N O T E

IFAD-IFPRI Partnership Program - Climate Mitigation ActivityFEBRUARY 2012

2033 K Street, NW, Washington, DC 20006-1002 USA • T: +1-202-862-5600 • F: +1-202-467-4439 • www.ifpri.org

National-level Crop Mitigation Potential for key Food Crops in Vietnam

William Salas, Changcheng Li, Pete Ingraham, Mai Van Trinh, Dao The Anh, Nguyen Ngoc Mai and Claudia Ringler

Vietnam remains a country heavily grounded in agriculture. In 2010, approximately 63% of the working population was active in agriculture. By 2020, the share is expected to still be 59%. The rural areas also harbor the majority of Vietnam’s poor people. At the same time, Vietnam has enjoyed very rapid growth across all major sectors, with overall GDP growth of 6-8% over the last decade. As a result, greenhouse gas (GHG) emissions per capita have increased exponentially. While Vietnam is responsible for a very small share of global greenhouse gas emissions, the country accounts for a significant share of GHG mitigation potential through improved agricultural practices as well as improvements in other sectors. Emissions reductions in agriculture could be a source of millions of dollars a year of income for farmers in the country, which could be used by farmers to adapt to the adverse consequences of climate change.

The importance of agricultural mitigation has recently been affirmed by the Government of Vietnam through Decision 3119 /QD-BNN-KHCN of Dec 16, 2011, which suggests to reduce, by 2020, by 20% total GHG emissions in the agriculture and rural development sector (~19 million tons of CO2 equivalent), while reducing poverty and continue agricultural and economic growth and effectively respond to climate change. While this is a tall order, the country is well equipped to make significant advances in this regard.

This brief is based on a study to assess emissions from the production of key food crops in Vietnam and to assess the potential of alternative mitigation options in agriculture.

National-level emissions from agriculture Vietnam’s Second National Communication to the United Nations Framework Convention on Climate Change (UNFCCC), dated 2010, reports total emissions of 151 million tons of GHG in carbon dioxidec equivalent (CO2e), up

from 104 million tons of emissions in CO2e in 1994, an increase of 6.4%/yr. Fifty-three percent of the total volume of emissions was contributed by agriculture and land use change, down from 69% in 1994. Within the agricultural sector, rice was reported as the major emitter, accounting for 58% of total emissions of 65 million tons CO2e in 2000 (Figure 1), a reduction from the 62% contribution reported in 1994.

This study expands upon the coarse assessment of agricultural emissions in the Second National Communication and also presents a series of climate mitigation options for key food crops in Vietnam. We assess total emissions in for key food crops using the DNDC (DeNitrification-DeComposition) model, a computer simulation model of carbon and nitrogen biogeochemistry in agro-ecosystems, which includes an assessment of changes in methane (CH4), nitrous oxide (N20), and soil organic carbon (SOC), averaged over a 41-year period under

various climate change scenarios1 and taking the spatial variation of soils and crop inputs into account.

Figure 1: GHG emissions from agriculture (%)

11.9 5.3

57.5

21.8

0.9 2.6Enteric fermentation

Manure management

Rice cultivation

Agricultural soils

Burning of savannas

Burning of agricultural residues

Source: Vietnam 2nd National Communication to the UNFCCC.

Results for Crop-level Emissions Across the four scenarios, total food crop emissions vary from 95 to 98 million tons of CO2e. Results for the CNRM Global Circulation Model fall in the middle of that range. Under this scenario, emissions from food crops add to 97 million tons of CO2e, 2.6 times the level reported in the Second National Communication for 2000. As expected emissions were largest for rice (77 million tons of CO2e), followed by sugarcane (9 million tons of CO2e) (Table 1). Emissions per ha are highest for sugarcane, followed by rice.

Table 1: Emissions per ha and total emissions, CO2e, food crops, Vietnam

Ton CO2e/ha million tons of CO2e

Rice 20 77.32

Sugarcane 28 8.68

Maize 7 3.36

Cassava 12 2.96

Peanut 10 2.39

Soybean 17 2.17

Total 96.88 Source: Authors.

The main GHG sources and sinks include change in SOC, CH4and N20. According to our results, SOC is a net sink for all key food crops. Methane is only a major source for rice. Nitrous oxide emissions (converted into ton/kg CO2e) is a major emissions source for sugarcane, followed by soybean and cassava and a minor source for rice.

Alternative Mitigation Options

For rice, we assessed the following alternative agricultural mitigation options: 1) Ammonium sulfate fertilizers (ASF), 2) Alternate wet and dry irrigation (AWD), 3) Biochar, 4) Compost manure, 5) Dry seeding, 6) Improved Nutrient Use Efficiency (NUE) and 7) Straw Manure. Table 2 presents an overview on the implementation of these alternative management practices with DNDC.

