Economic impact of Climate Change on the Cypriot agricultural sector

Economic impact of Climate Change on the Cypriot agricultural sector Working Paper Markou Marinos, Stylianou Andreas Agricultural Research Institute Adriana Bruggeman*, Christos Zoumides+, Stelios Pashiardis, Panos Hadjinicolaou*, Manfred A. Lange* and T. Zachariadis+ * The Cyprus Institute, +Cyprus University of Technology, Cyprus Meteorological Service Anastasios Michaelides, Aristotle University of Thessaloniki Nicosia, August 2011 1

The economic impact of climate change on Cypriot agriculture Contents Main Report Περίληψη στα Ελληνικά - Executive summary Policy recommendations and suggestions PART ONE Cost of climate change on agricultural activities. By Marinos Markou, Andreas Sylianou, (Agricultural Research Institute) Chapter 1 Introduction 1.1 Literature review 1.2 Introduction 1.3 Structure of the study Chapter 2 The expected impact of climate change on agricultural activities 2.1 The impact of temperature increase on crops 2.2 Changes in the availability of water 2.3 Soil degradation (salinity, erosion, fertility) 2.4 Intensification of pests, diseases and herbs 2.5 Climate change and Cyprus 2.5.1 The impact of climate change on the Southern Mediterranean region 2.5.2 Climate tendencies in Cyprus 2.5.3 Greenhouse gas emissions in Cyprus 2.5.4 Water resources in Cyprus 2.5.5 Desertification Chapter 3 Methodology 3.1 Expected economic impact of climate change to the cultivated crops 2

3.2 Analysis of statistical data 3.3 Contingent analysis method 3.4 Adaptation to climate change Chapter 4 Estimation results 4.1 Results from statistical data analysis 4.2 Results from Contingent Analysis 4.3 Results from climate variability simulation 4.4. Cost of adaptation Chapter 5 Conclusions References Appendix 1 General review of the Cypriot agricultural sector Appendix 2 Effect of climate variability and climate change on crop production and water resources in Cyprus. By Adriana Bruggeman *, Christos Zoumides +, Manfred A. Lange * and T. Zachariadis + (* The Cyprus Institute + Cyprus University of Technology) Appendix 3 Estimation of impacts of Climate Change using Non-Market Valuation Method. By Anastasios Michaelides (Aristotle University of Thessaloniki), Marinos Markou and Andreas Stylianou (Agricultural Research Institute) Appendix 4 Questionnaire used for Contingent Valuation Method (in Greek) Appendix 5 Tables 3

ΠΕΡΙΛΗΨΗ Κύριος στόχος της παρούσας εργασίας είναι η αποτίµηση σε χρηµατικές µονάδες του κόστους της κλιµατικής αλλαγής στην κυπριακή γεωργία. Προκειµένου να επιτευχθεί αυτός ο στόχος έχουν χρησιµοποιηθεί τρεις διαφορετικές προσεγγίσεις. Η πρώτη εφαρµόζει ένα κλιµατολογικό µοντέλο προσαρµοσµένο στις τοπικές συνθήκες της Κύπρου και η δεύτερη χρησιµοποιεί τη Μεθοδολογία Contingent Valuation. Ως τρίτη προσέγγιση και καθαρά µόνο για λόγους υποστήριξης του επιχειρήµατος ότι η Κύπρος υφίσταται επιπτώσεις από την κλιµατική µεταβολή γίνεται ανάλυση των διαθέσιµων στατιστικών στοιχείων για τις επιδόσεις του γεωργικού τοµέα τα τελευταία χρόνια. H φυτική παραγωγή στην Κύπρο περιορίζεται λόγω του ιδιαίτερα µεταβλητού κλίµατος, της χαµηλής βροχόπτωσης και των υψηλών θερµοκρασιών. Επιπρόσθετα, η παγκόσµια κλιµατική αλλαγή και οι πολιτικές που προσβλέπουν στην αειφόρο διαχείριση και χρήση των υδάτινων πόρων, αναµένεται να επιφέρουν µείωση στην προσφορά του νερού άρδευσης. Κύριοι στόχοι του κλιµατολογικού µοντέλου (Παράρτηµα 2) ήταν: (α) η αποτίµηση της διαχρονικής εξέλιξης των κλιµατικών παραµέτρων κατά τη διάρκεια των τελευταίων 30 ετών, (β) η εκτίµηση της επίδρασης της µεταβλητότητας του κλίµατος σε σχέση µε τις αλλαγές στη χρήση γεωργικής γης, στην παραγωγή και στη ζήτηση νερού άρδευσης και (γ) η εκτίµηση των επιπτώσεων στη φυτική παράγωγη για τα επτά επόµενα έτη της τρέχουσας δεκαετίας (2013/14-2019/20), σύµφωνα µε πιθανά σενάρια κλιµατικής αλλαγής και µειωµένης παροχής νερού άρδευσης. Αναπτύχθηκε ένα ηµερήσιο µοντέλο εκτίµησης του ισοζυγίου του εδαφικού νερού, το οποίο αναφέρεται ως µοντέλο Green-Blue και βασίζεται στη µεθοδολογία διπλών φυτικών συντελεστών του Παγκοσµίου Οργανισµού Τροφίµων και Γεωργίας (FAO). Το µοντέλο υπολογίζει τη χρήση εδαφικού νερού στις καλλιέργειες το οποίο προέρχεται τόσο από τη βροχόπτωση (πράσινο νερό) όσο και από την άρδευση (µπλε νερό). Έχουν χρησιµοποιηθεί τα δεδοµένα που ήταν διαθέσιµα από τις Αγροτικές Στατιστικές και τις Γεωργικές Απογραφές και αφορούν την έκταση και φυτική παραγωγή των τελευταίων 30 ετών (1979/80-2008/09), για 87 καλλιέργειες σε 431 κοινότητες της Κύπρου. Για την προσοµοίωση των µελλοντικών σεναρίων χρησιµοποιήθηκαν οι καλλιεργήσιµες εκτάσεις που ήταν εγγεγραµµένες στον Κυπριακό Οργανισµό Αγροτικών Πληρωµών (ΚΟΑΠ) το 2010. Χρησιµοποιήθηκαν επίσης ηµερήσια κλιµατικά δεδοµένα από 34 µετεωρολογικούς 4

