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Rosamond L. Naylor
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CESP senior fellows Rosamond L. Naylor, Walter P. Falcon, and Harold A. Mooney released the findings of a new study on the impacts of an increasingly global livestock industry in the Policy Forum of the Dec. 9 issue of Science.

The turkey and ham many are eating this holiday season don't just appear magically on the table. Most are the end product of an increasingly global, industrialized system that is resulting in costly environmental degradation. Better understanding of the true costs of this resource-intensive system will be critical to reducing its negative effects on the environment, says an interdisciplinary team of researchers led by Stanford University's Rosamond Lee Naylor, Walter Falcon, and Harold Mooney.

"Losing the Links Between Livestock and Land" appears in the Policy Forum in the Dec. 9 issue of Science. It represents a synthesis of research by professors at Stanford University, the University of Virginia, the University of California at Davis, the universities of Manitoba and British Columbia in Canada, and the United Nations LEAD (Livestock Development and Environment) program within the Food and Agricultural Organization of UN.

"Sixty years ago, the link between the livestock production and consumption was much more clear and direct, with most consumers getting their meat and dairy products from small, family-owned farms," says lead author Naylor, an economist. Co-author Falcon agrees. "When I was growing up in Iowa, almost all farmers kept both chickens and pigs."

Today, meat consumption has sky-rocketed, and large-scale intensive livestock operations provide most of those products, both in the U.S. and around the world.

Particularly striking is the growth in demand for meat among developing countries, Naylor notes. "China's meat consumption is increasing rapidly with income growth and urbanization, and it has more than doubled in the past generation," she says. As a result, land once used to provide grains for humans now provides feed for hogs and poultry.

Numerous factors have contributed to the global growth of livestock systems, Naylor notes, including declining feed-grain prices; relatively inexpensive transportation costs; and trade liberalization. "But many of the true costs remain largely unaccounted for," she says. Those costs include destruction of forests and grasslands to provide farmland for corn, soybeans and other feed crops destined not directly for humans but for livestock; use of large quantities of freshwater; and nitrogen losses from croplands and animal manure.

Nitrogen losses are especially problematic, says James Galloway of the University of Virginia. "Once nitrogen is lost to the atmosphere or to water, it can have a large number of sequential environmental effects. For example, ammonia emitted into the atmosphere can in sequence affect atmospheric visibility, forest productivity, lake acidity and eventually impact the nutrient status of coastal waters."

Naylor cited Brazil as a specific example of the large impact on ecosystems and the environment. "Grasslands and rainforests are being destroyed to make room for soybean cultivation," she said. The areas are supplying feed to the growing livestock industry in Brazil, China, India and other parts of the world, leading to "serious consequences on biodiversity, climate, soil and water quality."

Naylor and her research team are seeking better ways to track all costs of livestock production, especially the hidden ones related to ecosystem degradation and destruction. "What is needed is a re-coupling of crop and livestock systems," Naylor said. "If not physically, then through pricing and other policy mechanisms that reflect social costs of resource use and ecological abuse."

Such policies "should not significantly compromise the improving diets of developing countries, nor should they prohibit trade," Naylor added. Instead, they should "focus on regulatory and incentive-based tools to encourage livestock and feed producers to internalize pollution costs, minimize nutrient run-off, and pay the true price of water."

She cited efforts in the Netherlands to track nitrogen inputs and outputs for hog farms as one approach. In the U.S., the 2002 Farm Bill provided funds for livestock producers to redesign manure pits and treat wastes, but she notes that much greater public and private efforts are needed to reduce the direct and indirect pollution caused by livestock.

In the end, though, it may be up to consumers to demand more environmentally sustainable approaches to livestock production. "In a global economy with no global society, it may well be up to consumers to set a sustainable course," she added.

Seed funding for the research was provided by the Woods Institute for the Environment, which supports interdisciplinary approaches to complex environmental issues. Naylor, Falcon and Mooney are affiliated with the institute and with the Center for Environmental Sciences and Policy in Stanford's Freeman Spogli Institute for International Studies.

