Home: Agricultural Economics: ENVIRONMENTAL AND RESOURCE ECONOMICS
BIOGAS TECHNOLOGY AS AN ALTERNATIVE SOURCE OF ENERGY AND A MEANS OF CLIMATE CHANGE MITIGATION IN AGRICULTURE
Threats posed by climate change are causing governments, businesses and individuals alike to re-evaluate and adjust everyday activities. With the aim of achieving a more sustainable natural environment, interest in alternative sources of energy as a means of reducing dependence on fossil fuels has grown. Among other forms of renewable energy such as wind power, solar power and hydro power, energy generation from biogas is also gaining interest. The report provides an overview of biogas generation through the fermentation of organic waste at farm scale as an alternative source of energy supply.
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AN OVERVIEW OF CLIMATE CHANGE AND THE CARBON MARKET WITH SPECIFIC RELEVANCE FOR AGRICULTURE
Due to the significance of climatic conditions for agriculture the sector is expected to be severely affected by climate change. Although its contribution to national emissions is limited in comparison to other industries such as transport, its vulnerability stresses the fact that the sector cannot afford to ignore the phenomenon. This study serves to provide stakeholders in the agricultural sector with an understanding of climate change and the carbon market in order to aid them to position themselves within this context.
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THE POTENTIAL ECONOMIC IMPACT OF INCREASED WATER USER CHARGES AND REALLOCATION OF IRRIGATION WATER
This report traces the impact of increasing irrigation water user charges to save water and the impact thereof on the national economy and the Western Cape economy using the Computable General Equilibrium (CGE) model and Social Accounting Matrix (SAM) constructed by Hassan et al (2008). Two scenarios are investigated in which the water user charge is increased by 50 percent from a base of 2c/m³2. In the first scenario water demand is fixed in agriculture; thus, water needs to be fully uitilised in agriculture. In the second scenario it is assumed that all water does not have to be uitilised. The reality of the scope for movements in water in South Africa is deemed to be situated between the first and second scenarios. In order to put into perspective the impact of an increase in water user charges to manage water demand, it is compared to other available policy instruments. A second set of scenarios is therefore investigated that aims to estimate the impact of an alternative option such as sustained water reallocations away from irrigation agriculture as a way of forcing a reduction in water demand from agriculture. The impact of an increase in water charges to decrease the demand for water from agriculture is then compared to the reallocations by looking at the impact on production, employment, producer and consumer prices, GDP and household welfare. The study finds that none of the scenarios have a clear positive impact. For all four scenarios, the risk profile of agriculture increases, food security may be threatened, national welfare declines, imports of staple foods increase, prices of staple foods increase, household welfare declines and employment in agriculture declines. Except for food security, these adverse effects are least severe in the first scenario in which all water remains used in agriculture. The introduction of irrigation water user charge shocks and reallocations of water should thus be approached with due caution and alternative management approaches should be investigated.
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