Welfare and mitigation costs

Analysing the shifts in production patterns caused by the adaptations in the ENER_

SIM10 scenario and the associated shifts in supply and import balance described above, changes in welfare can be observed. Tab. 48 gives an overview of the relevant shifts. A sig-nificant decrease in budgetary expenditure (minus €689 M) can be shown to occur, owing to additional tariff revenues resulting from additional imports, mainly of meat and vege-tables/permanent crops, as shown in Tab. 44.

Consumer surplus is decreasing significantly (minus €17 billion), mainly because of rising market prices for meat products. By contrast, agricultural income is increasing (plus

Tab. 48. Shifts in welfare in the ENER_SIM10 scenario

Reference ENER_SIM10EF

(in € M) (Changes in € M)

Budgetary expenditure 32 918 32 229

–689

Tariff revenues 11 311 11 999

688

FEOGA budget outlays, first pillar 44 229 44 228

–1

Money metric* 8 710 791 8 693 328

–17 464

Output revenues 366 874 380 314

13 440

Input costs 218 840 218 980

140

Premiums 40 270 40 378

108

Agricultural income 188 304 201 712

13 408

TOTAL WELFARE 8 866 177 8 862 810

–3 367

*Includes changes in the processing industry and displays consumer surplus.

Source: own calculations. Year: 2013.

€13 billion). Here, the decrease in production quantity is offset by the increase in market pri ces. As shown in Tab. 43, this price effect exceeds the quantity effect. Consistent with this, output revenues are increasing, which can be shown in the rising agricultural income.

A €3.4 billion reduction in total welfare may be observed in the overall result, which in over all terms constitutes a negligible shift of minus 0.04 per cent. Nevertheless, this

€3.4 billion decrease is significantly greater than the shifts in existing policy schemes such as the abolition of the set-aside obligation or the decoupling of the suckler-cow premium.

Emission-mitigation costs can be compiled by considering the shifts in energy-related emissions. The results are shown in Tab. 49. On the one hand, energy-related emissions are reduced by 32,306 tonnes of CO₂ (i.e. by 9.3 per cent). On the other hand, welfare is reduced by the aforementioned €3.4 billion. Emission-mitigation costs of €104 per tonne of CO₂ can be assumed for the ENER_SIM10 scenario.

Tab. 49. Emission mitigation costs in the ENER_SIM10 scenario

European Union 25 Reference ENER_SIM10EF

Domestic emissions (in 1000s of t CO₂):

absolute difference

348 810 316 504

–32 306 Total Welfare (in € M): absolute

difference

8 866 177 8 862 810

–3367

Mitigation costs (€/t CO₂) – 104.21

Source: own calculations. Year: 2013.

6.2.4 Cross-effects: nitrate losses and landscape indicators

The shifts in the domestic production pattern described above produce shifts in the cross-effects of agricultural production. Firstly, changes in nitrate surplus are modelled in order to give an idea of nitrate losses. Tab. 50 shows the relevant data on the different EU levels. In general terms, nitrate surplus is decreasing on the EU-25 level (minus 3.6 per cent) as well as for the sub-units EU-15 (minus 3.3 per cent) and EU-10 (minus 5.6 per cent). This decrease is in line with lower domestic production of arable crops and livestock.

Tab. 50. Shifts in nitrate surplus in the ENER_SIM10 scenario

Region Nitrate surplus

Reference (RS)

(in 1000s of t) ENER_SIM10EF (%) Change to RS

European Union 25 10 136 –3.6

European Union 15 8925 –3.3

European Union 10 1211 –5.6

Source: own calculations. Year: 2013

A closer analysis of the results requires a country-specific compilation⁴⁵ as well as a look at the sources of the surplus. Firstly, there are the countries reducing nitrate surplus to an above-average extent compared to their respective EU sub-units, such as Spain, Greece, Ireland, the UK, the Czech Republic, Lithuania, Poland and Slovenia.

Secondly, a number of countries are reducing their nitrate surplus relatively sharply in comparison with their relevant energy-use reductions, such as Belgium, Greece, Ireland, the UK and Slovenia. Others, such as the Netherlands, France, Spain, Italy and Latvia, are re ducing their nitrate surplus to a fairly small extent in comparison with their energy-use re ductions, or are even increasing their nitrate surplus (as in the case of Sweden and Estonia).

