries 151 Box 5.3 Can biofuels contribute to CSA? 153 Box 5.4 An integrated food-energy system in Colombia 161 Box 5.5 An agropphotovoltaic farm in Italy 162 Box 5.6 Bioenergy addressed through a cross-ministerial platform in Sierra Leone 164 141 MODULE 5: Sound Management of Energy for CSA 5.1 Introduction – Energy and the agrifood system Global primary energy demand will increase by a third between 2010 and 2035, and today’s developing coun- tries will account for the majority of this demand (IEA, 2011a). Fossil fuels are expected to continue to meet the bulk of the primary energy requirements. However, the use of renewable energy is increasing and will continue to do so in the future. Over the last decade, crude oil prices have fluctuated around a generally steadily increasing trend line, from US$ 28 per barrel to US$ 120. There was one dramatic price spike in 2008. Conversely, the costs of renewable energy have been declining recently. This trend will continue in the coming decades, and renewable energy will become more and more competitive. The gap between energy needs and access to energy is large, and demand will certainly increase as countries develop. The International Energy Agency (IEA) estimates that a fifth of the world’s population lacks access to electricity and that two-fifths rely on traditional biomass for cooking. The use of biomass for cooking is a severe cause of high indoor air pollution, which has harmful health effects for rural households, especially for women (IEA, 2011a). Increasing energy access is essential if the poverty reduction targets set out in the Millennium Development Goals (MDGs) are to be met. Agriculture and energy have always been closely interlinked. These linkages have changed and grown stronger over time. Agriculture, including forestry, has always been a traditional source of energy (through bioenergy), while fossil fuels have become a major input in modern agricultural production. The energy generated by the agrifood system can be partially used in the food supply chain or exported outside the system (e.g. through the sale of biogas produced on-farm to local households, or through the generation of electricity from residues to feed the national energy grid). These two-way linkages between energy and agriculture - the energy for and from the agrifood sector, are il- lustrated in Figure 5.1. Figure 5.1: Energy FOR and FROM the Agrifood System Energy outside ENERGY: Electricity; Mechanical Power; Solid; Liquid and Gaseous Fuels the agrifood system Y Energy G } R Crop E production N E Processing Distribution Preparation T Post-Harvest Retail Cooking FOOD C Storage E R Livestock Fish DI Production N I FOOD AND ENERGY LOSSES Source: Based on FAO’s current work being done through the Energy-Smart Food for People and Climate Programme (see FAO, 2011a and b), the food sector1 currently accounts for around 30 percent of the world’s total end-use energy consumption.2 More than 70 percent of that energy is used beyond the farm gate (Figure 5.2). Countries with a high GDP use a greater portion of this energy for processing and transport. In low-GDP countries, cooking consumes the highest share. 1 In this context, food sector concerns only those parts of “agriculture” in the broad FAO sense (i.e. agriculture, forestry and fisheries) that produce food, as well as the food processing, distribution, retail, preparation and cooking phases. 2 Energy includes direct energy used at the operational level primarily on farms and processing plants, for example for irrigation, land preparation and harvesting as well as indirect energy that is not directly consumed to operate farms, in fishing or processing plants but required to manufacture other inputs such as machinery, fertilizers and pesticides. 143 CLIMATE-SMART AGRICULTURE SOURCEBOOK Figure 5.2 Indicative shares of final energy consumption for the food sector for high- and low- GDP countries ~95 EJ/year ~50 EJ/year ~45 EJ/year 100% Retail, preparation and cooking 90% 80% Processing 70% and distribution 60% 50% Fisheries production 40% 30% Livestock production 20% 10% 0% Cropping production High-GDP Low-GDP Global countries countries On the input side, the linkages between energy and agrifood systems have strengthened as agriculture has become increasingly reliant on chemical fertilizers, irrigation and machinery. Post-harvest activities, such as food storage, processing and distribution, are also energy-intensive. Consequently, higher and volatile energy costs have a direct impact on agricultural production costs and food prices. Over the last decades, the in- creased use of energy by the agricultural sector has significantly contributed to feeding the world. Energy from