και 70 βροχοµετρικούς σταθµούς για τον υπολογισµό του ισοζυγίου του εδαφικού νερού. Και στους τέσσερις σταθµούς που είχαν επιλεγεί για την ανάλυση των κλιµατικών τάσεων (Λάρνακα, Κόρνος, Πλατάνια και Πρόδροµος), παρατηρήθηκαν στατιστικά σηµαντικές ανοδικές τάσεις στον µηνιαίο µέσο όρο των ελάχιστων ηµερήσιων θερµοκρασιών κατά τους καλοκαιρινούς µήνες, σε επίπεδο σηµαντικότητας 5%. Όσον αφορά τις µέγιστες ηµερήσιες θερµοκρασίες, σηµαντικά θετικές τάσεις παρατηρήθηκαν στην οροσειρά του Τροόδους και από τον σταθµό στον Πρόδροµο (για πέντε µήνες), στους ανατολικούς πρόποδες της οροσειράς από τον σταθµό στον Κόρνο (για επτά µήνες) και στα ανατολικά παράλια από τον σταθµό Λάρνακας (για εννέα µήνες). Αναφορικά µε τα επίπεδα βροχόπτωσης, παρατηρήθηκαν µεγάλες διακυµάνσεις σε όλους του σταθµούς, µε τη µόνη στατιστικά σηµαντική τάση να βρίσκεται στον Κόρνο όπου παρατηρήθηκε πτώση κατά τον µήνα Μάρτιο. Η µέγιστη συνολική έκταση των ετήσιων καλλιεργειών παρατηρήθηκε το 2005 και ανήλθε στα 101,9*10 3 εκτάρια, έπειτα από τρεις διαδοχικά βροχερές χρονιές, ενώ η ελάχιστη έκταση παρατηρήθηκε κατά το έτος ανοµβρίας του 2008, όπου συρρικνώθηκε στα 70,9*10 3 εκτάρια. Όσον αφορά τις εκτάσεις µόνιµων καλλιεργειών, παρατηρήθηκε µείωση κατά σχεδόν 40% την τελευταία τριακονταετία, από 62,2*10 3 εκτάρια το 1980 στα 38,4*10 3 εκτάρια το 2009. Οι κύριες απώλειες αφορούν τις εκτάσεις αµπελοκαλλιέργειας, οι οποίες µειώθηκαν από 34,3*10 3 εκτάρια στα 8,3*10 3 εκτάρια, και τις εκτάσεις ξηρών καρπών οι οποίες συρρικνώθηκαν στα 5,3*10 3 εκτάρια από 13,3*10 3 εκτάρια, ενώ οι ελαιοκοµικές εκτάσεις αυξήθηκαν από 5,7*10 3 εκτάρια στα 12,0*10 3 εκτάρια. Η περίοδος 1980/81-2008/09 χωρίστηκε σε επτά ξηρά, δεκαπέντε µέσα και επτά βροχερά έτη, µε βάση τον δείκτη ξηρασίας (αναλογία βροχόπτωσης προς εξατµισοδιαπνοή αναφοράς). Η µέση ετήσια φυτική παραγωγή ήταν κατά 8% χαµηλότερη στη διάρκεια των ξηρών ετών και κατά 5% υψηλότερη στη διάρκεια των βροχερών ετών, σε σχέση µε τη φυτική παραγωγή των δεκαπέντε µέσων ετών. Σύµφωνα µε τους υπολογισµούς του µοντέλου, η συνολική χρήση µπλε νερού ήταν κατά µέσο όρο 190*10 6 κ.µ./έτος καθ' όλη τη διάρκεια της περιόδου 1980/81-2009/10, ενώ ήταν µόλις 2% υψηλότερη κατά τη διάρκεια των ξηρών ετών και 2% χαµηλότερη κατά τη διάρκεια των βροχερών ετών. Η µέγιστη χρήση µπλε νερού 5