In addition to Naylor, Mooney and Falcon of Stanford and Galloway of Virginia, co-authors are Henning Steinfeld of the United Nations Food and Agriculture Organization; Galloway; Vaclav Smil, University of Manitoba; Eric Bradford, University of California at Davis; and Jacqueline Alder, University of British Columbia.

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The combined forces of El NinoSouthern Oscillation (ENSO) eventsand global warming are likely to have dramatic effects on future cropproduction and food security in Indonesia and other tropical countries.Indonesia consistently experiences dry climatic conditions and droughtsduring El Nino events, resulting in delayed production of rice—thecountry’s primary food staple—and exacerbated problems of foodinsecurity among the poor. Our preliminary analysis suggests thatglobal climate change could cause Indonesia’s “normal” climate state tobe similar to an El Nino state currently. Unfortunately, globalclimate models (GCMs) link poorly to regional hydrologic conditions in thetropics, and have limited coverage of the Indonesian archipelago, excludingareas representing 75% of the population and 66% of the riceproduction (Figure 1). Therefore results from the GCM need to befurther “downscaled” to understand the effects of global climate changeon Indonesian hydrology and agriculture.

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Although no country to date has released a major genetically modified (GM) food grain crop, China is on the threshold of commercializing GM rice. This paper studies two of the four GM varieties that are now in farm-level pre-production trials, the last step before commercialization. Farm surveys of randomly selected farm households that are cultivating the insect-resistant GM rice varieties, without the aid of experimental station technicians, demonstrate that when compared with households cultivating non-GM rice, small and poor farm households benefit from adopting GM rice by both higher crop yields and reduced use of pesticides, which also contribute to improved health.

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Senior fellow and contributing author, %people1%, comments in <i>Nature</i> on the release of the Millennium Ecosystem Assessment--a four year endeavour that explores the link between human well-being, the status of ecosystems and their sustainable use.

How can ecosystems provide sustainable services to benefit society?

Four years in the making, the Millennium Ecosystem Assessment (see Nature 417, 112-113; 2002) is released this week (starting 30 March). This gigantic endeavour explores the link between human well-being, the status of ecosystems and their sustainable use.

What has this assessment taught us about developing our planet, and will it, or should it, be continued? To answer the first part of this question, the assessment is an invaluable record of where we stand now, and why. But for it to be useful, the answer to the second part of the question must be 'yes'. We need to take a consistent approach to measuring the status and trends of the world's ecosystems. To take one example, the Convention on Biological Diversity has set the target of reducing the rate of global loss of biodiversity by 2010. But the data to evaluate whether this goal is being met are not readily available, as biological diversity is more than just an enumeration of species present or absent - it includes parameters such as the populations of species and the ecosystems in which they reside. In addition, biodiversity is just one of the many aspects of change in ecosystems and their related functions assessed in the Millennium Ecosystem Assessment. Only from a periodic audit of the state of our natural resource base can we determine if we are indeed approaching sustainability.

At present, there are no formal plans to repeat the Millennium Assessment. There should be, and we hope that the informal discussions among the current sponsors will bear fruit from the seeds sown by the many smaller, ongoing sub-global assessments that were stimulated by the assessment.

Achievements and goals

The Millennium Ecosystem Assessment took a new pathway of evaluating the status of the Earth's human support systems. Rather than the standard environmental audit, the new assessment places audits of numbers of organisms and so on into the context of how ecosystem changes have affected human well-being, and how they may do so in the foreseeable future. It had to find a link between the status of biotic systems and the status of individuals in various societies in the world to estimate the capacity of ecosystems to provide services that benefit society. Many of these links are obvious, but others have not been appreciated, nor have all these linkages been quantified. In essence, we had to make a large leap from the current styles of evaluations of status and trends in ecosystems to an entirely different approach - an ecosystems services database related to how ecosystems and societies operate, and how they interrelate.

Current status of ecosystems

Human societies have made marked progress in increasing provisioning services, such as crops and livestock, to meet the demand of a growing population (see Box 1). Food is more abundant and cheaper than in the past. Despite these dramatic accomplishments, there are still more than 850 million undernourished people, and some advances in production are at the cost of other services essential for human well-being, such as ocean fisheries, wood for fuel, genetic resources and - perhaps the most important - fresh water. It is the poor in many nations that are most directly dependent on services from ecosystems, and the degradation of these systems can exacerbate their poverty. Millions of people face the reality of the declining availability of cheap protein from local fisheries, inadequate water for sanitation or live on degraded landscapes.

