Assessing uncertainty in the cost-effectiveness of agricultural greenhouse gas mitigation

Information on the uncertainty of quantitative results feeding into public decision making is essential for designing robust policies. However, this information is often not available in relation to the economics of greenhouse gas (GHG) mitigation in agriculture. This paper analyses the uncertainty of the mitigation estimates provided by a Marginal Abatement Cost Curve (MACC). The case study is based on the GHG MACC developed for Scottish agricultural soils. The qualitative assessment disentangled the different sources and types of uncertainty in the cost-effectiveness analysis of GHG mitigation options. The quantitative assessment estimated the statistical uncertainty of the results by propagating uncertainty through the model, using three uncertainty scenarios. The results show that the uncertainty in the economically optimal abatement in Scottish agricultural soils is high with the medium and high uncertainty scenarios, with the ratio of the 95% CI to the mean being 0.57-1.01 and 0.98-1.4, respectively, while the low uncertainty scenario resulting in a ratio of the 95% CI to the mean of 0.24-0.68. However, the ranking of the measures are relatively robust with all three uncertainty scenarios, especially in terms of which options have cost-effectiveness below the carbon price threshold.


Issue Date:
2014-04
Publication Type:
Conference Paper/ Presentation
Record Identifier:
http://ageconsearch.umn.edu/record/170784
PURL Identifier:
http://purl.umn.edu/170784
Total Pages:
17
JEL Codes:
Q54




 Record created 2017-04-01, last modified 2018-01-22

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