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Implications of Alternative Mitigation Policies on World Prices for Fossil Fuels and Agricultural Products

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  • Paltsev, Sergey

Abstract

Emissions mitigation policies affect prices, including prices for fossil fuels and agricultural products. Consumer prices for coal and natural gas are expected to rise when climate policy is implemented, while oil prices may be reduced or remain the same in comparison to a no policy scenario. Impacts on agricultural prices are more controversial as reduced negative productivity impacts on yields are compensated by increased costs of energy inputs to agriculture, lower CO2 fertilization effect, and a competition for land from biofuels. In most of the mitigation scenarios considered in the paper, mitigation policies increase agricultural prices in comparison to the no policy scenario.

Suggested Citation

  • Paltsev, Sergey, 2012. "Implications of Alternative Mitigation Policies on World Prices for Fossil Fuels and Agricultural Products," WIDER Working Paper Series 065, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2012-065
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2012-065.pdf
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    References listed on IDEAS

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    7. Birur, Dileep & Hertel, Thomas & Tyner, Wally, 2008. "Impact of Biofuel Production on World Agricultural Markets: A Computable General Equilibrium Analysis," GTAP Working Papers 2413, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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    9. Angelo Gurgel & Tim Cronin & John Reilly & Sergey Paltsev & David Kicklighter & Jerry Melillo, 2011. "Food, Fuel, Forests, and the Pricing of Ecosystem Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(2), pages 342-348.
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    Citations

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    Cited by:

    1. Thomas W. Hertel & Jevgenijs Steinbuks & Wallace E. Tyner, 2016. "What Is the Social Value of Second Generation Biofuels?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(4), pages 599-617.
    2. repec:wsi:ccexxx:v:04:y:2013:i:supp0:n:s2010007813400034 is not listed on IDEAS
    3. Peterson, Sonja & Weitzel, Matthias, 2014. "Reaching a climate agreement: Do we have to compensate for energy market effects of climate policy?," Kiel Working Papers 1965, Kiel Institute for the World Economy (IfW).
    4. Channing Arndt & Adam Schlosser & Kenneth Strzepek & James Thurlow, 2014. "Climate Change and Economic Growth Prospects for Malawi: An Uncertainty Approach," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 23(suppl_2), pages 83-107.
    5. Channing Arndt & Paul Chinowsky & Charles Fant & Yohannes Gebretsadik & James E. Neumann & Sergey Paltsev & C. Adam Schlosser & Kenneth Strzepek & Finn Tarp & James Thurlow, 2015. "Climate change and developing country interests:Cases from the Zambezi River Basin," WIDER Working Paper Series 116, World Institute for Development Economic Research (UNU-WIDER).
    6. Alton Theresa & Arndt Channing & Gebretsadik Yohannes & Hartley Faaiqa & Makrelov Konstantin & Strzepek Kenneth & Thurlow James & Schlosser C. Adam & Gabriel Sherwin & Cullis James & Cartwright Anton , 2015. "An Uncertainty Approach to Modelling Climate Change Risk in South Africa," WIDER Working Paper Series 045, World Institute for Development Economic Research (UNU-WIDER).
    7. Ada Ignaciuk & Daniel Mason-D'Croz, 2014. "Modelling Adaptation to Climate Change in Agriculture," OECD Food, Agriculture and Fisheries Papers 70, OECD Publishing.
    8. Baldos, Uris Lantz & Thomas Hertel, 2014. "Bursting the Bubble: A Long Run Perspective on Crop Commodity Prices," GTAP Working Papers 4574, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.

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