σηµειώθηκε την περίοδο 1989/90 (219*10 6 κ.µ.), ενώ η ελάχιστη έφτασε στο ιστορικά χαµηλό ρεκόρ των 150*10 6 κ.µ. κατά την πολύ ξηρή περίοδο 2007/08. Η συνολική χρήση πράσινου νερού κυµάνθηκε µεταξύ 135*10 6 κ.µ. την περίοδο 2007/08 και 368*10 6 κ.µ. την περίοδο 2003/04. Οι αρδευόµενες εκτάσεις καταλάµβαναν κατά µέσο όρο το 23% της συνολικής καλλιεργούµενης γης, ενώ συνέβαλλαν κατά 65% στη συνολική φυτική παραγωγή, καταναλώνοντας το 48% του µπλε και πράσινου νερού. Οι καλλιεργούµενες εκτάσεις που εξαρτιόνταν µόνο από τη βροχόπτωση παρήγαγαν κατά µέσο όρο 273*10 3 τόνους φυτικής παραγωγής ανά έτος, χρησιµοποιώντας 277*10 6 κ.µ. πράσινο νερό ανά έτος. Αξίζει να σηµειωθεί ότι αν το νερό αυτό δεν αξιοποιούνταν από τις ξηρικές καλλιέργειες, θα επέστρεφε στην ατµόσφαιρα χωρίς ιδιαίτερο τοπικό όφελος. Οι προβλέψεις κλιµατικών αλλαγών που αφορούν την Κύπρο, σύµφωνα µε το σύνολο έξι περιφερειακών κλιµατικών µοντέλων που βασίζονται στο µέσο σενάριο εκποµπών ρύπων A1B(IPCC-SRES) που έχει δηµοσιεύσει η ιακυβερνητική Επιτροπή των Ηνωµένων Εθνών για την Κλιµατική Αλλαγή, υποδεικνύουν αύξηση της θερµοκρασίας και υψηλή µεταβλητότητα στα επίπεδα βροχόπτωσης µε ελαφριά πτωτική τάση για την περίοδο 2013/14-2019/20. Για την προσοµοίωση των κλιµατικών αλλαγών, αναπτύχθηκαν δύο σενάρια: (1) σενάριο χειρότερης περίπτωσης, το οποίο χαρακτηρίζεται από τα καταγεγραµµένα κλιµατικά δεδοµένα των επτά ξηρών ετών της περιόδου 1980/81-2008/09 και (2) σενάριο µέσων κλιµατικών συνθηκών, που αποτελείται από τρία ξηρά, δύο µέσα και δύο βροχερά έτη, µε το καθένα να χαρακτηρίζεται από την υψηλότερη τιµή εξατµισοδιαπνοής στην κατηγορία του. Και στα δύο σενάρια, η ζήτηση αρδεύσιµου νερού περιορίστηκε στα 129*10 6 κ.µ./έτος, όπως προτείνει το Σχέδιο ιαχείρισης Λεκάνης Απορροής που υιοθέτησε πρόσφατα το Τµήµα Αναπτύξεως Υδάτων, το οποίο συνιστά 25% µείωση όλων των αρδεύσιµων εκτάσεων που ήταν εγγεγραµµένες στον ΚΟΑΠ το 2010. Η υπολογιζόµενη συνολική ετήσια παραγωγή για την περίοδο 2013/14-2019/20 µειώθηκε κατά µέσο όρο 41% υπό το σενάριο 1 και 43% υπό το σενάριο 2, σε σχέση µε τον µέσο όρο της περιόδου 1980/81-2008/09. Τα αποτελέσµατα αυτά υποδεικνύουν ότι στο εγγύς µέλλον, οι πολιτικές διαχείρισης υδάτινων πόρων αναµένεται να επηρεάσουν σε µεγάλο βαθµό τη γεωργία. Φυσικά, η διαθεσιµότητα αρδεύσιµου νερού είναι πιθανό να µειωθεί 6

επιπρόσθετα και λόγω της κλιµατικής αλλαγής. Καταληκτικά, η ανάλυση των αποτελεσµάτων του µοντέλου που εφαρµόστηκε, κατέδειξε σηµαντική διακύµανση στη χρήση νερού ανά έτος, τόσο ανάµεσα στις καλλιέργειες όσο και στις κοινότητες, υποδεικνύοντας ότι υπάρχουν πολλαπλές δυνατότητες προσαρµογής της Κυπριακή γεωργίας στις επερχόµενες κλιµατικές αλλαγές. Η ανάλυση δύο πιθανών σεναρίων κλιµατικής αλλαγής που προέκυψαν από το κλιµατολογικό µοντέλο, αντιπροσωπεύονται από περισσότερα ξηρά έτη, υψηλότερη εξάτµιση, και λιγότερη παροχή αρδευτικού νερού, η οποία είχε ως αποτέλεσµα στη µείωση της αρδευόµενης κατά το 2010 έκτασης κατά 25%, προβλέπουν πιθανή µείωση από 41 µέχρι 43% στη συνολική απόδοση της φυτικής παραγωγής το 2013/14-2019/2020, σε σχέση µε την περίοδο1980/81-2008/09. Λαµβάνοντας υπόψη ότι η προστιθέµενη αξία της φυτικής παραγωγής είναι κοντά στα 200 εκατ. η απώλεια της φυτικής παραγωγής κατά την περίοδο 2014-2020 θα ανέλθει σε 574 έως 602 εκατοµµύρια. Σύµφωνα µε τα διαθέσιµα στατιστικά στοιχεία υπολογίζεται ότι κατά µέσο όρο η προστιθέµενη αξία της φυτικής παραγωγής µειώνεται κατά 4% κατά τη διάρκεια των «κακών» χρονιών. Ως «κακές» θεωρούνται οι χρονιές στη διάρκεια των οποίων η µέση βροχόπτωση είναι κάτω, ή πολύ πιο κάτω από τη µέση ετήσια βροχόπτωση. Με βάση τα κλιµατικά δεδοµένα που καταγράφηκαν στις προηγούµενες τρεις δεκαετίες, αναµένεται ότι κατά τη διάρκεια της επταετούς προγραµµατικής περιόδου 2014-2020 τέσσερις χρονιές θα είναι «κακές» µε βροχοπτώσεις κάτω του µέσου όρου. Με την προστιθέµενη αξία της φυτικής παραγωγής να ανέρχεται περίπου σε 200 εκατοµµύρια, αναµένεται συνολική µείωση 56 εκατ. στην προστιθέµενη αξία της φυτικής παραγωγής κατά τη διάρκεια της επταετούς προγραµµατικής περιόδου. Η χρησιµότητα αυτής της εκτίµησης είναι ενδεικτική αλλά και προφανής, αφού υποστηρίζει το γεγονός ότι οι αποδόσεις της κυπριακής γεωργίας πλήττονται µόνιµα και σοβαρά από τις κακές καιρικές συνθήκες. Για σκοπούς ενίσχυσης των εκτιµήσεων από το κλιµατολογικό µοντέλο κρίθηκε σκόπιµο να διερευνηθεί η µέγιστη προθυµία πληρωµής (willingness to pay) των κατοίκων και κυρίως των αγροτών της περιοχής, για την αποφυγή των αρνητικών εξωτερικών επιδράσεων της κλιµατικής αλλαγής. Ωστόσο, κρίθηκε σκόπιµο να συµπεριληφθεί στο δείγµα της έρευνας οµάδα ειδικών (αντί για τους ίδιους τους αγρότες) οι οποίοι θεωρήθηκε ότι έχουν καλύτερη γνώση του φαινοµένου της 7

