Comparing climate pledges and eco-taxation in a networked agricultural supply chain organisation

Arnaud Z. Dragicevic and Jean-Christophe Pereau
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Arnaud Z. Dragicevic: CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal = University of Québec in Montréal, Chulalongkorn University [Bangkok]
Jean-Christophe Pereau: BSE - Bordeaux sciences économiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: This paper examines the effectiveness of climate pledges and eco-taxation as strategies for mitigating climate change within a networked agricultural supply chain organisation. We utilise variational inequality techniques within a multicriteria decision-making framework and validate our theoretical findings through numerical simulations using a machine learning augmented algorithm. By employing this approach, we position the Agricultural Sector Roadmap, aimed at capping global warming at 1.5°C, within the wider agricultural sector's climate action framework. Our results demonstrate that environmental taxation emerges as the most effective approach for addressing climate change. Eco-taxation leads to a 57.87 per cent reduction in global emissions, whereas climate pledges only account for a 20.59 per cent reduction at the same level of production. Furthermore, eco-taxation results in a 45.68 per cent greater reduction in emission intensity compared to climate pledges. In contrast to climate commitments, an eco-fiscal policy is capable of achieving the objectives established by the European Union.

Keywords: Agricultural economics; Network economics; Variational inequality; Supply chain; GHG emissions; Cooperatives; Climate pledge; Eco-taxation (search for similar items in EconPapers)
Date: 2024-03-12
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Published in European Review of Agricultural Economics, 2024, 51 (2), pp.354-398. ⟨10.1093/erae/jbae001⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04510138

DOI: 10.1093/erae/jbae001

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