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Abstract
Agriculture in Ireland accounts for a higher proportion of greenhouse gas (GHG)
emissions than in any other EU member state. Furthermore as part of the EU’s
commitment to reduce emissions by 20 percent by 2020, Ireland is one of the few
countries who will have to cuts its 2005 GHG emissions level by the full 20 percent.
Given the magnitude of the cut in national emissions that is required and the size of
agriculture’s contribution to Ireland’s total emissions, the agriculture sector has been
identified by some parties as a sector that could make a significant contribution to
achieving the national target. In order to evaluate the impact on Irish farmers of
reducing GHG emissions it is necessary to first estimate the marginal cost of
emissions abatement. This paper uses Irish farm-level data to construct a linear
programming model which in turn is used to estimate the marginal abatement cost
curve for GHG emissions on Irish farms and this is aggregated to estimate a marginal
cost curve for the agriculture sector. The impact of an emissions tax in achieving
targeted levels of GHG emissions will be measured under a baseline scenario of no
policy change.