Watershed Investments for Food Security and Climate Change Adaptation: 2020 Budget Insights from Malawi

The United States’ withdrawal from the Paris Climate Agreement came as no surprise last week but takes fresh measure of the distance between a sweeping global consensus on climate breakdown and U.S. government willingness to address it.

The Intergovernmental Panel on Climate Change (IPCC) land use report was hailed as its most political pronouncement to date back in August, while a burning Amazon backlit the G7. September gave rise to climate strikes in 163 countries leading up to the UN Climate Change Action Summit. It also revived a Senate that couldn’t manage to pass a budget, forestalling another government shutdown for eight weeks instead. The Continuing Appropriations Act expires on November 21.

Under an administration that has all but banned the term “climate change,” the state of foreign assistance for environmental protection in 2020 is decidedly less grim. While overall Foreign Operations budgets from both chambers of Congress offer modest increases over 2019 enacted levels, environmental programs are poised for a much more prodigious expansion. The House topped up global environmental spending by 77 percent back in June. The Senate committee bill goes further still, nearly doubling 2019’s $501 million to $950 million. Either appropriation would bring levels back in line with the previous administration’s environmental funding, which peaked at $1.7 billion in 2016 but held closer to $850 million in other years of Obama’s second term.

Both bills earmark over half of environmental resources for three directives: $135 million for sustainable landscapes, $177 million for adaptation, and $179 million for renewable energy. What do these types of investments look like in practice? How do they overlap? And what does the best evidence tell us about maximizing outcomes for food and energy security alongside environmental goals?

The tolls of too little water, too much, or the right amount at the wrong time are equally unforgiving to subsistence agriculture and those who rely on it.

A changing climate in many food insecurity hotspots has led to mounting water scarcity and increasingly volatile rainfall patterns. It is not uncommon for drought-impacted areas to simultaneously grapple with flash flooding on a more frequent basis. The tolls of too little water, too much, or the right amount at the wrong time are equally unforgiving to subsistence agriculture and those who rely on it.

Globally, just a fifth of all cultivated land is irrigated, but that share produces 40 percent of the food we grow. Absent irrigation, we would need an additional 500 million hectares of land to match current production, but the IPCC report is unequivocal that we don’t have a fraction of that to spare. Today’s land use decisions will drive climate outcomes for decades to come, and we also know that afforestation and reforestation have the greatest potential to remove carbon from the atmosphere. The expansion of efficiency-maximizing irrigation, then, is a keystone investment to freeze the footprint of agriculture in low-yield environments, to halt and reverse deforestation, and to evade the most dire consequences of climate systems breakdown.

The lowest proportion of irrigated farmlands is found in Sub-Saharan Africa—just 3 percent on average across the continent. Much of the region has also endured alarming rates of deforestation, in part because growing smallholder communities find that survival requires pushing further and further into marginal lands. New CSIS research investigates watershed management challenges at the agriculture-energy nexus in Malawi.

The expansion of efficiency-maximizing irrigation is a keystone investment to freeze the footprint of agriculture in low-yield environments, to halt and reverse deforestation, and to evade the most dire consequences of climate systems breakdown.

Malawi’s Watershed Crisis Drifts across Its Agricultural and Energy Sectors

One of Africa’s poorest countries, Malawi has long been the recipient of U.S. investments in line with the three environmental directives for 2020 foreign assistance outlined above—sustainable landscapes, adaptation, and renewable energy. Agricultural development has been another focus; the majority of Malawians make a living as farmers.

The impacts of recent water system shocks and stressors in this small country offer outsized lessons for a shared future of resource scarcity and volatility. In 2016, Malawi and the greater region were struck by severe drought that decimated crops and left millions in need of emergency humanitarian assistance. This past March, the same southern areas most impacted by drought were battered with heavy rains and floods that affected over 900,000 people, many in hard to reach areas. But city dwellers are not immune to watershed challenges: in 2017, the army stepped in to halt deforestation that was threatening the capital’s water supply.

Chronically low yields and a growing population propel an ever-expanding agricultural footprint. Nationwide, Malawi produces about two metric tons of its staple crop, maize, per hectare. Maize yields in the United States are over five times higher. Global Forest Watch estimates that Malawi lost 11 percent of its tree cover between 2001 and 2018 alone. The southern district of Thyolo, near Blantyre, lost fully a quarter of its trees over that period while 85 percent of its lands have been pressed into agricultural service. The lack of forest cover contributes to extreme watershed fluctuations, intensifying the human and economic costs both when there is too much water and when there is too little.

The spillover effects of watershed management also ripple across the energy sector in remote areas where poverty runs deepest. Hydropower generates nearly the entire national electric supply, while just 4 percent of rural households have access. Low water levels have led to production declines of up to 40 percent, resulting in load shedding for up to 16 hours per day—for months. Production shortfalls could soon approach 67 percent, crippling businesses large and small.

In September, CSIS met with experts across Malawi to learn about watershed challenges and ongoing initiatives to tackle them. Conversations about a new irrigation scheme, the World Bank-supported Shire Valley Transformation Project, illuminated how canal access for smallholders combined with a new land legal framework should allow vulnerable households to move out of the lowest-lying areas, avoiding future flood shocks. The canal’s first stage will extend from the river, through smallholder communities, to reach a 13,000-hectare sugar estate, Illovo. Illovo representatives explained to CSIS that the volume of river sedimentation is enormous because catchment areas have become so denuded of trees. The firm has three permanent excavators to desilt the intakes of existing canals. Two pumps have been destroyed from silt loading. Estate managers expressed frustration that yields have declined from 110 tons per hectare to between 80 and 85 because of insufficient water and energy at the times it is most needed.