fossil fuels has increased farm mechanization, boosted fertilizer production and improved food processing and transportation. Between 1900 (when energy inputs were limited to low-level fertilization and rudimentary mechanization) and 2000, the world’s cultivated area doubled, but the energy used in edible crops expanded six-fold. This greater productivity was made possible by an 85-fold increase in energy input per hectare (Smil, 2008). This transformation occurred in an area of cheap oil and where there were few concerns about climate change. However, since then times have changed. Prices for nitrogen fertilizers and other fossil fuel-dependent inputs are closely related to the price of crude oil. Rising and volatile oil prices translate into higher and fluctuating food production costs. Farmers, in partic- ular smallholder farmers, are the first to be affected. As a result, agrifood systems that are highly dependent upon fossil fuels pose serious challenges to development, and this could hamper food security in the future. Food losses occur at all stages of the supply chain. About one-third of food produced is lost or wasted (Gustavs- son et al., 2011). The energy embedded in global annual food losses is thought to be around 38 percent of the total final energy consumed by the whole food chain (FAO, 2011 a and b). As stated earlier, one of the greatest challenges the world now faces is to develop global food systems that can emit fewer GHG emissions, benefit from a secure energy supply, are be resilient to fluctuating energy prices, and continue to ensure food security and foster sustainable development. This calls for energy-smart food systems that: 144 MODULE 5: Sound Management of Energy for CSA 1. improve energy efficiency (measured in food output, preferably measured in nutritional units, per unit energy input) at all stages of the agrifood chain; 2. use diverse energy sources with an emphasis on renewable energy and contribute to renewable energy production through integrated food and renewable energy production; and 3. require improved access to modern energy services. Bioenergy has a special role to play in relation to food security. Although biomass is often used in unsustain- able ways, it is found almost everywhere and is currently, and for the foreseeable future, the most important source of renewable energy. It is used primarily for cooking and heating. In addition, agrifood systems not only use bioenergy, they also produce it. One instance is in integrated food-energy systems. However, putting bio- energy to use in an appropriate manner is more complex than with other types of renewable energy. If it is not well managed, bioenergy development may jeopardize food security and harm the environment. This is further discussed in Box 5.3. 5.2 Energy-smart food in the CSA context The energy sector, which produces nearly 60 percent of carbon dioxide (CO ) emissions, is the largest contribu- 2 tor to climate change (FAO, 2011a). The agrifood sector contributes over 20 percent of total GHG emissions, most of which originates from methane and nitrous oxide (see Figure 5.3). Globally, primary farm and fishery production3 accounts for around 20 percent of the total energy demand for food, but produces 67 percent of the GHGs (FAO, 2011 a). Figure 5.3 Shares of GHG emissions along the food supply chain with breakdown by energy consumption (by phase) and GHG emissions (by phase and by gas). ~95 ~9.7 ~50 ~3.3 ~45 ~6.4 EJ/year Gt CO /year EJ/year Gt CO /year EJ/year Gt CO /year 100% 2eq 2eq 2eq 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Global High-GDP countries Low-GDP countries Cropping Livestock Fisheries Processing Retail, preparation production production production and distribution and cooking Carbon dioxide Methane CH Nitrous Oxide N Source: FAO, 2011a 3 Primary production here includes cropping, pastoral and intensive livestock, aquaculture and fishing. 145 CLIMATE-SMART AGRICULTURE SOURCEBOOK It is important to point out that these facts and figures relate to the entire agrifood chain, from ‘farm’ to ‘fork’. They do not account for emissions related to land-use change, international trade (transport) or food waste despite the fact that GHG figures related to agriculture usually concern only behind-the-farm-gate activities (excluding fuel combustion and sewage waste) and often include land-use change impacts.4 In the following three sub-sections, we explore the potential for energy-smart agrifood systems to also be climate-smart and examine how it can fit with each dimension of CSA. CSa objective: sustainable increases in productivity and income Energy-smart strategies that cover the diverse range of food management options are complex