κλιµατικής αλλαγής και εποµένως οι εκτιµήσεις τους θα προσεγγίζουν καλύτερα την πραγµατικότητα. Η έρευνα βασίστηκε σε πρωτογενή δεδοµένα τα οποία συγκεντρώθηκαν µε τη χρήση ερωτηµατολογίου που συµπληρώθηκε µέσω ηλεκτρονικού ταχυδροµείου. Το χρονικό διάστηµα διεξαγωγής της έρευνας ήταν από τον Μάιο έως το Ιούνιο του 2011, ενώ συµµετείχε σε αυτήν οµάδα εστίασης 19 ειδικών από την Κύπρο. Προκειµένου τα αποτελέσµατα που θα προκύψουν από την έρευνα να τύχουν κατά το δυνατόν γενίκευσης για το σύνολο του πληθυσµού της περιοχής έρευνας ως δυνητικοί αποδέκτες των επιπτώσεων της κλιµατικής αλλαγής αντιµετωπίστηκαν όλοι οι κάτοικοι της περιοχής έρευνας οι οποίοι και θεωρήθηκαν κατάλληλα άτοµα για να συµµετάσχουν στην έρευνα και εποµένως οι γενίκευση των αποτελεσµάτων έγινε στο σύνολο των κατοίκων της Κύπρου. Όπως προκύπτει από την ανάλυση των ερωτηµατολογίων (Παράρτηµα 3) το τελικό άθροισµα των επιπτώσεων αντιπροσωπεύει το συνολικό κόστος της κλιµατικής αλλαγής και ανέρχεται ετήσια σε 71.84 εκατοµµύρια για το γεωργικό πληθυσµό και 240.73 εκατοµµύρια για το συνολικό πληθυσµό. Συνεπώς το αναµενόµενο κόστος της κλιµατικής αλλαγής στη γεωργία στην επταετή προγραµµατική περίοδο 2014-2020 θα ανέλθει από 503.0 έως 1685 εκατοµµύρια. Αξίζει να σηµειωθεί ότι ως σηµαντικότερη επίπτωση αναφέρεται η αύξηση της ποσότητας του CO 2 στην ατµόσφαιρα και η επιβάρυνση της βιοποικιλότητας και των οικοσυστηµάτων, ενώ ως λιγότερο σηµαντικές επιπτώσεις αναφέρονται η αυξοµείωση της παραγωγικότητας και η διαφοροποίηση της γεωργικής παραγωγής και του εµπορίου των αγροτικών προϊόντων. Με βάση τους υπολογισµούς που έγιναν στα πλαίσια της παρούσας εργασίας προκύπτει ότι το συνολικό κόστος των επιπτώσεων από την κλιµατική αλλαγή στην κυπριακή γεωργία την επταετία 2014-2020 θα ανέλθει µε βάση το κλιµατολογικό µοντέλο από 574 έως 602 εκατοµµύρια και µε βάση την προθυµία πληρωµής στα 503.0 εκατοµµύρια. Γενικά, θα µπορούσε να λεχθεί ότι η διαφορά µεταξύ του εκτιµώµενου κόστους του µοντέλου ( 574-602 εκ) και της προθυµίας πληρωµής ( 503.0-1685 εκ.) από τη µια και του κόστους της στατιστικής ανάλυσης ( 56 εκ.) από την άλλη, οφείλεται στο γεγονός ότι τόσο το κλιµατολογικό µοντέλο όσο και η προθυµία πληρωµής εκτιµούν εκτός από το κόστος από δυσµενείς κλιµατικές συνθήκες το επιπλέον κόστος λόγω της ανάγκης για µείωση στο αρδευόµενο νερό για λόγους αειφόρου διαχείρισης των υδάτινων πόρων. Θα µπορούσε κανείς να πει ότι 8

