Agriculture carbon pricing in EU, carbon leakage and carbon adjustment mechanism impacts in southern cone beef exports

Silvina Cabrini, Demián Olemberg, Estela Cristeche, Ignacio Pace and Ignacio Benito Amaro

No 344399, IAAE 2024 Conference, August 2-7, 2024, New Delhi, India from International Association of Agricultural Economists (IAAE)

Abstract: Climate change poses a challenge to agri-food systems. Recognizing the need for emission reduction, the European Union (EU) is contemplating the integration of the agricultural sector into formal carbon pricing mechanisms. This study employs the CLIMTRADE model to assess the potential consequences of a EU's carbon border adjustment mechanism (CBAM) on beef trade for Argentina, Brazil and Uruguay. The model considers a baseline bilateral trade matrix, emission intensities, international transport emissions, and potential carbon prices, resulting in the corresponding impacts on imports and exports, depending on the scenario considered. The results indicate that imposing a carbon tax within the EU leads to reduced beef imports, increased domestic prices, and potential carbon leakage. However, deploying a CBAM could mitigate carbon leakage and further reduce emissions. This study contributes to the discussion on the consequences for livestock production in South America of the advancement of emission reduction policies in agriculture driven by developed countries and their implications for the configuration of international trade.

Keywords: Environmental Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 12
Date: 2024-07-26
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:ags:cfcp15:344399

DOI: 10.22004/ag.econ.344399

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