45 The country-specific data for nitrate surplus are shown in Appendix 21.

In the case of Spain and Greece, imports of inorganic fertiliser into the sector are decrea-sing sharply (minus 7.2 per cent for both countries), leading to a reduction in ammonia losses from inorganic fertiliser. For Ireland and Slovenia, shifts in animal production result in a significant reduction in losses linked to organic-fertiliser application (e.g. ammonia losses from manure on pastures or in animal housing, or from manure storage or applica-tion). The effect of these shifts is minus 6 per cent for Ireland and minus 8.9 per cent for Slovenia. In the case of the UK, a mixture of shifts in plant production and in animal num-bers results in a 7.3 per cent reduction in inorganic fertiliser imports (and consequently, a decrease in ammonia losses from inorganic fertiliser) and a 3.6 per cent reduction in am-monia losses from organic fertiliser.

As with the case described above, there is a wide range of reasons for the differences between the reduction in energy use and the reduction in nitrate surplus. On the one hand, Belgium shows comparatively high ammonia losses from organic fertiliser (50.2 kg/ha) in the reference scenario, whilst Germany shows 49 per cent lower losses, and France, losses a full 74 per cent lower; the respective changes in the ENER_SIM10 scenario pro-duce a relatively strong effect. Ireland, on the other hand, shows significant imports of inorganic fertiliser, which at 84 kg/ha are significantly higher than those of the UK (58 kg/ha), Sweden (56 kg/ha) and Finland (65 kg/ha). Consequently, bearing in mind the shifts in animal-production patterns described above, shifts in production pattern reveal clear-cut effects in terms of nitrate surplus. The explanation for the minor changes in nitrate surplus compared to those in energy-use reduction depends on the situation of the countries in ques tion. For the Netherlands, inorganic-fertiliser imports of 103 kg/ha (which are higher than those of the majority of EU countries) as well as very high ammo-nia losses from organic fertiliser (61 kg/ha; Belgian, German and French losses are 18, 58 and 79 per cent lower, respectively) can be observed. The below-EU-15 changes in number of cattle (minus 2 per cent, compared to minus 3.3 per cent in the EU-15), as well as the slightly-above-EU-15 average for reduction in pig production (minus 4.7 per cent, as opposed to minus 3.4 per cent for the EU-15) are not large enough to significantly reduce ammonia losses from organic fertiliser. For Latvia, a different picture can be drawn. On the one hand, inorganic-fertiliser imports are low in absolute terms in the reference scenario (30 kg/ha), as well as in relative terms compared to other EU-10 countries (less than half of Lithuania’s and 33 per cent less than Poland’s; only Estonia’s are comparable in quantity). On the other hand, however, ammonia losses from organic fertiliser are also low at 5.2 kg/ha, which is lower than those of all other EU-10 countries (Lithuania’s and Estonia’s losses are 10 and 15 per cent higher, respectively). Because of the low reference level, shifts in energy use are not necessarily reflected in an equivalent reduction in nitrate sur-plus.

To conclude this chapter on nitrate losses, it can be stated that the path dependencies between energy use and nitrate losses essentially result in an equivalent driving trend in terms of shifts in production patterns. Nevertheless, a wide range of countries show spe-cific production conditions (above-average animal numbers; low levels of inorganic nutri-tion and animal numbers) which do not convert shifts in producnutri-tion patterns into equiva-lent shifts in ammonia losses.

It is not just nitrate surplus which is influenced by the reduction of energy input into EU agricultural production; effects on EU landscape can also be observed. Bearing in mind the methodological descriptions given in Chapter 3.2.5, the HNV indicator represents shifts in landscape for this analysis. Selected member states and regions are analysed in order to highlight the shifts that go hand-in-hand with the limitation of energy use. This chapter not only shows countries such as Denmark and Greece, which are reducing their energy use to a disproportionately low extent (Denmark, minus 3 per cent; Greece, minus 6 per cent; EU-15 average, minus 9 per cent); it also analyses those reducing their energy use to

a disproportionately high extent⁴⁶, such as the Netherlands (minus 14 per cent) and Hun-gary (minus 13 per cent).

Starting with Denmark, this country’s energy-use reduction goes hand-in-hand with marginal shifts in cereals, oilseeds and the «other arable crops» production sector. Volun-tary set-aside and fallow area, however, are increasing by 10 per cent. A significant de crease may be noted for cattle activities and poultry fattening. This combination of an increase in unused area and a decrease in animal numbers, however, has a significant impact on the composition of the HNV for Denmark. The results can be seen in Appendix 39, Figure A.

Significant increases in the HNV values can be observed for large parts of the country and in particular for the islands, whilst the eastern coastline and the Northwest of the country are the only regions where HNV values remain below 2.