αυτό είναι το κόστος προσαρµογής στην κλιµατική αλλαγή, αλλά και γενικότερα κόστος προσαρµογής για να αποφευχθεί ακόµα µεγαλύτερο µελλοντικό κόστος λόγω κακοδιαχείρισης των υδάτινων πόρων. EXECUTIVE SUMMARY The principal aim of the current study is to measure in a scientific manner the cost of climate change on Cypriot agriculture. In order to achieve this target three different approaches have been employed. The first utilizes a variability climate model adapted to the local conditions and the second employees the Contingent Valuation Method. A third approach, and purely for reasons to support the argument that Cyprus suffers from climate change is an analysis of available statistics on the performance of the agricultural sector in recent years. Crop production in Cyprus is constrained by a highly variable climate, limited precipitation and high temperatures. In addition, global climate change and water management policies that support the sustainable use of water resources are also reducing irrigation water supply. The main aims of the climatic model (Appendix 2) were (i) to assess trends in climate parameters during the past 30 years; (ii) to assess the effect of climate variability on changes in agricultural land use, production and irrigation water demand; and (iii) to assess the effect of possible climate change scenarios and reduced irrigation water supply on crop production for the last seven seasons of this decade (2013/14-2019/20). A daily soil water balance model, based on the FAO dual crop coefficient approach, referred to as the Green-Blue Water Model, was developed to compute the crop soil water use, originating from precipitation (green water) and from irrigation (blue water). Crop area and production data for 30 seasons (1979/80-2008/09), 87 different crops and 431 communities were obtained from the Agricultural Statistics and Censuses. Crop areas registered by the Cyprus Agricultural Payment Organisation (CAPO) in 2010 were used to simulate future scenarios. Daily climate data from 34 stations and precipitation data from 70 gauges were used for the water balance computations. 9

The monthly averages of the daily minimum temperatures were found to have statistically significant upward trends, at the 5% significance level, for the summer months at all four stations that were analyzed for trends (Larnaca, Kornos, Platania and Prodromos). The monthly averages of the daily maximum temperatures were also found to have statistically significant positive trends at Prodromos in the Troodos mountains (five months), Kornos in the eastern foot hills of the mountains (seven months), and Larnaca at the coast (nine months). Precipitation was highly variable and the only statistically significant trend was a downward trend for March at Kornos. The total harvested area of temporary (annual) crops peaked at 101.9*10 3 ha in 2005, after a sequence of three wet seasons, and dwindled to 70.9*10 3 ha during the 2008 drought year. The harvested permanent crop area decreased by nearly 40%, from 62.2*10 3 ha in 1980 to 38.4*10 3 ha in 2009. The main loss was for the vine growing area, which decreased from 34.3 to 8.3*10 3 ha, and for the areas planted with nut trees, which shrank from 13.3 to 5.3*10 3 ha, while the olive area increased from 5.7 to 12.0*10 3 ha. The 1980/81-2008/09 seasons were divided in seven dry years, fifteen average and seven wet years, based on their aridity ratio (precipitation over reference evapotranspiration). Average annual crop production was 8% lower during the dry years and 5% higher during the wet years, relative to the production during the fifteen average years. Model computations indicated that total blue water use averaged 190*10 6 m 3 /yr during the 1980/81-2008/09 seasons and was only 2% higher during the dry years and 2% lower during the wet years. Blue water was computed to have peaked at 219*10 6 m 3 in 1989/90, while it fell to a record low (150*10 6 m 3 ) during the 2007/08 drought year. Total green water use ranged between 135*10 6 m 3 in 2007/08 and 368*10 6 m 3 in 2003/04. The irrigated areas occupied 23% of the cropland, but were responsible for 65% of the total national crop production, while consuming 48% of the blue and green water used by crops. The rain-fed areas produced on average 273*10 3 ton/yr, fueled by 277*10 6 m 3 /yr green water. This water may otherwise have returned back to the atmosphere without much local benefit. Climate change projections for Cyprus from an ensemble of six Regional Climate Models, under the medium A1B emission scenario of the UN Intergovernmental Panel on Climate Change (IPCC-SRES), indicated an increase in 10

temperatures and highly variable but slightly lower precipitation amounts for the 2013/14-2019/20 seasons. Two climate scenarios were simulated: (1) a worst case scenario, represented by the seven dry years from the 1980/81-2008/09 record; and (2) a medium scenario made up of three dry years, two average years and two wet years, each with the highest evapotranspiration rates within their class. For both scenarios, irrigation water demand was reduced to 129*10 6 m 3 /yr, as recommended by recent national water management policies, which was achieved by cutting all irrigated crop areas of the 2010 CAPO crop areas by 25%. The computed annual national crop production for 2013/14-2019/2020 was reduced by 41%, on average, under scenario 1 and by 43% under scenario 2, relative to 1980/81-2008/09. These results indicate that within the near future water management policies could be critical for agriculture. Of course, irrigation water supply is likely to be reduced even further by climate change. The modeling analysis also showed high variability in water use for the different crops, communities and years, indicating that there are various options for climate change adaptation. Analysis of two possible climate change scenarios represented by more dry years, higher evaporative demand, and less irrigation water supply, which resulted in a reduction of the 2010 irrigated area by 25%, projected a possible reduction of 41 to 43% in total national crop production for 2013/14-2019/2020, relative to 1980/81-2008/09. Taking into consideration that the value added of crop production is close to 200 million on average the loss of crop production in the period 2014-2020 will reach 574 to 602 million. Regarding the cost of climatic change on Cypriot agriculture and according to the available statistical data it is estimated that on average the value added of crop production is reduced by 4% during the bad years. As bad year is considered a year during which the annual precipitation is below, or far below the average. Given the climate data recorded in the previous three decades it is expected that during the seven year programming period 2014-2020 four years will be bad years with a precipitation below the average. With a value added of crop production approximately 200 million it is expected a total reduction 56 million in the value added of crop production during the seven year programming period. The utility of this estimation is obvious since it supports the fact that the performance of the Cypriot agriculture is permanently and severely affected by bad weather conditions. 11