On the energy side, the Millennium Challenge Corporation (MCC) closed a $350 million compact in 2018 that provided support for electricity production, transmission, and sectoral reform. The project included the modernization of one hydropower plant and environmental investments across the Shire River Basin. Like irrigation infrastructure, electricity production has been severely compromised by siltation, which chokes and damages turbines while reducing water storage potential. Seeking to minimize costly disruptions, MCC provided grants for projects designed to curtail soil erosion in high priority catchments. It also attempted to establish an environmental trust to continue financing initiatives and institutions that work to improve land-use practices, but this effort is ongoing.

Widespread deforestation and river siltation have clogged Malawi’s agricultural and energy economies. With the highest population density in the region; extensive farming in sloped, marginal, and riverbank areas (as well as in riverbeds); and an unflagging demand for charcoal, how can governments and donors best support conservation and replanting in service of broader development goals?

Seeing New Forests through the Trees

Last month, the Nobel Prize in Economics recognized three individuals for pioneering a randomized control trial approach to the measurement of international development investments. Their collective efforts have shaped a global surge in evaluations that carefully parse the benefits, and the shortcomings, of expensive programs. Such studies are hugely important for individual project design, but it is their incorporation into public policy that drives impact at scale.

Three recent evaluations of this ilk offer lessons for watershed restoration policy:

  • In Uganda, researchers offered payments to landowners in some villages not to cut forest trees on their properties. In other villages, no financial incentives were provided. Over the course of the study, landowners without a financial incentive cleared more than twice as much land as those who were paid (9 percent vs. 4 percent of total land). When cutting down trees is an economic necessity, education is not enough to stop it.

  • In Malawi, researchers introduced a tree planting program that paid landowners based on seedling survival. Some participants were selected randomly while others joined through an auction process. Those assigned to the auction bid the lowest fee they would accept to participate. The set of individuals with the lowest bids were enrolled in the program. All participants across groups then received the same payment structure. As the study progressed, participants who had self-selected through the auction had 15 percent more surviving trees than those chosen randomly. What’s more, the survival gap between groups grew over time - by the end, the auction group had 33 percent more surviving trees. This suggests that the early revelation of preferences can spur more effective program allocations than random assignment. Partner and participant targeting matters to maximize outcomes, and it matters a lot.

  • In Kenya, researchers explored barriers to adopting efficient charcoal cookstoves among urban households. Efficient cookstoves use 40 percent less charcoal than older designs, with annual savings adding up to a month of extra income for this set of consumers. In cutting demand for fuel, they also have the potential to save a lot of trees. Low uptake of this money-saving technology, researchers imagined, could be driven by the inability to cover the front-end cost or by inattention to future savings relative to that cost. They found that credit constraints best explained observed behavior. When offered loans to pay for new stoves over three months, consumers were willing to reallocate the full amount of their savings from reduced charcoal purchases to the product cost, effectively more than doubling what they were willing to pay for new stoves without a loan. Again, knowledge alone is insufficient to drive behavior change, and resource consumption shifts may best be catalyzed with both supply- and demand-side approaches.

Public watershed management challenges in much of the world spring from the self-interested economic interdependencies of farmers, ranchers, forest product suppliers, rural and urban fuel consumers, and others. But handwringing over a latter-day Tragedy of the Commons would be misplaced, as is perhaps any invocation of Hardin at all. While the focus of public policy on individual and group incentives is, in fact, essential, such incentives extend beyond zero-sum profiteering.

Esther Duflo recently became just the second woman to win a Nobel Prize in Economics. The first, in 2009, was Elinor Ostrom. Ostrom was elevated for her work explaining how ordinary people were capable of governing common resources in an equitable and sustainable manner. In her Prize Lecture, Beyond Markets and States, she implored policymakers to broaden the parameters of their mandate:

Designing institutions to force (or nudge) entirely self-interested individuals to achieve better outcomes has been the major goal posited by policy analysts […]. Extensive empirical research leads me to argue that instead, a core goal of public policy should be to facilitate the development of institutions that bring out the best in humans. We need to ask how diverse polycentric institutions help or hinder the innovativeness, learning, adapting, trustworthiness, levels of cooperation of participants, and the achievement of more effective, equitable, and sustainable outcomes at multiple scales.

In other words, let us not always seek to solve the problems of rigid self-interest with the solutions of rigid self-interest. Increased U.S. foreign assistance to bolster sustainable landscapes and climate change adaptation has the potential to heed Ostrom’s charge. Vulnerable communities across Malawi are poised to reap material short- and longer-term benefits from such investments, as are countless others who have never tasted the profits of a carbon-intensive economy.

In finalizing the 2020 Foreign Operations budget, Congress should proceed with the confidence that environmental sector assistance accelerates progress toward aid independence while safeguarding a better future for rich and poor countries alike. The American Interest could hardly find a better definition.

Reid Hamel is a senior associate with the Global Food Security Project at the Center for Strategic and International Studies in Washington, D.C.

This report is made possible by the generous support of the Bill & Melinda Gates Foundation.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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Reid Hamel