IDEAS home Printed from https://ideas.repec.org/p/cec/wpaper/1105.html
   My bibliography  Save this paper

Marginal abatement costs of greenhouse gas emissions from European agriculture, cost effectiveness, and the EU non-ETS Burden Sharing Agreement

Author

Listed:
  • Stéphane De Cara

    (INRA, UMR 210 Economie Publique INRA-AgroParisTech and Chaire Economie du Climat)

  • Pierre-Alain Jayet

    (INRA, UMR 210 Economie Publique INRA-AgroParisTech)

Abstract

We propose a quantitative assessment of the marginal abatement costs (MAC) of greenhouse gas emissions from European agriculture and analyze the implications of the non-ETS burden-sharing agreement (BSA) for this sector. This assessment is based on MAC reduced forms, the generic specification of which enables simple parameterization and numerical computations. Such MAC curves are parameterized for each Member State using the outputs of a detailed model of the European agricultural supply. They are then used to compute total and marginal abatement costs involved by the BSA targets, as well as the costeffective effort sharing, the corresponding emission price and abatement costs. The main findings are: (i) flexibility mechanisms such as a cap-and-trade system for agricultural emissions could reduce the total costs of meeting the 10% EU abatement target by a factor two to three relative to the strict implementation of each country’s target, (ii) the corresponding equilibrium emission price is found to be 32-42 €/tCO2eq depending on the assumption regarding business-as-usual emissions, and (iii) a cap-and-trade system with allowances based on the BSA targets would involve substantial transfers from EU-15 countries to New Member States, an important share of which being made of ‘hot air’.

Suggested Citation

  • Stéphane De Cara & Pierre-Alain Jayet, 2011. "Marginal abatement costs of greenhouse gas emissions from European agriculture, cost effectiveness, and the EU non-ETS Burden Sharing Agreement," Working Papers 1105, Chaire Economie du climat.
  • Handle: RePEc:cec:wpaper:1105
    as

