Agriculture's Contribution to Swiss Climate Policy: Results of an Economic Analysis

Greenhouse gas emissions from Swiss agriculture have been reduced by about 8 % since 1990. Hence, Swiss agriculture has already contributed 13 % to the national Kyoto target, although it is not legally bound to reduce greenhouse gas emissions. Since the reductions are a result of changes of agricultural policy and relative prices, related income losses can not be attributed to climate policy. In other words, the agricultural sector did not have to bear effective emission abatement costs. If the current agricultural policy is continued, further reductions of agricultural GHG emissions by 3 to 10 % can be expected until 2010. These expectations are based on economic calculations made with the integrated agricultural allocation model S_INTAGRAL. Accordingly, Swiss agriculture may contribute 17 to 28 % to the national Kyoto target. The economic value of this reduction is estimated to be within the range of 30 to 107 million Swiss francs per year. This value is optional and can only be realized in the commitment period of 2008-2012. It reflects the reduction costs that could be saved by the rest of the economy. Moreover, the results show that soil carbon sequestration may constitute a moderate option in the reduction of the emissions in the short term. However, this potential is rather small compared to the national Kyoto target, and may involve relatively high costs of monitoring. From an economic point of view, this leads to the advice to renounce to targeted measures and incentives for additional GHG mitigation by the agricultural sector.