There are a number of issues that cloud the goal of sustaining a high level of provisioning services. The use of fertilizer in agriculture has greatly increased to meet food demand, but at the cost of polluting off-site unmanaged ecosystems, such as groundwater, rivers and coastal fisheries. In many regions, water for irrigation is being pumped from groundwater and in some cases from fossil sources. Rivers are dammed and diverted for irrigation, altering ecosystems that depend on this water - causing the loss of many of the services they provided.

Further, we are diminishing crucial 'regulating' services responsible for climate, erosion, air- and water-quality control, as well as for the regulation of pests and natural hazards. We are losing these services due to massive land-surface conversion, atmosphere alteration, eutrophication, overharvesting and the impact of invasive species. The Millennium Assessment concluded that 60% of the ecosystem services evaluated were either being degraded or being used unsustainably.

As an example, cultivated systems (areas where at least 30% of the landscape is in croplands, confined livestock production or freshwater aquaculture) now cover a quarter of the Earth's surface, partly by conversion of temperate grasslands, Mediterranean-climate forests and many tropical ecosystem types. Forests have essentially disappeared from 25 countries, with 9.4 million hectares being lost annually from the Earth's surface. Historically important fisheries have collapsed or are overfished, one third of the mangrove forests for which there are historical data have been lost, as have 20% of the coral reefs, with a further 20% degraded. Nearly 40% of the rivers of the world have been fragmented. Species and populations of species are being lost at unprecedented rates, while at the same time the global biota is becoming homogenized owing to the introductions of alien species to new regions. These examples represent major losses of pieces of the biosphere machinery, which have a serious impact on the delivery of ecosystem-regulating services - impacts such as greater prevalence of infectious diseases in disrupted ecosystems, adverse effects on local climates by ecosystem modification, and the loss of flood protection (as in the recent tsunami in Indonesia).

What we can do

The drivers of change in ecosystems and their services will continue in direction and intensity. So how can these trends be reversed to achieve sustainability and to relieve the negative impacts of the loss of services to society, particularly to the disadvantaged? New pathways and approaches can and must be taken. But these are major initiatives, which will mean profound changes in the way global society operates. As learned in the Millennium Assessment, favourable responses need to take place at all levels, from the local to the global. Global mechanisms do not necessarily solve local problems, yet are an important part of the overall solution. At the same time, local players and solutions can feed into regional and global approaches. The players at these different levels address different decision-makers, who can collectively put in place the major changes that are needed for ecosystem sustainability.

The Millennium Assessment examines the merits of options for mechanisms and policies, to accomplish the goal of maintaining and enhancing the delivery of ecosystem services to society. Some of these require major reorganization in the way we do business. At present, our organizational structures address separately the issues of a single resource, such as agriculture, fisheries or the environment. There is little interaction within and between each issue, and much less again with trade and the treasury bodies. The lesson of the Millennium Assessment is that all these resource issues are interrelated: action on one issue has consequences for another. It is crucial to address how to minimize the trade-offs (biodiversity or clean water for agricultural yield), either on-site or by managing landscapes. One important example of how this process can work is the EU system of directives for nitrate accounting on landscapes.

Some institutional innovations are moving towards more integrated views of issues and responses to them. For example, Britain has a government department for Environment, Food and Rural Affairs. These are all closely interrelated domains, but in other countries are often handled by competing agencies. Elsewhere, interagency groups are evolving to address central issues such as climate change, but their effectiveness is hampered by competitiveness and politics. We need new kinds of institutions in better positions to achieve sustainability of ecosystems that provide for human well-being.

We must also try to improve the economics. Although provisioning services are enmeshed in the local (and increasingly global) marketplace, regulating services are not. We must accelerate our ability to value ecosystem-regulating services at the national level, as well as the ecosystem services that provide crucial cultural amenities, and ensure that these values are considered in decision-making.