In order to enforce and support the assessments of climate model it was decided to explore the maximum willingness to pay of residents and especially local farmers, to avoid the negative impacts of climate change. However, it was appropriate to include in the survey a sample group of experts (rather than the farmers themselves) who were considered to have better knowledge of climate change and therefore the estimates will approach better the reality. The survey was based on primary data collected using a questionnaire completed by email. The period of the survey was from May to June 2011, while participating in this focus group 19 experts from Cyprus. In order the survey results to qualify for generalization to the entire population of the area investigated, as potential recipients of the impacts of climate change were faced all local residents of the research area that were considered appropriate people to participate in the research and therefore the generalization was performed on all residents of Cyprus. It results from the analysis of CVM questionnaires (Appendix 3) that the final cost of the impact represents the total cost of climate change and reaches to an annual amount of 71.84 million for the agricultural community and 240.73 million for the total population.therefore, it is expected that in the seven-year programming period 2014-2020 the total cost of climate change on agriculture will reach from 503.0 to 1685 million. It is worth noting that the most significant impact refers to the increasing level of CO2 in the atmosphere and the burden of biodiversity and ecosystems, while the less significant impacts refer to the variability in productivity and diversification of agricultural production and trade of agricultural products. Based on calculations made in the present work it results that the total cost of climate change in the Cypriot agriculture during the seven year period 2014-2020 will reach according to the climate model from 574 to 602 million, and based on the willingness to pay to 503.0-1685 million. Generally, it could be said that the difference between the estimated cost of the model ( 574-602 million) and the willingness to pay ( 503.0-1685 million) to the one hand and the cost of statistical analysis ( 56 million) to the other results from the fact that both the climate model and the willingness to pay estimate apart from the cost of bad weather the extra costs due to the need for a reduction in irrigation water for a sustainable management of water resources. One could say that this is the cost of 12

adapting to climate change, but generally adjustment costs to avoid even higher future costs due to mismanagement of water resources. POLICY RECOMMENDATIONS AND SUGGESTIONS 1. Analysis of the daily climate and precipitation data for the past 30 seasons confirmed the highly variable nature of the climate in Cyprus, both in space and in time. During the past 30 crop seasons in Cyprus a 39% reduction in the harvested areas of vines and fruit trees has been recorded. 2. Crop production is becoming a risky business in Cyprus because agriculture is constraint by a highly variable climate, limited precipitation and high temperatures. The situation is expected to worsen by climate change imposing threats on food security and country s self- sufficiency in basic agricultural products. 3. The irrigated area covers 23% of the land, uses 48% of the total green and blue water and produces 65% of the total annual crop production. Irrigation therefore, has an important effect on reducing the variability in total annual production. 4. There is high variability in water use for the different crops, communities and years, indicating that there are various options for climate change adaptation. For instance, rain-fed crops are very effective users of water. Therefore, under future climate change, it may be wise to allocate some irrigation water to rainfed crops in the drier parts of the island, to ensure their yields during drought periods. 5. The available statistical data verifies and supports that crop production is severely affected by adverse weather conditions and low precipitation. A total reduction of 56 million in the value added of crop production during the seven year programming period should be expected. 6. Under two possible climate change scenarios, represented by more dry years, higher evaporative demand, and less irrigation water supply, a possible reduction of 41 to 43% in total national crop production for 2013/14-2019/2020, relative to 1980/81-2008/09 should be expected. 13

7. The financial support claimed by the EU in the frame of the Mid-Term Programming should take into consideration both the adaptation cost as well as the estimated loss in the value of crop production. The total cost of climate change in the Cypriot agriculture during the seven year period 2014-2020 will reach according to the climate model from 574 to 602 million, and based on the willingness to pay to 503.0 to 1685 million.. 8. Adaptation to climate change should take into consideration the water use efficiency of different crops. In this respect, crops with higher water efficiency and higher water productivity (e.g. rainfed crops, aromatic plants, greenhouse and floriculture crops, etc.) should be promoted through the various rural development interventions. 9. Agricultural research should continuously be focused on climate change in order to be ready to propose alternative crops, methods or adaptation practices. 10. Government services should be properly prepared to face extreme weather conditions, such as prolonged droughts, frequent fire incidents, soil erosion, water and soil salinity, etc. Possible additional infrastructure or equipment should be needed to this direction. 14

Chapter 1 Introduction 1.1 Literature Review The literature review in this section takes into consideration studies related to the direct and indirect impacts of climate change on agricultural activities. More specifically, it refers to the combined impacts of temperature increase and reduced precipitation on crops in terms of increased water requirements, increased evapotranspiration, heat stress, intensification of pests, diseases and herbs and soil degradation (salinity, erosion, fertility), as well as other direct and indirect impacts. The literature review is limited to the Eastern Mediterranean region and especially to Cyprus. The Commission Staff Working Paper Adapting to climate change: the challenge for European agriculture and rural areas, accompanying document to the White Paper on Climate change (2009), summarizes the potential climate change effects for the Southern and southeastern areas (Portugal, Spain, south of France, Italy, Slovenia, Greece, Malta, Cyprus, Bulgaria, and southern Romania) as follows: These regions will experience the combined effect of large temperature increases and reduced precipitation in areas already having to cope with water scarcity and where there is a heavy dependency on irrigation. In the Iberian Peninsula s annual rainfall may drop by up to 40 % compared to current levels by the end of the century. If no effective adaptation takes place, yield decreases could range from 10 % to 30 % (in the long term) possibly creating domestic food supply risks. By 2050, there may be shifts in the suitability of crops (e.g. spring crops) from southern areas to higher latitudes as climate further changes. Adaptation measures, such as more balanced crop rotations by introduction of less water demanding crops, or maintaining levels of soil organic matter, will be necessary to avoid the most dramatic effects (such as the extension and exacerbation of desertification). The study Climate Change and the European Water Dimension (2005) conducted by the Joint Research Centre estimates that the average increase in the observed annual mean temperature across the European continent is 0.8 0 C, while the temperatures during the winter season have in general increased more than during the summer. The report also foresees an annual temperature increase at a rate of between 15

