The Impact on the Environment

The GHG emission reduction policies may also impact the environment. For example, in the energy sector, hydropower development can affect the environment and ecosystems at the construction site. In the AFOLU sector, emission reduction policies often affect land availability and competition, while land developers may have different perspectives on the importance of ecosystem services. Policies to increase food production may reduce environmental services. Policies to reduce GHG emissions from the agricultural sector often have positive impacts as can be seen in countries that have suffered from declines in water quality and ecology, and sedimentation. These losses can be reduced by implementing conservation tillage measures that will provide benefits in terms of land recovery, or will limit soil erosion. Other positive externalities of GHG reduction policies are changes in farming practices to cause an increase in organic matter in soil, improve the water holding capacity of the soil and reduce the need for irrigation; increased organic matter in the soil can improve soil fertility, which reduces the need to use inorganic fertilizers; conversion from farmland to grassland or forest land can improve the habitat of wildlife and biodiversity protection; restriction of fertilizer use can reduce the nutrient content of the overflow from agricultural land, thereby improving water quality and reducing the shortage of oxygen in rivers, streams, lakes and aquifers. These changes will improve the characteristics of the water used for non-agricultural activities in the area.

However, besides the positive impacts, the greenhouse gas emission reduction policies in the AFOLU sector can also create externalities costs that are not small, as in some cases, reducing the intensity of arable land use requires the use of more pesticides to control weeds, fungi and insects. In addition it requires additional energy for synthesis, production and application. These activities also have negative impacts on the ecosystem, flow and water quality.

Reducing Costs and Losses from Climate Change Impacts

The adoption of policies to reduce GHG emissions help to avoid the risks of climate change. Such risks include reduced potential crop yields in most tropical and subtropical regions due to the increase in temperature; reduced and changed crop yields in most regions at mid-latitudes due to the increase in average annual temperature; reduced water supplies in areas of water scarcity, especially in the subtropics; increases in the number of people exposed to vector-borne diseases (such as malaria) and water-borne diseases (such as cholera) and mortality due to heat stress (heat stress, mortality); increases in the risk of widespread flooding of many residential areas due to increased rainfall and sea level rise; and increased energy demand for cooling due to higher temperatures in the summer. The implementation of GHG reduction policies in these areas will help to avoid the costs or potential losses that are caused by climate change impacts.

The Social Impact

Social costs to operate and monitor the climate change and reduction of GHG emission programs are often not small, and include labor costs, raw materials, project implementation costs, the cost of raising awareness and compliance with emission standards, the energy accounting program, reducing emission labeling, etc. In case the costs are not included in these specific GHG emission reduction measures, they should be regarded as a form of external costs. Normally, the costs of GHG emission reduction activities are often much higher if they are calculated fully.

As the above analysis shows, to reduce GHG emissions from different sectors, in addition to calculating the direct costs for reducing emissions, there is a need to assess carefully the effects of the policy of emission reduction, especially the negative externalities; these are the indirect costs to be paid in reducing GHG emissions. The choices of priorities, plans and measures to reduce GHG emissions in accordance with the actual conditions of each country require consideration and full evaluation of all of the externalities.

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