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The social costs of second-best policies: Evidence from agricultural GHG mitigation

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  • Garnache, Cloé
  • Mérel, Pierre R.
  • Lee, Juhwan
  • Six, Johan

Abstract

This paper investigates the social costs of second-best agricultural greenhouse gas (GHG) mitigation policies. Adjustments along the land use and input intensity margins are represented within a regionalized optimization model of California crop production calibrated to economic and agronomic information. Second-best policies relying on spatially aggregated GHG emission factors lead to small abatement efficiency losses, while policies targeting a single GHG lead to moderate losses. In contrast, policies targeting a single input entail large abatement efficiency losses, which nonetheless can be reduced by combining instruments.

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  • Garnache, Cloé & Mérel, Pierre R. & Lee, Juhwan & Six, Johan, 2017. "The social costs of second-best policies: Evidence from agricultural GHG mitigation," Journal of Environmental Economics and Management, Elsevier, vol. 82(C), pages 39-73.
  • Handle: RePEc:eee:jeeman:v:82:y:2017:i:c:p:39-73
    DOI: 10.1016/j.jeem.2016.10.004
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    2. De Cara, Stéphane & Henry, Loïc & Jayet, Pierre-Alain, 2018. "Optimal coverage of an emission tax in the presence of monitoring, reporting, and verification costs," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 71-93.
    3. Lungarska, Anna & Chakir, Raja, 2018. "Climate-induced Land Use Change in France: Impacts of Agricultural Adaptation and Climate Change Mitigation," Ecological Economics, Elsevier, vol. 147(C), pages 134-154.
    4. Manning, Dale T. & Rad, Mani Rouhi & Suter, Jordan F. & Goemans, Christopher & Xiang, Zaichen & Bailey, Ryan, 2020. "Non-market valuation in integrated assessment modeling: The benefits of water right retirement," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).

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    More about this item

    Keywords

    Greenhouse gases; Climate policy; Second best; Abatement efficiency;
    All these keywords.

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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