EconPapers    
Economics at your fingertips  
 

Effects of a carbon tax in the United States on agricultural markets and carbon emissions from land-use change

Jerome Dumortier () and Amani Elobeid

Land Use Policy, 2021, vol. 103, issue C

Abstract: There is increased interest in a carbon tax in the United States (U.S.) and policy makers, farmers, and other stakeholders need to understand the various economic and environmental aspects of such a policy on agriculture. A global agricultural simulation model assesses changes in production, commodity prices, and trade resulting from a U.S. carbon tax. In addition, greenhouse gas (GHG) emissions from land-use change are quantified to evaluate the possible unintended consequence of increasing emissions in the rest of the world. Three U.S. carbon tax scenarios are evaluated ranging from $15–$144 per metric ton of carbon dioxide equivalent (t−1 CO2-e) and covering a 10-year projection period. The results show that the production cost for corn and soybeans increase by a maximum of 32.6% and 22.4%, respectively at a carbon tax of $144 t−1 CO2-e. The production cost increase is compensated in part by an increase in commodity prices. Hence, the decrease in net returns for corn, soybeans, and wheat is 11.4%, 8.7%, and 11.0%, respectively, in the scenario with the highest carbon price. U.S. exports decrease for major commodities such as corn (24.9%), sorghum (20.5%), and wheat (8.7%). Barley, soybeans, and sunflower see an increase in exports of 1.2–8.8%. These changes in trade patterns also result in a re-allocation of land-use in the rest of the world leading to a slight increase in global GHG emissions from land-use change representing 1.8% of total U.S. emissions in 2017. The increase in emissions is small compared to the overall projected reduction from the carbon tax. Policy makers need to be cognizant of leakage in terms of land-use change and that measures must be taken to avoid expansion into carbon rich native vegetation.

Keywords: International trade; Climate change policy; Agricultural production; Global trade; Carbon leakage (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264837721000430
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:103:y:2021:i:c:s0264837721000430

DOI: 10.1016/j.landusepol.2021.105320

Access Statistics for this article

Land Use Policy is currently edited by Jaap Zevenbergen

More articles in Land Use Policy from Elsevier
Bibliographic data for series maintained by Joice Jiang ().

 
Page updated 2022-08-17
Handle: RePEc:eee:lauspo:v:103:y:2021:i:c:s0264837721000430