Policy strategies and challenges for climate change mitigation in the Agriculture, Forestry and Other Land Use (AFOLU) sector

Ben Henderson, Stefan Frank, Peter Havlik and Hugo Valin
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Ben Henderson: OECD
Stefan Frank: International Institute for Applied Systems Analysis
Hugo Valin: International Institute for Applied Systems Analysis

No 149, OECD Food, Agriculture and Fisheries Papers from OECD Publishing

Abstract: This study uses GLOBIOM ‒ the most detailed global economic model of agriculture, land use and greenhouse gas (GHG) emissions ‒ to assess the effectiveness of different policies in cutting net emissions from the Agriculture, Forestry and Other Land Use (AFOLU) sector, with a view to helping limit long-term global temperature increases to 1.5°C and 2°C. Trade-offs between emission reductions and impacts on food producers, consumers and government budgets are also evaluated for each policy package. A full complement of policy options is deployed globally across AFOLU, comprising emission taxes for emitting AFOLU activities and subsidies rewarding carbon sequestration. Using a carbon price consistent with the 2°C target (1.5°C target), this is projected to mitigate 8 GtCO2 eq/yr (12 GtCO2 eq/yr) in 2050, representing 89% (129%) reduction in net AFOLU emissions, and 12% (21%) of total anthropogenic GHG emissions. Nearly two-thirds of the net emission reductions are from the Land Use, Land-Use Change and Forestry (LULUCF) component of AFOLU, mostly from reduced deforestation. A global carbon tax on AFOLU is found to be twice as effective in lowering emissions as an equivalently priced emission abatement subsidy because the latter keeps high emitting producers in business. However, a tax has trade-offs in terms of lower agricultural production and food consumption, which a subsidy avoids. A shift to lower emission diets by consumers has a much smaller impact on reducing agricultural emissions than any of the policy packages involving taxes on emissions.

Keywords: Abatement subsidy; GHG emission tax; Paris Agreement (search for similar items in EconPapers)
JEL-codes: C61 F18 Q11 Q18 Q54 Q56 Q58 (search for similar items in EconPapers)
Date: 2021-01-28
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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Citations: View citations in EconPapers (3)

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