Some progress is being made. Costa Rica has established a system of conservation payments, under which contracts are brokered between international and domestic 'buyers' and local 'sellers' of sequestered carbon, biodiversity, watershed services and scenic beauty. On a global scale, the Ecosystem Marketplace consortium is beginning to track transactions, pricing trends and buyers' requests on the carbon, water and biodiversity markets. It is predicted that the global carbon market will reach US$44 billion by 2010.

We need to eliminate the subsidies that promote the excessive use of ecosystem services and evaluate more carefully the trade incentives that damage ecosystem services. We must work harder to educate the public on the strong links between sustainable ecosystems and the lives of humans. The role of new technologies in more efficient use of natural resources is crucial and needs more incentives.

There is plenty that can and needs to be done to deal with the crisis that has already enveloped us. The path is open for scientists to quantify, to a much greater extent, the way in which the operation of ecosystems is directly linked to human well-being, and hence model the course of human activities on future outcomes of the delivery of these services. The Millennium Assessment is certainly providing a strong stimulus for such studies.

Millennium Assessment

Acknowledgements. We thank the scientists, reviewers and members of the review board who provided input to the Millennium Ecosystem Assessment, and the sponsors of this work.

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El Niño Southern Oscillation (ENSO) events exert significant influence on Southeast Asian rice output and markets. This paper measures ENSO effects on Indonesia's national and regional rice production and on world rice prices, using the August Niño 3.4 sea surface temperature anomaly (SSTA) to gauge climate variability. It shows that each degree Celsius change in the August SSTA produces a 1,318,000 metric ton effect on output and a $21/metric ton change in the world price for lower quality rice. Of the inter-annual production changes due to SSTA variation, 90% occur within 12 provinces, notably Java and South Sulawesi. New data and models offer opportunities to understand the agricultural effects of ENSO events, to reach early consensus on coming ENSO effects, and to use forecasting to improve agencies' and individuals' capacity to mitigate climate effects on food security. We propose that Indonesia hold an "ENSO summit" each September to analyse the food-security implications of upcoming climate events.

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Walter P. Falcon
Rosamond L. Naylor
Whitney L. Smith
Marshall Burke
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Donald Kennedy
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Speaking at a June 24 joint conference sponsored by the Brookings Institution and the Pew Center on Global Climate Change, CESP senior fellow Donald Kennedy warned of the pressing need to address global warming now. The conference, titled, "Toward a Sensible Center," brought together senators, CEOs, top federal and state officials, and other prominent leaders to debate the future of U.S. policy on climate change. Speakers included senators Joseph Lieberman and John McCain, U.S. Secretary of Energy Spencer Abraham, World Bank president James Wolfensohn, Larry Schweiger, president of the National Wildlife Federation, and Michael Morris, president and CEO of American Electric Power.

I begin with a proposition. There are a great many pressing problems in the world. There is population growth and economic development, with attending pressures on resources - including food and that other essential, water. There is a continuing global security crisis, augmented by the rise in terrorism. There is the chronically inequitable distribution in resources between the rich nations of the North and the poor nations of the South. And there is the steadily growing body of evidence for a major reorganization of the global climate regime.

My proposition is that the last of these is the most serious threat - not only because it will profoundly affect the lives of our children and our grandchildren in a direct way, but also because it will interact powerfully with every single one of the other problems I have listed.

Let me begin with the science underlying climate change. Last week I helped organize a symposium and briefing session on climate science for press, policy-makers, and the public, supported by the Hewlett Foundation and with co-sponsorship from the Conference Board. We had ten of the most distinguished climate scientists in the United States, led off by Sherry Rowland, the Nobel Laureate in Chemistry. The purpose was to make a careful assessment of the science - what we know for sure, what we think likely, and what are interesting but unproven possibilities.