Table 2: Alternative Agricultural Mitigation OptionsIntervention Change from Baseline ManagementAmmonium Sulfate Fertilizer (ASF) All fertilizer N applied as Ammonium Sulfate

Alternate Wetting & Drying (AWD)

Flood for 3 days every 7 days (3 days flooded, 4 days drained rotation)

Biochar Apply 5,769 kg/ha (3000 kgC/ha) biochar (C:N = 219) at planting in addition to farmyard manure

Compost Manure Exchange farmyard manure for compost (C:N = 30)

Dry SeedingFlood 5 days after planting; flood for approximately 30 days, AWD for approximately 30 days, then flood for approximately 21 days

N-use Efficient Variety (NUE)

Plant tissue C/N (root, stem and leaf, and grain) increased 25%

Straw Manure Exchange farmyard manure for straw (C:N = 50)Source: Authors.

For all mitigation scenarios we assume a 100% adoption across the crop area and report 41-year average results under the CNRM A2 climate change scenario. Figures 2 and 3 present changes in GHG emissions and rice yields, and changes in emissions for upland crops, respectively. For rice, dry seeding and AWD provide the largest emission reduction benefits but yields also slightly decline. Yields increase under ASF, NUE and straw manure. For upland crops, NUE is beneficial for most crops and yields changes (not shown) are always positive. Here, ASF increases emissions considerably, and biochar leads to small emission increases.

Figure 2: Changes in GHG emissions and yields, rice, alternative mitigation strategies, compared to baseline (CNRM scenario) (%)

1 These four climate change scenarios are 1) CNRM-CM3 – Météo-France/Centre National de Recherches Météorologiques, France; 2) CSIRO-Mk3.0 – Commonwealth Scientific and Industrial Research Organization (CSIRO) Atmospheric Research, Australia; 3) ECHam5 – Max Planck Institute for Meteorology, Germany; 4) MIROC 3.2, medium resolution – Center for Climate System Research, University of Tokyo, National Institute for Environmental Studies, and Frontier Research Center for Global Change (JAMSTEC), Japan, all running the A2 scenario. Additional information on the climate scenario data can be found in Nelson et al. (2010).

-100

-80

-60

-40

-20

0

20

40

-10

-8

-6

-4

-2

0

2

4yield change (line) emissions change (column)

Source: Authors.

Figure 3: Changes in GHG emissions for upland crops, alternative mitigation strategies, compared to baseline (CNRM scenario) (%)

-15

-10

-5

0

5

10

15

20

25

30

Peanut Soybean Maize Cassava Sugarcane

Ammonium Sulfate Fertilizer Biochar N-use Efficient Variety

Source: Authors.

Table 3: Emission Reduction Potential by crop and mitigation option

Emission Reduction Potential Mitigation Option

Rice 81.2 AWD or NUE Peanut na naSoybean 8.6 NUEMaize 10.4 NUECassava 4.3 NUESugarcane 8.0 NUE

Source: Authors.Costs and Benefits of Implementing Alternative Mitigation Options

Figure 4: Rice AWD: Potential for emission reductions (million tons CO2e) and income from carbon payments ($/CO2e/ha)

0.00.51.01.52.02.53.03.54.04.55.0

0

100

200

300

400

500

600

700

800

Tra VinhSoc Trang

Bac LieuHau Giang

Ca MauKien GiangTien Giang

Ben TreCan Tho

Hai DuongVinh Long

Ho Chi Minh …Long An

Dong ThapBa Ria-Vung …

An GiangBinh PhuocHai Phong

Bac NinhDong NaiPhu Yen

Dac NongBinh DinhTay Ninh

Quang NgaiQuang NamBinh ThuanKhanh Hoa

Binh DuongNinh Thuan

Gia LaiDa Nang Dak Lak

Lam DongHa Tinh

Kon TumThanh HoaNinh Binh

Ha TayNam DinhHung YenThai BinhNghe AnHa Nam

Ha NoiLai Chau

Thua Thien -…Cao Bang

Quang BinhQuang TriHa GiangDien Bien

Lao CaiBac Kan

Son LaQuang Ninh

Vinh PhucYen Bai

Lang SonTuyen Quang

Hoa BinhBac Giang

Thai NguyenPhu Tho

Total emission reduction (million ton CO2e)

$/ha payment for emission reduction

Source: Authors.Payments from carbon markets for crop-level mitigation are generally small (for example, $10 per ton carbon sequestered or emissions reduced). Figure 4 presents the potential per ha payment from carbon markets for AWD in rice across the provinces in Vietnam as well as the total mitigation potential for AWD for each province. The figure shows that per ha mitigation potential and thus carbon

payments per hectare is lowest in the Mekong Delta (Tra Vinh, Soc Trang and Bac Lieu) with payments of $12-13 per hectare rice for AWD and largest in the highland provinces of Thai Nguyen and Phu Tho with potential payments of $670 and $700. On the other hand, total mitigation potential for AWD rice is largest in Bac Giang, Nghe An and Thai Binh provinces and smallest in Dac Nong.