and can in- volve making trade-offs. In this regard, some key points relating to primary production management practices should be emphasized. • Methods used to save on inputs that are fossil fuel-dependent but also lower productivity, such as cutting back rather than optimizing the amount of fertilizer applied, are rarely beneficial and should be avoided. • High-external input production systems do not necessarily have high energy intensities (megajoules per kilogram (MJ/kg) of product), especially when they lead to increased yields. Conversely, low-input systems can have relatively high-energy intensities when they produce lower yields. • In promoting energy-smart food, balance needs to be maintained between improving access to energy sources and increasing the efficiency of available energy, as well as increasing the proportion of renewable energy. This balance must be based on local conditions and the economic trade-offs between the different options. Box 5.1 illustrates these trade-offs made in the deployment of machinery systems for small farms in Bangladesh. 4 Often LULUCF (land use, land use change and forestry) assumed emissions due to agricultural expansion are lumped together with agriculture sector emissions. In national GHG inventories prepared for reporting under the United Nations Framework Convention on Climate Change (UNFCCC), important pre-farm gate sources of emissions such as fertilizer production (industrial processes and energy sectors), on-farm fuel combustion (energy sector) or sewage waste (waste sector) are not included. But if the whole agrifood chain is considered, other sources of emissions must be added, such as those mentioned above and also post-harvest stages of the agrifood chain, in particular agro-industrial operations, food distribution, storage and preparation and the food waste component of landfill. 146 MODULE 5: Sound Management of Energy for CSA Box 5.1 Low-cost machinery systems for small farms in Bangladesh The introduction in Bangladesh of small, mobile, diesel engines has increased food production (Steele, 2011). These demountable engines can be used for a range of applications, including powering small boats, tractors or trucks, generating electricity, and operating processing equipment and water pumps. Public policy changes enabled the import of innovative, Chinese-made, farm equipment. The diesel engines could be easily repaired by local mechanics and were less expensive than more sophisticated and more fuel-efficient machinery manufactured in India. The introduction of inexpensive Chinese technology led to the ‘agrotractorization’ of Bangladesh. The extent of mechanization in Bangladesh can also be measured as the level of energy input. The available power in agriculture over the period of 1960 to 2007 increased by almost 500 percent: from 0.24 kilowatt per hectare (kW/ha) in 1960, to 0.61 kW/ha at the end of the 1990s, to 1.17 kW/ha in 2007 (Islam and Shirazul, 2009). The available power gradually increased from 0.24 kW/ha in 1960, grew moderately until the 1980s and then rose sharply in the ‘90s, reaching 1.17 kW/ha in 2007. Most of the agricultural machinery used in the country is either imported or locally manufactured. Farm machinery, such as weeders, threshers, winnowers and centrifugal pumps are developed and manufactured locally with local materials (APCAEM-ESCAP, 2010). Figure 5.4 Cereals and vegetables yield increases in Bangladesh from 2000 to 2010 80000 70000 60000 a) 50000 H / g 40000 H d ( 30000 Vegetables Primary el Yi 20000 + (Total) 10000 Cereals, Total + (Total) 0 0 1 2 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 Source: FAOSTAT, 2012 In the early 1970s, when Bangladesh was characterised as a ‘basket case’ by some international development specialists, no one was forecasting that by 2010 the country would have one of the most mechanized agricultural economies in South Asia (Islam and Shirazul, 2009). Today 80 percent of primary tillage operations are mechanized. These operations are performed mainly by 300 000 small two-wheel tractors and a few (3 000) four-wheel tractors. There is a highly developed market for servicing tractors, pumpsets, threshers and other machinery derived from the use of small engines (Biggs and Justice, 2011). The figure above indicates that from 2000 to 2007 external energy subsidies in agriculture increased by 60-70 percent for cereals and vegetables (per kg of product). However, yields (per unit of cultivated area) also increased by 20-25 percent. This made mechanized agriculture more profitable and gave farmers more time for other activities. The Bangladesh private sector (as compared to the private sector in Nepal or India) focused on the