IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i3p2410-d1050369.html
   My bibliography  Save this article

Effects of Sustainable Regulations at Agricultural International Market Failures: A Dynamic Approach

Author

Listed:
  • Daniel May

    (Food, Land and Agribusiness Management Department, Harper Adams University, Newport, Shropshire TF10 8NB, UK)

  • Ourania Tremma

    (Food, Land and Agribusiness Management Department, Harper Adams University, Newport, Shropshire TF10 8NB, UK)

Abstract

Several policies have been proposed to reduce the environmental impact of agricultural trade. However, a number of these policies have low efficiency on a global scale due to side effects on third-competitor countries. The objective of this article is to assess the consequences of these policies under the existence of market failures that characterise the agricultural sector (i.e., ex ante price uncertainty and oligopoly in international markets). In particular, it is shown that some of these policies could cause instability in the agricultural trade system in the short/medium run, as well as permanent adverse side effects on competitor countries. Using a theoretical dynamic model that includes these failures, it was found that instability could be reduced by supplying information that could help producers to improve price forecasting. Likewise, the adverse side effects could be prevented by means of sustainable policies adopted co-ordinately by competitor countries. This latter result is consistent with the general strategies stated by the Climate Club.

Suggested Citation

  • Daniel May & Ourania Tremma, 2023. "Effects of Sustainable Regulations at Agricultural International Market Failures: A Dynamic Approach," Sustainability, MDPI, vol. 15(3), pages 1-10, January.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:3:p:2410-:d:1050369
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/3/2410/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/3/2410/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dominic Moran & Michael Macleod & Eileen Wall & Vera Eory & Alistair McVittie & Andrew Barnes & Robert Rees & Cairistiona F. E. Topp & Andrew Moxey, 2011. "Marginal Abatement Cost Curves for UK Agricultural Greenhouse Gas Emissions," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(1), pages 93-118, February.
    2. Richard J. Sexton, 2013. "Market Power, Misconceptions, and Modern Agricultural Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 209-219.
    3. Jialing Yu & Jian Wu, 2018. "The Sustainability of Agricultural Development in China: The Agriculture–Environment Nexus," Sustainability, MDPI, vol. 10(6), pages 1-17, May.
    4. Tongwane, Mphethe Isaac & Moeletsi, Mokhele Edmond, 2018. "A review of greenhouse gas emissions from the agriculture sector in Africa," Agricultural Systems, Elsevier, vol. 166(C), pages 124-134.
    5. Harvey E Lapan & Shiva Sikdar, 2022. "Strategic environmental policy and international market share rivalry under differentiated Bertrand oligopoly [Tradable permits vs. ecological dumping when governments act non-cooperatively]," Oxford Economic Papers, Oxford University Press, vol. 74(1), pages 215-235.
    6. Vardges Hovhannisyan & Brian W. Gould, 2012. "A Structural Model of the Analysis of Retail Market Power: The Case of Fluid Milk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 67-79.
    7. Aymeric Ricome & Arnaud Reynaud, 2022. "Marketing contract choices in agriculture: The role of price expectation and price risk management," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 170-186, January.
    8. Yu, Min & Cruz, Jose M. & Li, Dong Michelle, 2019. "The sustainable supply chain network competition with environmental tax policies," International Journal of Production Economics, Elsevier, vol. 217(C), pages 218-231.
    9. Drabo, Alassane, 2017. "Climate change mitigation and agricultural development models: Primary commodity exports or local consumption production?," Ecological Economics, Elsevier, vol. 137(C), pages 110-125.
    10. Kai Tang & Chunbo Ma, 2022. "The cost-effectiveness of agricultural greenhouse gas reduction under diverse carbon policies in China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 14(4), pages 758-773, June.
    11. Shuichi Ohori, 2006. "Optimal Environmental Tax and Level of Privatization in an International Duopoly," Journal of Regulatory Economics, Springer, vol. 29(2), pages 225-233, March.
    12. LaPlue, Lawrence D., 2019. "The environmental effects of trade within and across sectors," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 118-139.
    13. MacLeod, Michael & Moran, Dominic & Eory, Vera & Rees, R.M. & Barnes, Andrew & Topp, Cairistiona F.E. & Ball, Bruce & Hoad, Steve & Wall, Eileen & McVittie, Alistair & Pajot, Guillaume & Matthews, Rob, 2010. "Developing greenhouse gas marginal abatement cost curves for agricultural emissions from crops and soils in the UK," Agricultural Systems, Elsevier, vol. 103(4), pages 198-209, May.
    14. Jeremiás Máté Balogh & Attila Jámbor, 2020. "The Environmental Impacts of Agricultural Trade: A Systematic Literature Review," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    15. Carlotta Penone & Elisa Giampietri & Samuele Trestini, 2021. "Hedging Effectiveness of Commodity Futures Contracts to Minimize Price Risk: Empirical Evidence from the Italian Field Crop Sector," Risks, MDPI, vol. 9(12), pages 1-14, December.
    16. Vincenzo Candila & Salvatore Farace, 2018. "On the Volatility Spillover between Agricultural Commodities and Latin American Stock Markets," Risks, MDPI, vol. 6(4), pages 1-16, October.