So here is a short summary of what we know. General Circulation Models - climate models that take into account variations in the sun's energy, volcanic activity, and other natural phenomena - explained fluctuations in average global temperature very well over most of the past thousand years. But for the past hundred years, these same models faithfully reproduce global temperature history ONLY if they include the greenhouse gases - carbon dioxide, methane, and chlorofluorocarbons - that are by-products of human economic activity. That is why the average temperature of the globe has risen by about one degree F, and the sea level has risen by between 10 and 20 cm., in the last century. The primary causative agent is carbon dioxide, which in preindustrial times was about 280 ppm/v and has now reached 380ppm/v. It is rising continually as the activities that produce it are proceeding on a business as usual basis. That is because the failure of the Kyoto protocol - a failure both because its targets were inadequate, and also because they were unattainable by many of the participating nations - has left us without any basis for meeting the goals of the 1992 Framework Convention on Climate Change. Just to remind us, the US is a signatory and a party to that agreement, under which we are committed to limit atmospheric concentrations of greenhouse gases to avoid "dangerous anthropogenic interference with the climate system."

Why, a dozen years later, is there some doubt about the dangers of this interference? The C02 we add to the atmosphere will stay there; its average residence time is a century. There is no disagreement about whether average global temperature will rise; it will. The scientific debate is about how much. For the future we depend again on the General Circulation Models. It's reassuring that when applied to past climates in "back-casting" efforts, like the example I gave a moment ago, these actually predict climate history so accurately. Perhaps more interesting, they regularly somewhat underestimate the magnitude of the real climate changes - that is, Nature regularly turns out to be harsher than the models suggest. Projecting the models into the future, the Intergovernmental Panel on Climate Change, and an evaluation by the National Academies prepared at President Bush's request, estimate that by the end of this century, the increase in average global temperature will be between 1.4 and 5.8 degrees Centigrade.

Why such a range? These models, like most, contain some uncertainties. Some of these are scientific: how increased cloud cover might affect the outcome, since clouds can either cool the climate by reflecting sunlight from above, or warm it by trapping heat that is leaving from below; how changes in the earth's albedo due to melting ice might accelerate heating, and so on. Aerosols produced by volcanic eruptions have a cooling effect, as the eruption of Mt. Pinatubo did in giving us two unusually cool years in the early 90's. Other uncertainties are economic and social: we don't know how national policies and international agreements will serve to restrain the amount of greenhouse gases we are adding.

These uncertainties - about half due to the models themselves, and the rest to social and economic unknowns -- have provided arguments for those who prefer to postpone economically difficult approaches for controlling greenhouse gas emissions. But it is important that even at the very lowest estimates, there will be substantial changes in the nature of human life on the only planet we currently occupy. The rather modest impacts of the past century have already produced profound changes in regional climate dynamics. Substantial ice-sheet melting and retreat is taking place both in the Arctic and in the West Antarctic ice sheet. In the Arctic, where climate warming has been extreme, sea ice is sharply diminished and rivers become ice-free much earlier. Low latitude mountain glaciers are shrinking; the famous snow-capped summit of Kilimanjaro will be bare within fifteen years, converting hundreds of old African safari shots into historic treasures.

Biological cycles are experiencing the effects of warming, with upward extensions of the range of Alpine flora and advances in the time of flowering or breeding by an average of 5 days per decade. The models have all also predicted more frequent and severe weather events, and we have had heat waves in the upper Midwest and Paris, accelerated beach erosion on coasts all over the world, and disastrous floods and landslides in Central America.

That is now, but of course we are more interested in the future. What the models tell us unambiguously is that the climate system is headed for further disruption. The standard scenario foresees a steady, ramp-like increase in average global temperature, with a concomitant rise in sea level, but records of past climate tell us that it is riddled with abrupt changes - something that the models fail to predict well. A possible alternative involves a change in major ocean circulation patterns - especially in the North Atlantic, where a clockwise gyre brings warm equatorial water up via the Gulf Stream. As it flows Northward and then crosses Eastward, it is cooled by the atmosphere, becomes more saline through evaporation, and then sinks to return as a cold deep current. If large discharges of fresh meltwater or rain made this water less dense, it could fail to sink and thus disrupt the entire cycle.

A fictionalized version of such a scenario appears in the disaster film "The Day After Tomorrow," which you should see only for amusement. Beyond that silliness lies a real prospect that a gradual change in average global temperature could intercept the threshold for some non-linear, dynamic process, triggering abrupt changes in either direction. Of course there is uncertainty: we are engaged in a large-scale, uncontrolled experiment on the only planet we have.

