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Policy Considerations for Mandating Agriculture in a Greenhouse Gas Emissions Trading Scheme

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  • Tiho Ancev

Abstract

The question of whether or not the agricultural sector should be covered in a GHG ETS is prominent in policy debates surrounding the design and implementation of such proposed schemes in many developed nations. This paper identifies two key economic elements that determine both the costs and the benefits of mandating agriculture in an ETS. These are: the costs of reducing GHG emissions in agriculture, and the transactions costs pertinent to covering agriculture in an ETS. Published data on these elements is used to derive a likely range of the overall social costs of mandating the agricultural sector in a GHG ETS. Current indicators of those costs for agriculture, and for the other sectors of the economy, do not offer evidence that mandating agriculture in an ETS would be socially beneficial. Alternative approaches to engaging the agricultural sector in GHG emission reduction, e.g. through voluntary opt-in or through offsetting credits, are likely to be more beneficial. Copyright 2011, Oxford University Press.

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  • Tiho Ancev, 2011. "Policy Considerations for Mandating Agriculture in a Greenhouse Gas Emissions Trading Scheme," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(1), pages 99-115.
    • Handle: RePEc:oup:apecpp:v:33:y:2011:i:1:p:99-115
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    File URL: http://hdl.handle.net/10.1093/aepp/ppq031
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    1. Landis, Florian & Fredriksson, Gustav & Rausch, Sebastian, 2021. "Between- and within-country distributional impacts from harmonizing carbon prices in the EU," Energy Economics, Elsevier, vol. 103(C).
    2. Kreft, Cordelia & Huber, Robert & Wuepper, David & Finger, Robert, 2021. "The role of non-cognitive skills in farmers' adoption of climate change mitigation measures," Ecological Economics, Elsevier, vol. 189(C).
    3. Cemal Atici, 2022. "Reconciling the flexibility mechanisms of climate policies towards the inclusiveness of developing countries: commitments and prospects," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(7), pages 9048-9067, July.
    4. 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.
    5. Wang, Wen, 2015. "Intégrer l'agriculture dans les politiques d'atténuation chinoises," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/14999 edited by Perthuis, Christian de.
    6. Ross Kingwell, 2021. "Agriculture’s carbon‐neutral challenge: The case of Western Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(3), pages 566-595, July.
    7. Stephane de Cara & Bruno Vermont, 2014. "Atténuation de l’effet de serre d’origine agricole : efficacité en coûts et instruments de régulation," Post-Print hal-01173041, HAL.
    8. Ehlers, Melf-Hinrich & Huber, Robert & Finger, Robert, 2021. "Agricultural policy in the era of digitalisation," Food Policy, Elsevier, vol. 100(C).
    9. Dumbrell, Nikki P. & Kragt, Marit E. & Biggs, Jody & Meier, Elizabeth & Thorburn, Peter, 2015. "Climate change abatement and farm profitability analyses across agricultural environments," Working Papers 225674, University of Western Australia, School of Agricultural and Resource Economics.
    10. Antonia Weishaupt & Felix Ekardt & Beatrice Garske & Jessica Stubenrauch & Jutta Wieding, 2020. "Land Use, Livestock, Quantity Governance, and Economic Instruments—Sustainability Beyond Big Livestock Herds and Fossil Fuels," Sustainability, MDPI, vol. 12(5), pages 1-27, March.

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