imports of smaller-scale machinery. Presently, there are over one million small horsepower diesel irrigation pumpsets and nearly 400 000 diesel two-wheel tractors. In Bangladesh, the import value of soil machinery is consistently higher and continues to increase compared to the values of agricultural machinery and equipment such as harvesters and threshers, milking and dairy machinery and agricultural tractors. In 2007 Bangladesh started exporting some agricultural machinery, but most machinery is manufactured locally for local use. Seeing these results, Nepalese and Indian farm machinery manufacturers have recognized a new business opportunity. Small engines are now being sold mainly into low-cost, farm machinery markets in rural communities. Farm services have expanded as a result of the versatility and transportability of this equipment. 147 CLIMATE-SMART AGRICULTURE SOURCEBOOK It is essential to consider affordability and cultural issues when deploying new or improved energy technolo- gies. Domestic stoves account for a major part of energy consumption in the food chain, especially in develop- ing countries. The dissemination of improved designs of domestic stoves succeeds mainly when micro-finance is available for the necessary capital investments. Traditional biomass cooking stoves may be less energy- efficient, less healthy and more labour-intensive than solar or biogas designs, but they are often more af- fordable, which is a critical factor for impoverished rural communities (Geoghegan et al., 2008; UNDP, 2009). New stove designs also need to be culturally acceptable. Compared with open fires, the use of more efficient biomass cooking stoves can reduce by half the demand for traditional fuelwood (Chum et al., 2011). However, not all programmes to introduce these more efficient stoves have succeeded. This lack of success is often due to the informal nature of the fuelwood supply chain and a poor understanding of local cultures and their cook- ing habits. For example, users may prefer to cook with fuelwood during the cooler evenings rather than cook in the heat of the day with a solar oven. CSa objective: strengthened resilience to climate change and variability As a result of climate change, some farming practices may become less reliable as sources of income. For some farmers diversification to on-farm energy generation could be a coping strategy. With high and volatile fossil fuel prices, energy-smart food systems which improve access to modern energy services and increase energy diversity, contribute to energy security. This is not a climate change adaptation strategy, but it strength- ens resilience, which is the broader term used in the definition of CSA. Reliance on local energy sources does not automatically enhance resilience to climate change (see Table 5.1). Tapping into local energy sources can increase incomes and expand the diversity of energy sources. This increases resilience to climate change. The use of biogas cookstoves illustrates both types of adaptation. Biogas cookstoves and their liquid fertilizer by- product can help ensure self reliance in household energy and at the same time they can reduce the amount spent on woodfuel and chemical fertilizers, as well as make gathering firewood less time consuming. Although renewable energy plays a key role in future low-carbon plans aimed at limiting global warming, its dependence on climate conditions also makes it susceptible to climate change. This is also true for energy- smart food systems. For example, climate change will affect many aspects of renewable energy production, including: the cultivation of biofuel crops; water availability and seasonality for hydropower; atmospheric con- ditions for wind and solar energy; and variations in needs of energy for heating and cooling. As these impacts will increase significantly, the energy sector will have to adapt. The energy supply needs to be ‘climate-proofed’ as much as possible to ensure that energy use in the agrifood system can be climate-smart. Table 5.1 presents examples of adaptation measures to reduce climate change-related losses and risks in the energy sector. Several of these measures are similar to those promoted for climate change adaptation in agriculture and are relevant to CSA. Furthermore, while the table shows adaptation measures for individual energy classes, it should be noted that a diverse energy portfolio could be a way to reduce climate risk to energy supply. The World Bank’s Energy Sector Management Assistance Program (ESMAP) has developed a web tool called the Hands-on Energy Adaptation toolkit (HEAT) to assess the vulnerability of the energy sector to climate change and other factors (ESMAP, 2013). 148