Greece shows a different adjustment pattern. A decrease in other arable crops can be observed (minus 6 per cent), as well as a lower increase in set-aside (plus 6 per cent) and fallow area (plus 10 per cent) than for Denmark. The decrease in cattle activities is likewise lower than Denmark’s (minus 2 per cent), and poultry fattening also shows a sharp de crease (minus 11 per cent). Shifts in HNV values for Greece are graphically illustrated in Appendix 39, Figure B. Because the picture is relatively fragmented, clear-cut trends cannot be obser-ved on this level. Greater clarity is provided by the detailed view in the insert on the left-hand side of Appendix 39, Figure B. The insert is illustrated in Appendix 40. Whilst the frag-mented picture is retained, it may nonetheless be observed that certain regions show a decrease in (i.e. worsening of) the landscape indicator, e.g. between Thessaloniki and Kate-rini, which is small-scale in geographic terms but significant in terms of HNV values. In the Trikala region (centre of the insert), by contrast, large areas show an improvement (i.e.

increa sing HNV values) in terms of landscape.

Having analysed those countries with a disproportionately low decrease in energy use, we may expect more significant results for those countries contributing to a dispropor-tionately high extent to total EU-25 energy savings. Taking the Netherlands, energy use is reduced by 14 per cent in the ENER_SIM10 scenario as a result of adaptations in both plant- and animal-production activities. With cereals (minus 1 per cent), oilseeds (unchanged), other arable crops (minus 1 per cent) and fodder activities (plus 1 per cent) remaining almost unchanged, additional set-aside and fallow area may be observed (plus 11 per cent), as well as a significant decrease in vegetable production (tomatoes, minus 13 per cent; other vege-tables , minus 16 per cent). Such vegevege-tables are cultivated mainly in heated greenhouses – as shown above, an energy-intensive production method. In terms of animal-production activities, a small decrease in cattle production (minus 2 per cent) and pig production (minus 5 per cent) as well as a significant decrease in poultry fattening (minus 25 per cent) can be observed. The effects of these production-portfolio adjustments on the HNV values are fairly limited, since changes in heated-greenhouse production have a significant impact on energy use but a limited effect in terms of UAA. The shifts for the Netherlands can be seen in Appendix 41, Figure A. The insert shown in Appendix 42, however, reinforces our impression of the Netherlands: very low results for the HNV indicator in the reference sce-nario, mainly due to high livestock numbers. With a coefficient of 2.13, the Netherlands, together with Belgium, has the highest EU ruminant density on grassland, expressed in live-stock units per ha; the EU-15 average is just 1.06. In the ENER_SIM10 scenario, the rele-vant values are increasing (i.e. improving) slightly in the centre of the country and along the north coast, whereas the values remain low in the South and the East. Assembling a pic-ture for the Netherlands, slight improvements may be observed, starting from a rather low HNV value, i.e. a poor landscape situation in the ENER_SIM10 sce nario.

The situation looks different with regard to Hungary⁴⁷. In comparison with the refe-rence scenario, and unlike the Netherlands, large areas of the country have HNV values above 3.68, with regions mainly in the South and the East accounting for values below

46 For technical reasons, and unlike with the no-set-aside scenario, Spain, although showing disproportionately high reductions, cannot be simulated in this scenario.

47 For technical reasons, the classification in the HNV print-outs is specific. Whereas the first class describes only the spot-0 HNV values, the sec-ond class shows values greater than 0 and less than 3.68.

3.68. This picture is improving to a large extent in the ENER_SIM10 scenario, owing to adjust ments made in the scope of plant- and animal-production activities, as shown in Appen dix 15 and Appendix 16. In terms of plant production, a slight decrease in cereal production is accompanied by an increase in oilseed production and a significant increase in voluntary set-aside and fallow land, both representing improvements in landscape qua-lity. As for animal production, a 3.6 per cent decrease in beef activities as well as a 2.2 per cent decrease in pig numbers can be observed, both of which contribute to the decrease in HNV values. The picture for Hungary is shown in Appendix 41, Figure B. Shown in Appen-dix 43, the insert underscores the adaptations in Hungarian production described above.

Significant increases in the HNV value, and hence in landscape quality, may be observed over large areas of the insert.

To conclude our analysis of the above results, above-average energy-use reductions are not necessary to achieve improvements in the HNV values and hence in the landscape qua-lity of a region; indeed, shifts in production patterns are more important for the HNV poten-tial of a region. Furthermore, the HNV value of the reference scenario is important for the improvement potential. With a very low HNV value (and hence poor landscape quality), signi ficant changes in the production portfolio are required before improvements in the HNV value can be claimed, as can be shown for large regions of the Netherlands. Where the HNV value is high in the reference scenario, improvements occur relatively quickly, as the example of Hungary shows.

Im Dokument Economic monitoring of fossil energy use in EU agriculture (Seite 114-118)