    17. Arnaud Reynaud & Aymeric Ricome, 2022. "Marketing contract choices in agriculture: The role of price expectation and price risk management," Post-Print hal-03602696, HAL.
    18. Stephen F. Hamilton & David L. Sunding, 2021. "Joint Oligopsony‐Oligopoly Power in Food Processing Industries: Application to the us Broiler Industry," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1398-1413, August.
    19. Odd Rune Straume, 2006. "Product Market Integration and Environmental Policy Coordination in An International Duopoly," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(4), pages 535-563, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Minihan, Erin S. & Wu, Ziping, 2011. "The Potential Economic and Environmental Costs of GHG Mitigation Measures for Cattle Sectors in Northern Ireland," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108779, Agricultural Economics Society.
    2. Blandford, David & Gaasland, Ivar & Vardal, Erling, 2016. "Now that the party’s over: achieving GHG emission reduction commitments in Norwegian agriculture," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236330, Agricultural Economics Society.
    3. Wettemann, Patrick Johannes Christopher & Latacz-Lohmann, Uwe, 2017. "An efficiency-based concept to assess potential cost and greenhouse gas savings on German dairy farms," Agricultural Systems, Elsevier, vol. 152(C), pages 27-37.
    4. Jeong, Kwangbok & Hong, Taehoon & Kim, Jimin & Cho, Kyuman, 2019. "Development of a multi-objective optimization model for determining the optimal CO2 emissions reduction strategies for a multi-family housing complex," Renewable and Sustainable Energy Reviews, Elsevier, vol. 110(C), pages 118-131.
    5. Blandford, David & Gaasland, Ivar & Vårdal, Erling, 2014. "GHG abatement welfare cost curves for Norwegian agriculture," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 169734, Agricultural Economics Society.
    6. Xing Zhao & Xin Zhang, 2022. "Research on the Evaluation and Regional Differences in Carbon Emissions Efficiency of Cultural and Related Manufacturing Industries in China’s Yangtze River Basin," Sustainability, MDPI, vol. 14(17), pages 1-22, August.
    7. Isabel Teichmann, 2015. "An Economic Assessment of Soil Carbon Sequestration with Biochar in Germany," Discussion Papers of DIW Berlin 1476, DIW Berlin, German Institute for Economic Research.
    8. Albert Ayorinde Abegunde, 2017. "Local communities’ belief in climate change in a rural region of Sub-Saharan Africa," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 19(4), pages 1489-1522, August.
    9. Benjamin Dequiedt & Vera Eory & Juliette Maire & Cairstiona F.E. Topp & Robert Rees & Peter Zander & Moritz Reckling & Nicole Schlaefke, 2015. "Mitigation costs through alternative crop rotations in agriculture: an assessment for 5 European regions," Working Papers 1502, Chaire Economie du climat.
    10. Ruijs, A. & Wossink, A. & Kortelainen, M. & Alkemade, R. & Schulp, C.J.E., 2013. "Trade-off analysis of ecosystem services in Eastern Europe," Ecosystem Services, Elsevier, vol. 4(C), pages 82-94.
    11. Oswald Marinoni & Martijn Grieken, 2016. "ABATE: A New Tool to Produce Marginal Abatement Cost Curves," Computational Economics, Springer;Society for Computational Economics, vol. 48(2), pages 367-377, August.
    12. Hanna Freudenreich & Sindu W. Kebede, 2022. "Experience of shocks, household wealth and expectation formation: Evidence from smallholder farmers in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 53(5), pages 756-774, September.
    13. de Oliveira Silva, Rafael & Barioni, Luis G. & Albertini, Tiago Zanett & Eory, Vera & Topp, Cairistiona F.E. & Fernandes, Fernando A. & Moran, Dominic, 2015. "Developing a nationally appropriate mitigation measure from the greenhouse gas GHG abatement potential from livestock production in the Brazilian Cerrado," Agricultural Systems, Elsevier, vol. 140(C), pages 48-55.
    14. Lengers, Bernd & Britz, Wolfgang & Holm-Müller, Karin, 2013. "Trade-off of feasibility against accuracy and cost efficiency in choosing indicators for the abatement of GHG-emissions in dairy farming," Discussion Papers 162877, University of Bonn, Institute for Food and Resource Economics.
    15. Benjamin Dequiedt & Dominic Moran, 2014. "The cost of emissions mitigation by legume crops in French agriculture," Working Papers 1410, Chaire Economie du climat.
    16. Bhattacharya, Rabindra N. & Pal, Rupayan, 2010. "Environmental standards as strategic outcomes: A simple model," Resource and Energy Economics, Elsevier, vol. 32(3), pages 408-420, August.
    17. Yong Zhu & Congjia Huo, 2022. "The Impact of Agricultural Production Efficiency on Agricultural Carbon Emissions in China," Energies, MDPI, vol. 15(12), pages 1-22, June.
    18. Branca, Giacomo & Lipper, Leslie & Sorrentino, Alessandro, 2012. "Benefit-costs analysis of climate-related agricultural investments in Africa: a case study," 2012 First Congress, June 4-5, 2012, Trento, Italy 124109, Italian Association of Agricultural and Applied Economics (AIEAA).
    19. Lin Meng & Wentao Si, 2022. "Pro-Environmental Behavior: Examining the Role of Ecological Value Cognition, Environmental Attitude, and Place Attachment among Rural Farmers in China," IJERPH, MDPI, vol. 19(24), pages 1-24, December.
    20. Boris M. Leybert & Oksana V. Shmaliy & Zhanna V. Gornostaeva & Daria D. Mironova, 2023. "Risk Mitigation in Agriculture in Support of COVID-19 Crisis Management," Risks, MDPI, vol. 11(5), pages 1-36, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:3:p:2410-:d:1050369. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.