Economic Impacts of a Low Carbon Economy on Global Agriculture: The Bumpy Road to Paris

Hans Jensen, Ignacio Perez Dominguez (), Thomas Fellmann, Paul Lirette, Jordan Hristov and George Philippidis
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Hans Jensen: Joint Research Centre, European Commission, 41092 Seville, Spain
Paul Lirette: Research and Analysis Directorate, Agriculture and Agri-Food Canada, Ottawa, ON K1A 0C5, Canada

Sustainability, 2019, vol. 11, issue 8, 1-17

Abstract: Limiting climate change below a 2 °C temperature increase this century will require substantial reductions of greenhouse gas emissions and the transition to a climate-friendly, low carbon society. In this paper, the economic impact of a less carbon-intensive economy on agricultural markets is estimated by means of an integrated modelling framework. First, the macroeconomic impacts of moving into a global low carbon economy are analysed by applying different carbon taxes in a general equilibrium modelling framework. Second, the potential adoption of emission mitigation technologies is quantified and used in the Aglink-Cosimo model to assess the impacts on agricultural markets of emission mitigation scenarios compatible with the 2.0 °C target prescribed in the Paris Agreement. Results for 2030 show reductions in global non-CO 2 GHG emissions from agriculture (i.e., methane and nitrous oxide) by 10, 16 and 19% in 50, 100 and 150 USD/t CO 2 eq global carbon tax scenarios, respectively (Least Developed Countries excluded). Only between 0.6% and 1.3% of the global reduction is caused by indirect macroeconomic effects, although at the regional level they can cause up to 5.8% of the reduction in agricultural emissions. Results suggest that ambitious mitigation targets can provoke significant negative impacts on agricultural production and underline the importance of integrating GHG emission developments and impacts of related policies into agricultural market projections.

Keywords: Paris Agreement; climate change mitigation; agricultural sector; market outlook; Aglink-Cosimo (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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