Opt-in of the agricultural sector to the European trading scheme for greenhouse gas emissions – a proposal and its possible effects

In light of international discussions on a possible opt-in of the agricultural sector to the current European emission trading system for greenhouse gases, the objective of this article is to present a feasible implementation strategy for a market of emission permits in European agriculture and to simulate its economic effects within the regionalised agricultural sector model CAPRI. With this purpose, we compare the effects of a 15% reduction of greenhouse gas emissions from European agriculture with and without a trading scheme. Our findings suggest that if significant emission abatement is to be achieved in the agricultural sector, efficiency gains from expanding the current emission trading scheme to this sector can be appreciable. An additional finding of this paper is that under the current protective measures in the CAP and in the absence of a successful WTO reform round, emission reduction does not result in a net income loss for the agricultural sector due to the ‘quota effect’ caused by the isolation of European agricultural markets from world markets.


Variant title:
Teilnahme des Agrarsektors am europäischen Emissionshandelssystem für Treibhausgase – ein Vorschlag und mögliche Auswirkungen
Issue Date:
2007
Publication Type:
Journal Article
DOI and Other Identifiers:
ISSN 0002-1121 (Other)
PURL Identifier:
http://purl.umn.edu/96766
Published in:
German Journal of Agricultural Economics, Volume 56, Number 8
Page range:
354-365
Total Pages:
12




 Record created 2017-04-01, last modified 2017-08-25

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