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Reorienting budgetary support to agriculture for climate change mitigation: A modelling analysis

Hugo Valin, Ben Henderson and Jussi Lankoski

No 206, OECD Food, Agriculture and Fisheries Papers from OECD Publishing

Abstract: Reforming agricultural support is increasingly considered a viable means to enhance agriculture’s contribution to climate change mitigation, while fulfilling broader food systems policy objectives related to food security and livelihoods. This study uses a new computable general equilibrium model to investigate a set of global policy reform scenarios that reorientate governments’ budgetary transfers to agriculture to reduce greenhouse gas emissions. The results suggest that removing budgetary support globally would reduce agricultural emissions by 2.1% with potential negative effects on food supply. Reorienting existing support, instead, could have significantly stronger effects: decoupling payments from production and tying these to suitable agri-environmental practices could raise emission reduction to over 4% without harming food supply. Targeted investments in productivity and abatement technologies could bring additional emission savings in the long term with co-benefits for food security. Overall, combining green decoupling and investment policies in OECD countries would reduce global agricultural emissions by 5% – or by 11% if extended to other regions – while balancing outcomes across the three dimensions of the food systems’ triple challenge.

Keywords: Agricultural policy; Computable general equilibrium; Domestic support; Greenhouse gas emissions (search for similar items in EconPapers)
JEL-codes: C68 Q11 Q18 Q54 (search for similar items in EconPapers)
Date: 2023-12-06
New Economics Papers: this item is included in nep-agr and nep-env
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