0.2 and 0.6 C per decade over the Mediterranean arc with an increase in the frequency of hot summers and a decrease in the cold winters. The study estimates that the Mediterranean basin has experienced up to 20% reduction in annual precipitation in the last century, while the projections for the 21 st century show further decreases in precipitation over Southern Europe, about 1%. Apart from the Balkans and Turkey, Southern Europe can expect more precipitation in the winter while in the summer precipitation is projected to decrease by up to 5% per decade. It is also very likely that frequencies and intensities of summer heat waves will increase throughout Southern Europe and that intense precipitation events will increase in frequency, especially in winter, and that summer drought risk will increase in southern Europe; it is also possible that gale frequencies will increase. Regarding the adaptation to climate change the study proposes management practices, such as conservation tillage, drip and trickle irrigation, and irrigation scheduling as short-term possibilities for preserving soil moisture. Improving irrigation efficiency by reducing water losses from storage and distribution systems, proper maintenance of irrigation systems, optimizing irrigation scheduling, and using water conservative techniques, such as drip irrigation can combat increased water requirements. Long-term changes include the change of land use to adapt to the new climate in order to stabilize production and to avoid strong inter-annual variability in yields. This could be achieved through the substitution of existing crops with crops with a lower productivity but more stable yields (e.g. wheat replaced by pasture). For areas with increased water stress, it has further been recommended to use less water consuming and more heat resistant crops. Other measures include the change in farming systems since many farms are specialized in arable farming and, therefore, are tightly linked to local soil and climate conditions. In his study Climate Change and Energy in the Mediterranean Henri-Luc THIBAULT (2008) describes the Mediterranean as a hot spot of climate change. He concludes that the Mediterranean, and more especially the Southern and Eastern rim, are and will be more affected by climate change than most other regions of the world in the course of the 21st century. The impacts of the rise in temperatures, the decrease in rainfall, the multiplication of the number and intensity of extreme events and the possible rise in sea level overlap and amplify the already existing pressures of anthropogenic origin on the natural environment. As a result of the accumulated 16

impacts related to temperature, rainfall, the state of the soil and the behavior of animal and plant species he proposes that agriculture and fishing yields are expected to drop. Although the adoption of specific crop management options (e.g. changes in sowing dates or cultivars) may help in reducing the negative responses of agricultural crops to climate change he estimates that such options could require up to 40% more water for irrigation. Henri-Luc proposes that there is high confidence that neither adaptation nor mitigation alone can avoid all climate change impacts. However, the two approaches can complement each other and thus significantly reduce the risks. Adaptation is necessary in the short- and longer-term to address impacts resulting from Mediterranean climate change and that would occur even for the lowest stabilization scenario assessed and agreed upon. Unmitigated climate change would, in the long term, be likely to exceed the capacity of natural, managed and human systems to adapt. Many impacts can be reduced, delayed or avoided through mitigation. In the medium term he proposes as one option for the adaptation of the agricultural sector, water desalination techniques; a development that involves not only a significant fixed cost during the construction of the plants, but also a variable cost, which is not negligible, due to intensive energy use. This solution must then be coupled with investments in energy production, with a total cost at 1.5 US dollars/m 3 /day. A second option requires the construction of barrages for water collection, and thus supplying the crops throughout the year, even when rainfall becomes less frequent and in drought period. However, in the Mediterranean, potential sites are very few and one of the disadvantages of temperature rises is increased evaporation. In the very short term, priority should be granted to an optimal management of water resources and demand. He also suggests the re-use of wastewater, an option with very high fixed costs. On global level, these costs are estimated in the range of 3600 to 5700 US dollars on average, per hectare, in Sub-Saharan Africa, and vary according to the regions. In their study Precipitation and temperature regime over Cyprus as a result of global climate change Giannakopoulos, P. Hadjinicolaou, E. Kostopoulou, K.V. Varotsos, and C. Zerefos (2010), summarize the findings of various studies regarding climate change and assess the impacts of high temperatures, low rainfall, frequency and intensity of extreme events occurrence (such as heat waves and droughts). They 17