Let's consider some collateral impacts. A group of us at Stanford was asked by the Carnegie Commission on Preventing Deadly Conflict to look - among other things -- at ways in which environmental change might alter the circumstances under which human populations might be placed. Climate change was an important variable. One example we looked at was the impact of sea level rise, along with storm surges from extreme weather events, on the Ganges-Brahmaputra delta. Flood disasters already occur there regularly. 15 million people live within 2 meter above sea level, and are vulnerable to abrupt displacement. We know they will have to go somewhere; in the past they have fled in much smaller numbers to Bengal. The security problems arising from a massive influx of a traditionally hostile population, combined with an almost certain high level of cholera infection, are not difficult to imagine.

Water is a desperately important resource in most parts of the world, and drought is often followed by famine or emigration. Here in the US, warmer winters threaten mountain snowpacks and will soon demand the revision of interstate and international water allocation agreements. Maritime rivers are already undertaking management steps to deal with saline intrusions due to sea level rise or storm surges. In Great Britain, the barrier that protects London from occasional flooding of the Thames estuary is now being used six times a year compared to less than once a year in the 1980's.

Agriculture, of course, is the most essential of human activities. The regional distribution of global warming impacts may be at least temporarily kind to temperate-zone food production. But the models all predict an increased incidence of mid-continent droughts as climate change progresses, and we know that the American Midwest has in the past experienced droughts both deeper and longer than the one in the 30's that led to the Dust Bowl migrations. Irrigation is an answer to drought, but in the six High Plains states, dryland wheat production depends upon the Ogallala Aquifer, a buried ice-age storage well that is being so rapidly depleted that it is already unusable in its southern portion. And in the tropics, where people are poorest and capacity to adapt is minimal, the consequences of even modest warming will be far more serious.

Infectious diseases are spread by vectors, like the Anopheles malaria mosquito, that have their own patterns of reproduction, movement, and climate sensitivity. In parts of Africa where vertical topography dominates, warmer and rainier seasons cause malaria incidence to rise in higher-altitude locations. In a warmer and wetter world, more of the same can be expected.

So climate change is not an isolated problem. Instead, it is likely to interact with most of the other problems humans face all over the world. Thus I hope that this meeting will help encourage us to prepare a sound portfolio of risk-reducing measures. These will not, I must tell you, bring us out of the woods. Our destiny is partly built in -- to the heat that is already locked into our oceans, to the greenhouse gases that are already in our atmosphere and will increase by another 50% or more no matter what we do, and to the justified economic appetites of the developing world. What we will be talking about, it should be clear, are ways of limiting the damage to manageable levels, NOT preserving the status quo. We lost that years ago.

So the contemporary policy challenge amounts to a bet about risk: are the consequences of business as usual likely to entail costs greater than those of beginning to mitigate those consequences now? Other nations - the UK, several EU countries, and Japan - are making substantial commitments. Some industries - British Petroleum, Royal Dutch Shell, and Swiss Re, for example - have undertaken steps of their own. The insurance burden from the exploding rates of coastal erosion and storm damage has pushed the insurance industry to lead. If companies fail to participate in emissions reduction and join with others to resist such measures, questions are already being raised. If you believe so strongly that climate change is a myth, Swiss Re might say, then surely you won't mind a climate-related events exclusion from your Directors and Officers insurance policy.

 

But we can't count on voluntary actions, and the United States so far has only announced a long-range research program that, although it looks reasonable, makes NO current commitments to mitigate our contribution, about a quarter of the world's, to the global warming problem. We must have a more aggressive national policy to purchase insurance against this risk.

It will not be cheap. We have old, coal-fired power plants in this country; it may take subsidies to replace them with modern, less carbon-intensive facilities that run on natural gas. States like mine are already driving the transportation sector to ultra-low emission, and that may move the domestic industry in a positive direction. Some of us will have to give up our reflex opposition to nuclear power and begin comparing its risks realistically against those of global climate change. Although the room for alternative energy sources (photovoltaic, wind, geothermal) is limited, these options need encouragement. Energy conservation measures have, at several times in the past, turned economic predictions on their head by their success, and the right incentives could yield real benefits there.

