Climate Change and Agriculture - The Oxford Topic of Food, Politics, and Society - page 462

SRI, the System of Rice Intensification introduced in the 1980s, can reduce the water
needs by over half while increasing production (Mishra and Salokhe 2011; see Uphoff,
this volume). Organic production methods, such as integrated pest management and
green manure, significantly reduce water run-off, potentially doubling land productiv-
ity and halving soil erosion (Wani et al. 2003). Nitrogen-fixing trees and other crops that
lower chemical fertilizer demand and increase food production can be planted (Pretty
and Hine 2001). Pesticide use can be lowered by push-pull pest control systems3 and
integrated pest management, providing additional sources of income as well as lowering
costs and increasing productivity (Cook, Khan, and Pickett 2007).
Biogas plants are an increasingly attractive option to reduce greenhouse gas emissions
from livestock by harnessing energy from animal waste. Xu, Xiang, and Higano (2012)
show that investing in biogas plants in Jiaxing, China, would significantly reduce the
economic damage (measured in gross regional product) from tougher environmental
regulations. The authors further argue that “it is impossible to achieve the dual targets
of economic development and environment conservation when we don't treat the pig
farming waste properly” (p. 12). Without such investment, limiting water pollution lev-
els significantly lowers economic growth and stifles the region's pig farms; with a biogas
plant, even pig farming can grow while improving water quality. Other possible invest-
ments not considered by Xu, Xiang, and Higano (2012) include improved feed grains
that reduce the ecological damage from animal waste (Chen, et al. 2008) and animals
bred to emit fewer harmful chemicals (e.g., Forsberg, et al. 2003 and Yang, et al. 2008).
Popp, Lotze-Campen, and Bodirsky's (2010) model indicates that although improve-
ments in technology can reduce livestock's production of methane, changing consumer
diets can have a far larger impact on total methane production.
Full-Costing
Even improvements in technology and knowledge will likely be insufficient to com-
pletely remove the trade-off between growth and environmental outcomes in Stage
2. This is because the fundamental negative/positive externalities have not been
addressed: Firms that produce and consumers that purchase goods and services
that damage or improve the environment affect other people who are not party to
the transaction. This imbalance between “private costs” (what the firm and con-
sumer pay) and “social costs” (which include the costs to others) leads to overprovi-
sion of products that harm the environment. The other side of the same coin is that
there are positive externalities in the production of environmental services, which
benefit others who are not party to the transaction and those who bear the cost of
producing them receive no benefit. This leads to the underprovision of environ-
mental services (Kumar and Managi 2009; Mankiw 2011). Degradation and lack
of environmental services are liable to continue until social and private costs are
aligned in some way.