conclude that the impacts may critically affect the society and economy of small island countries, like Cyprus. In another study titled: Climate Change impacts in the Mediterranean resulting from a 2 0 C global temperature rise C. Giannakopoulos, M. Bindi, M. Moriondo, P. LeSager and T. Tin (2005) explore the present trends of the Mediterranean climate in terms of temperature and precipitation. Their most important finding is that instrumental data reveal significant trends of Mediterranean temperature and precipitation at different time and space scales. During the last 50 years of the 20th century large parts of the Mediterranean experienced winter and summer warming. For the same period, precipitation over the Mediterranean decreased. According to the study EU agriculture taking on the climate change challenge, conducted by the General Directorate for Agriculture and Rural Development of the European Commission (2008): climate change is now recognized as one of the most serious environmental, societal and economic challenges facing the world. There is clear scientific evidence that high concentrations of greenhouse gases (GHGs) in the atmosphere, due to human activities, are intensifying the natural greenhouse effect thus increasing the Earth s temperature. Concentrations of GHGs, mainly carbon dioxide (CO2), have increased by 70 % since 1970. The study estimates that Europe has warmed by almost 1 C in the past century, faster than the global average. Most of the warming has occurred in the last 50 years a trend that has already had a significant influence on many physical and biological systems (water, habitats, health), which are becoming more fragile. Climate conditions are more variable. Rainfall and snowfall have significantly increased in northern Europe, with floods becoming more common, while in southern Europe rainfall has fallen considerably and there are more frequent droughts. Temperatures have become more extreme. Economic losses due to extreme weather events have increased greatly in recent decades. Since most of the impacts of climate change on agriculture come through water, its shortages will have a major impact on agricultural production and European landscapes. Additionally, as many areas, notably in southern EU countries, have practiced irrigation for hundreds of years as part of their farming tradition, they will need to review irrigation techniques. Therefore, agriculture must also improve its water use efficiency and reduce water losses. The likely rise in the distribution and intensity of existing pests, diseases, and weeds, due to higher temperatures and humidity will affect the level and variability of 18

crop yields and, in the long term, cultivation of several agricultural crops could shift to more northern latitudes. The study estimates that Southern Europe and the Mediterranean basin will experience the combined effect of large temperature increases and reduced precipitation, while climate change will increase regional differences in Europe s natural resources. Already numerous effects of climate change, like advances in tree flowering periods, lengthening of the vine growing season, and changes in other natural plant cycles, are observed. Finally, the study projects that climate change can have an impact on food prices and price stability one of the reasons for recent cereal price increases is the reduction in the EU harvest due, in part, to exceptional bad weather conditions across Europe. A country overview and assessment for The economics of climate change adaptation in EU coastal areas, conducted by the Directorate General for Maritime Affairs and Fisheries, Policy Research Corporation, in association with MRAG (2009) examines the flooding and erosion, freshwater shortage, the measures taken to counteract the problem of water stress and the past, present and future adaptation expenditure due to climate change. According to the study the coastal zones of Cyprus are a valuable and vulnerable area, in which most urban development and economic activity takes place, cover 23% of the total country s area, 50% of total population and 90% of the tourism industry. The most vulnerable part in this regard is the lowlying region of Larnaca located on the south coast of the island. Erosion constitutes a greater threat than flooding especially for the sandy and gravel beaches of the island. At the moment, 38% of the coastline is already subject to erosion, mostly the result of human activities such as beach mining, dam and illegal breakwater construction and urbanization. Climate change could worsen this situation. In 2008 the main issue Cyprus had to deal with is freshwater shortage forcing the country to import water from Greece. The whole of Cyprus suffered from droughts and desertification has started already in certain areas. Rainfall in Cyprus has dropped by about 20% over the past 35 years and the water runoff into reservoirs has declined by 40%. The amount spent to protect the coastal zones of Cyprus against flooding and erosion in 2008 amounted 0.8 million. Over the entire period considered (1998-2015) about 15.4 million will be spent to protect Cyprus against flooding and erosion, not taking into account climate change. The total cost for the Cyprus government to purchase desalinated water from private companies almost tripled in the last decade, from about 19

10 million in 1998 to more than 27 million in 2006. The improvement of village supply distribution networks is estimated at 7.5 million per year, up to 2008. The transportation of water from Greece by tanks cost the country more than 55 million over the period 2008-2009. At the end of October 2008, the European Commission proposed to financially support Cyprus with a single payment of 7.6 million from the European Solidarity Fund to help the island meet the costs of drought related emergency measures. The study concludes that it is difficult to indicate which freshwater supply expenditures are solely made to adapt to climate change and which ones are related to an overuse of the available resources, as Cyprus does not take climate change explicitly into account when defining actions to overcome the problem of freshwater shortage. In his study Climate change as a driver for European agriculture Jørgen E. Olesen (2008) suggests that the consistent increases in projected temperature and different patterns of precipitation with widespread increases in northern Europe and rather small decreases over southern Europe are expected to greatly affect all components of the European agricultural ecosystems (e.g. crop suitability, yield and production, livestock, etc.). He estimates that in southern areas of the EU the disadvantages will predominate while the possible increase in water shortage and extreme weather events may cause lower harvestable yields, higher yield variability and a reduction in suitable areas for traditional crops. These effects may reinforce the current trends of intensification of agriculture in Northern and Western Europe and extensification in the Mediterranean and Southeastern parts of Europe. As agriculture in the Mediterranean region seems to be more vulnerable than in other European regions a considerable effort in research and development to deal with the changes is needed. Jørgen proposes that the projected increase in greenhouse gases will affect agro ecosystems either directly (primarily by increasing photosynthesis at higher CO2), or indirectly via effects on climate (e.g. temperature and rainfall affecting several aspects of ecosystem functioning. In the study impacts of Europe s changing climate, an Indicator-based assessment conducted by the European Environment Agency (2004) refers to Global, Mediterranean and Cypriot climate tendencies due to climate change. According to the study during the last century the climate changed, with precipitation reducing at a rate of 1mm per year, where the temperature increased by 0,5 C. The reduction in 20