The portfolio I have just described is needed, but will not be enough. We know that market-based mechanisms for emissions control can work, because they did in the 1990 Clean Air Act Amendments that limited SO2 emissions. The bill proposed by Senators McCain and Lieberman would mandate a cap-and-trade program for controlling carbon dioxide emissions. Similar systems are being considered by regional assemblages of states in the Northwest and the Northeast, and that may encourage the development of a national system - which could then build trading relationships with other nations that are moving toward similar regimes. A case for this approach is elegantly made in the Council on Foreign Relations Policy Initiative on Climate Change, by my colleague David Victor.

The United States is in a position of natural leadership here. It is the most powerful nation - and the world's leading producer of greenhouse gases. Plainly it is in its own national interest, in multiple ways, to reduce its consumption of fossil fuels. To see it failing in this most vital, globally sensitive matter is a national embarrassment.

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El Nino/Southern Oscillation (ENSO) events have a dominate influence on rice output and markets in Southeast Asia. This paper measures ENSO effects on rice production in Indonesia-nationally and regionally-and on world rice prices using the August sea surface temperature anomaly (SSTA) as the primary gauge of climate variability. Our estimates show that for each degree (C) change in the August SSTA, there is a 1,318 thousand metric ton effect on paddy production in Indonesia and a $23/metric ton change in the world rice price. Ninety percent of the inter-annual changes in paddy production caused by SSTA variations take place within twelve provinces, with Java and South Sulewesi bearing by far the greatest impact. New data and models now combine to provide Indonesia with opportunities for understanding the effects of ENSO events on agriculture, for forming an early consensus on likely ENSO effects for the coming year, and for using forecasts in ways that permit agencies and individuals to do a more credible job of mitigating negative climate effects on food security. Among other suggestions, we propose that an "ENSO Summit" be held each year, sometime between September 15-30, to analyze the likely food-security implications arising from upcoming climate events.

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Bulletin of Indonesian Economic Studies
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Walter P. Falcon
Rosamond L. Naylor
Whitney L. Smith

Center on Food Security and the Environment
Stanford University
Stanford, CA 94305-6055

(650) 721-2203
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Senior Fellow, Center on Food Security and the Environment
Associate Professor of Earth System Science
Senior Fellow at the Freeman Spogli Institute for International Studies
Senior Fellow at the Stanford Woods Institute for the Environment
Senior Fellow at the Stanford Institute for Economic Policy Research
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Marshall Burke is a senior fellow at the Center on Food Security and the Environment, associate professor in the Department of Earth System Science and senior fellow at the Stanford Woods Institute for the Environment, Freeman Spogli Institute for International Studies, and Stanford Institute for Economic Policy Research, along with a research fellow at the National Bureau of Economic Research. His research focuses on social and economic impacts of environmental change, and on the economics of rural development in Africa. His work has appeared in both economics and scientific journals, including recent publications in Nature, Science, the Proceedings of the National Academy of Sciences, and the Review of Economics and Statistics. He holds a PhD in Agricultural and Resource Economics from UC Berkeley, and a BA in International Relations from Stanford.

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Despite the impact of El Nino-Southern Oscillation (ENSO) events on climate in the Indo-Pacific region, models linking ENSO-based climate variability to Indonesian cereal production are not well developed. This study measures connections among sea-surface temperature anomalies (SSTAs), rainfall, and Indonesian rice and corn production from 1971 to 1998. Year-to-year August SSTA fluctuations explain about half the interannual variance in paddy production during the main (wet) season. These effects are cumulative for rice: during strong El Nino years, wet season production shortfalls are not made up subsequently. For corn, the cumulative area sown is actually higher in El Nino years than La Nina years. Indonesia's paddy production varies on average by 1.4 million tons for every 1 C change in August SSTAs. The paper illustrates how an SSTA model might assist policy makers with budgetary processes, and private sector cereal traders with framing production expectations.

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Walter P. Falcon
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