Effects of the GHG Mitigation Policies on Livestock Sectors

In this paper we have investigated effects of GHG mitigation policies on livestock sectors. We used a global computable general equilibrium GTAP-AEZ-GHG model with explicit unique regional land types, land uses and related GHG emissions. The model is then augmented with cost and GHG response information from partial equilibrium approaches to abatement of land-based greenhouse gas emissions. With this framework we analyze changes in regional livestock output, sector competitiveness and regional food consumption under different climate change mitigation policy regimes. Scenarios we have considered differ by participation/exclusion of agricultural sectors and non-Annex I countries, as well as policy instruments. The imposition of carbon tax in agriculture has adverse affects on food consumption, especially in developing countries. The reductions in food consumption are smaller if the agricultural producer subsidy is introduced to compensate for carbon tax the producers pay. The global forest carbon sequestration subsidy effectively controls emission leakage when carbon tax is imposed only in Annex I regions. The sequestration subsidy bids land away from agriculture in non-Annex 1 regions and prevents expansion of agricultural sectors. Though the sequestration subsidy allows reduction of GHG emissions, if implemented, the policy may adversely affect food security and agricultural development in developing countries.