have changed over time. In general, sectors other than energy and gases other than CO2 are less important sources of emissions. However, in some countries emissions from agriculture are an important source of total emissions and this affects the composition of greenhouse gases by type of gas.

More than half of the methane and more than 80 percent of the nitrous oxide released into the atmosphere by human activities originate in agriculture. Both are potent greenhouse gases, with a ton of methane equivalent to 23 tons of carbon dioxide and a ton of nitrous oxide equivalent to 296 tons of carbon dioxide in the short run. Consequently some types of agricultural activities, especially those related to how manure and other agricultural wastes are managed, have a disproportionate effect on aggregate greenhouse gas emissions from the sector. Consequently agriculture is a significant contributor to GHG emissions in places like Albania, Georgia and Tajikistan, where methane and nitrous oxide emissions are relatively high. (See table 5.) A key characteristic of the region has been the structural realignment of the region‘s economies. This is reflected in the changing composition of emissions by sector and by the type of gases emitted. Figure 3 shows the relationship between agricultural income, methane and nitrous oxide. Figures 4 and 5 show how the composition of emissions changed between 1990 and 2005. Figure 4 shows the percentage change by country by type of gas and figure 5 shows the same type of information by emitting sector.<sup>2</sup> The two are related. For example, figure 4 shows that carbon dioxide emissions fell by nearly 50 percent in Albania while methane and nitrous oxide emissions rose. Figure 5 shows that emissions from the energy fell significantly – a sector that mostly emits CO2 – while emissions from agriculture – a sector that produces significant quantities of methane and nitrous oxide emissions – grew.

# **III. Mitigation opportunities**<sup>**3**</sup>

In this section we examine potential mitigation opportunities for agriculture in the ECA region. Broadly, mitigation potential is an economic concept associated with the cost of sequestering greenhouse gases or avoiding greenhouse gas emissions. It is a key feature of mitigation assessments, including those produced by the Intergovernmental Panel on Climate Change (IPCC)<sup>4</sup> . Mitigation opportunities are calculated against a counter-factual scenario, usually a forward-looking projection based on a continuation of existing practices and policies. The assessments often rely on models built up from estimates of the costs of deploying different production technologies, shifting consumer preferences, and encouraging activities that permanently store greenhouse gases. Typically, this results in a schedule, called a marginal abatement cost (MAC) curve, that relates feasible mitigation opportunities with a range of ―carbon prices,‖ where the prices of carbon indicates a value that would cover the investment and other costs associated with marginal reductions in emissions visà-vis a baseline counter-factual.

In 2007 the IPCC reviewed projections across a range of modeling efforts to assess potential sources of mitigation by sector (Barker et al., 2007). Table 6 summarizes the report‘s assessment of mitigation opportunities at US$20 per tCO2e.<sup>5</sup> The assessment reports that global mitigation opportunities are greatest in the building, industry and agricultural sectors. Moreover, the report concludes that most energy-saving efforts in the building sector are ―win-win‖ opportunities – that is, investments related to the identified improving energy efficiencies in buildings would be profitable without additional carbon payments. Because

> 2 Gases of all types are expressed in terms of CO2 equivalents.

> 3 This section draws partly on material published in Larson, Dinar and Aapris (2011).

> 4 The IPCC is a scientific body, established by the United Nations Environment Program and the World Meteorological Organization, to develop an expert view about the causes and consequences of climate change.

> 5 By convention, measures of greenhouse gas emissions cover the six Kyoto Protocol gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). Aggregate emission and mitigation amounts are expressed in terms of CO2e, the amount of CO2 needed to produce the same global warming potential.

4