1887

OECD Food, Agriculture and Fisheries Papers

Selected studies on various food, agriculture and fisheries issues from the OECD Trade and Agriculture Directorate.

NB. No. 1 to No. 58 were released under the previous series title OECD Food, Agriculture and Fisheries Working Papers.

English

Policy strategies and challenges for climate change mitigation in the Agriculture, Forestry and Other Land Use (AFOLU) sector

This study uses GLOBIOM ‒ the most detailed global economic model of agriculture, land use and greenhouse gas (GHG) emissions ‒ to assess the effectiveness of different policies in cutting net emissions from the Agriculture, Forestry and Other Land Use (AFOLU) sector, with a view to helping limit long-term global temperature increases to 1.5°C and 2°C. Trade-offs between emission reductions and impacts on food producers, consumers and government budgets are also evaluated for each policy package. A full complement of policy options is deployed globally across AFOLU, comprising emission taxes for emitting AFOLU activities and subsidies rewarding carbon sequestration. Using a carbon price consistent with the 2°C target (1.5°C target), this is projected to mitigate 8 GtCO2 eq/yr (12 GtCO2 eq/yr) in 2050, representing 89% (129%) reduction in net AFOLU emissions, and 12% (21%) of total anthropogenic GHG emissions. Nearly two-thirds of the net emission reductions are from the Land Use, Land-Use Change and Forestry (LULUCF) component of AFOLU, mostly from reduced deforestation. A global carbon tax on AFOLU is found to be twice as effective in lowering emissions as an equivalently priced emission abatement subsidy because the latter keeps high emitting producers in business. However, a tax has trade-offs in terms of lower agricultural production and food consumption, which a subsidy avoids. A shift to lower emission diets by consumers has a much smaller impact on reducing agricultural emissions than any of the policy packages involving taxes on emissions.

English

Keywords: Paris Agreement, Abatement subsidy, GHG emission tax
JEL: Q18: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Agriculture / Agricultural Policy; Food Policy; Q56: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth; F18: International Economics / Trade / Trade and Environment; C61: Mathematical and Quantitative Methods / Mathematical Methods; Programming Models; Mathematical and Simulation Modeling / Optimization Techniques; Programming Models; Dynamic Analysis; Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming; Q58: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Government Policy; Q11: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Agriculture / Agriculture: Aggregate Supply and Demand Analysis; Prices
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