Climate change interactions with agriculture, forestry sequestration, and food security

We evaluate the impacts of using carbon taxes and forest carbon sequestration to achieve 50% emission reductions. We consider four cases – carbon tax-only, combination of a carbon tax and equivalent sequestration subsidy, and the inclusion of crop yield shocks due to climate change in both policies (with 50% emissions reduction). We developed a new version of a computable general equilibrium model to do the analysis. We find that the tax/subsidy case causes substantial increases in food prices because of land competition between forest sequestration and crop production. When the climate induced yield shocks are added, the food price increases are huge – so large that it is clear this approach could not be adopted in the real world. We also compare a case with no mitigation and crop yield shocks appropriate for that case. The results suggest economic well-being falls more in that case than with 50% emission reductions.

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Conference Paper/ Presentation
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JEL Codes:
Q15; R52; Q54
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 Record created 2017-04-01, last modified 2017-08-29

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