Given that payments in the major rice-producing areas of Vietnam would likely be rather modest, it is important that mitigation activities do not only not compromise crop yields, but also do not reduce net farm profits, at least not beyond potential benefits from mitigation.

For Vietnam as a whole, we found that AWD could increase annual net farm incomes across Vietnam by $41 million from yield improvements and by a further $627 million from carbon payments (see Figure 5). Higher net profits from agricultural production are due to reduced irrigation water applications under this mitigation option, which more than compensate for slightly lower yields. Carbon benefits are similarly large for dry seeding ($628 million), but production benefits are lower (by $247 million) due to lower crop yields despite cost savings from reduced irrigation applications.

For ammonium sulfate, annual net returns are $431 million for changes in production and $43 million for changes in emissions. Applying ammonium sulfate instead of urea results in higher production costs (40%-increase in fertilizer costs), which is more than compensated for by higher crop yields.

Figure 5: Changes in net profit (from both agricultural production and carbon payments), alternative mitigation options, Vietnam rice area, compared to baseline

-500

0

500

1,000

1,500

2,000

AWD Ammonium sulfate

Biochar Compost manure

Dry seeding

Change in benefit from carbon marketChange in benefit from production

US$

mill

ion

Source: Authors.

Finally, biochar significantly increases crop yields over the 41-year modeling period, particularly in the Mekong River Delta. Compost manure is cheaper than farmyard manure but yield declines more than outweigh benefits from lower production costs. Annual carbon market benefits of $108 million are insufficient to make up for income declines from lower production.

No data was available on the increase in net benefits for increased nutrient-use efficiency, as we assumed this to be achieved through a new plant variety that is not yet available on the market. However, the assumption is that increased NUE would reduce costs through reduced fertilizer application requirements, which is of great benefit not only to the environment, but also to farmers that face increasing fertilizer prices as a result of growing oil scarcity. Carbon market benefits from NUE are estimated at a low $6 million per year.

Emissions, Mitigation and Poverty Alleviation Targeting agricultural mitigation benefits to smallholder farmers requires to identify those areas that harbor the highest emissions and highest mitigation potential as well as the largest poverty concentration.

Figure 6 presents the concentration of poverty and staple crop emissions across Vietnam. Poverty (number of poor per km2) is concentrated in the Mekong and Red River Deltas. These same areas also have the highest GHG emissions, chiefly from rice production. We also find that the potential for crop-based mitigation is largest in these two deltas, with small nuances depending on the mitigation option chosen.

Conclusions and Policy ImplicationsWhile Vietnam’s emissions are relatively low in a global context, they are growing rapidly and will likely triple by 2030 unless significant mitigation options are undertaken.

Agriculture contributes most to GHG emissions in Vietnam, but the sector will soon be outpaced by emission increases in the energy sector. Nevertheless, agriculture has an important role to play in reducing emissions, particularly if smallholder farmers can obtain economic benefits from implementing emission reductions by linking to global carbon markets.

Of particular importance, most emission reduction options can be applied at little cost, lead only to small yield reductions or actual yield increases, and can help farmers adapt to climate change. AWD, for example, can save irrigation water and energy use through reduced pumping; resources that are expected to become increasingly scarce. Similarly, dry-seeding can reduce labor costs and save irrigation water while reducing GHG emissions.

Figure 6: Poverty concentration (number of people below $2/day and emissions from staple crops (including all 6 crops studied), Vietnam

Source: Authors.

However, the crop-level mitigation potential differs by sub-region, mitigation option and crop. While our results need further study and analysis, they provide a first glimpse at the great variation across the provinces in Vietnam.

We find that overall the mitigation potential is largest with rice and largest in those areas that harbor most of the poor people ($2 PPP poverty) in the country.

The importance of agricultural mitigation for Vietnam has been affirmed by the Government Decision 3119 /QD-BNN-KHCN of Dec 16, 2011, which expressly works toward reducing agricultural emissions while enhancing economic growth and reducing poverty. Our analysis has shown that the potential for mitigation is significant but needs careful assessment regarding yield, production and other environmental impacts.

William Salas, Changcheng Li, and Pete Ingraham are Vice-President and President at DNDC Applications, Research and Training and research scientist at Applied GeoSolutions, respectively; Mai Van Trinh is Vice Director at the Institute for Agricultural Environment; Dao The Anh and Nguyen Ngoc Mai are Director and Senior Researcher, respectively at Centre for Agrarian Systems Research and Development (CASRAD), Vietnam Academy of Agricultural Sciences, and Claudia Ringler is a Senior Research Fellow, International Food Policy Research Institute

This project note has been prepared as an output for the “Strategic Partnership to Develop Innovative Policies on Climate Change Mitigation and Market Access” and has not been peer reviewed. Any opinions stated herein are those

of the authors and do not necessarily reflect the policies or opinions of IFPRI.Copyright © 2012. International Food Policy Research Institute. All rights reserved. To obtain permission to reprint,

contact the Communications Division at ifpri-copyright@cgiar.org.