    Download full text from publisher

    File URL: http://www.chaireeconomieduclimat.org/RePEc/cec/wpaper/11-03_WP_2011-05_DeCara_Jayet.pdf
    File Function: First version, 2011
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stéphane Cara & Martin Houzé & Pierre-Alain Jayet, 2005. "Methane and Nitrous Oxide Emissions from Agriculture in the EU: A Spatial Assessment of Sources and Abatement Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(4), pages 551-583, December.
    2. Schneider, Uwe A. & McCarl, Bruce A. & Schmid, Erwin, 2007. "Agricultural sector analysis on greenhouse gas mitigation in US agriculture and forestry," Agricultural Systems, Elsevier, vol. 94(2), pages 128-140, May.
    3. Uwe A. Schneider & Bruce A. McCarl, 2006. "Appraising agricultural greenhouse gas mitigation potentials: effects of alternative assumptions," Agricultural Economics, International Association of Agricultural Economists, vol. 35(3), pages 277-287, November.
    4. Newell, Richard G & Stavins, Robert N, 2003. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Journal of Regulatory Economics, Springer, vol. 23(1), pages 43-59, January.
    5. Schneider, Uwe A. & Kumar, Pushpam, 2008. "Greenhouse Gas Mitigation through Agriculture," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 23(1), pages 1-5.
    6. Robert H. Beach & Benjamin J. DeAngelo & Steven Rose & Changsheng Li & William Salas & Stephen J. DelGrosso, 2008. "Mitigation potential and costs for global agricultural greenhouse gas emissions-super-1," Agricultural Economics, International Association of Agricultural Economists, vol. 38(2), pages 109-115, March.
    7. Capros, Pantelis & Mantzos, Leonidas & Parousos, Leonidas & Tasios, Nikolaos & Klaassen, Ger & Van Ierland, Tom, 2011. "Analysis of the EU policy package on climate change and renewables," Energy Policy, Elsevier, vol. 39(3), pages 1476-1485, March.
    8. Pushpam Kumar & Uwe A. Schneider, 2008. "Greenhouse gas emission mitigation through agriculture," Working Papers FNU-155, Research unit Sustainability and Global Change, Hamburg University, revised Feb 2008.
    9. Frank Convery, 2009. "Origins and Development of the EU ETS," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(3), pages 391-412, July.
    10. Golub, Alla & Hertel, Thomas & Lee, Huey-Lin & Rose, Steven & Sohngen, Brent, 2009. "The opportunity cost of land use and the global potential for greenhouse gas mitigation in agriculture and forestry," Resource and Energy Economics, Elsevier, vol. 31(4), pages 299-319, November.
    11. Tol, Richard S.J., 2009. "Intra-union flexibility of non-ETS emission reduction obligations in the European Union," Energy Policy, Elsevier, vol. 37(5), pages 1745-1752, May.
    12. Ignacio Pérez Domínguez & Wolfgang Britz & Karin Holm-Müller, 2009. "Trading schemes for greenhouse gas emissions from European agriculture: A comparative analysis based on different implementation options," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 90(3), pages 287-308.
    13. Vermont, Bruno & De Cara, Stéphane, 2010. "How costly is mitigation of non-CO2 greenhouse gas emissions from agriculture?: A meta-analysis," Ecological Economics, Elsevier, vol. 69(7), pages 1373-1386, May.
    14. A. Ellerman & Barbara Buchner, 2008. "Over-Allocation or Abatement? A Preliminary Analysis of the EU ETS Based on the 2005–06 Emissions Data," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(2), pages 267-287, October.
    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. 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.
    2. Vermont, Bruno & De Cara, Stéphane, 2010. "How costly is mitigation of non-CO2 greenhouse gas emissions from agriculture?: A meta-analysis," Ecological Economics, Elsevier, vol. 69(7), pages 1373-1386, May.
    3. Eory, Vera, 2015. "Evaluating the use of marginal abatement cost curves applied to greenhouse gas abatement in agriculture," Working Papers 199777, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    4. 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.
    5. 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.
    6. Laure Bamière & Pierre‐Alain Jayet & Salomé Kahindo & Elsa Martin, 2021. "Carbon sequestration in French agricultural soils: A spatial economic evaluation," Agricultural Economics, International Association of Agricultural Economists, vol. 52(2), pages 301-316, March.
    7. Lungarska, Anna & Chakir, Raja, 2018. "Climate-induced Land Use Change in France: Impacts of Agricultural Adaptation and Climate Change Mitigation," Ecological Economics, Elsevier, vol. 147(C), pages 134-154.
    8. Benjamin Dequiedt & Dominic Moran, 2014. "The cost of emissions mitigation by legume crops in French agriculture," Working Papers 1410, Chaire Economie du climat.
    9. Coderoni, Silvia & Esposti, Roberto, 2014. "The evolution of agricultural GHG emissions in Italy and the role of the CAP A farm-level assessment," 2014 Third Congress, June 25-27, 2014, Alghero, Italy 173012, Italian Association of Agricultural and Applied Economics (AIEAA).
    10. Garnache, Cloe & Merel, Pierre R., 2012. "Carbon market policy design: Investigating the role of payments aggregation," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124960, Agricultural and Applied Economics Association.
    11. Nigel Key & Gregoire Tallard, 2012. "Mitigating methane emissions from livestock: a global analysis of sectoral policies," Climatic Change, Springer, vol. 112(2), pages 387-414, May.
    12. Cordelia Kreft & Robert Huber & David Schäfer & Robert Finger, 2024. "Quantifying the impact of farmers' social networks on the effectiveness of climate change mitigation policies in agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(1), pages 298-322, February.
    13. 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).
    14. Zhen, Wei & Qin, Quande & Wei, Yi-Ming, 2017. "Spatio-temporal patterns of energy consumption-related GHG emissions in China's crop production systems," Energy Policy, Elsevier, vol. 104(C), pages 274-284.
    15. Jianhong Mu & Anne Wein & Bruce McCarl, 2015. "Land use and management change under climate change adaptation and mitigation strategies: a U.S. case study," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1041-1054, October.
    16. Bosello, Francesco & Orecchia, Carlo & Parrado, Ramiro, 2013. "The additional contribution of non-CO2 mitigation in climate policy costs and efforts in Europe," Conference papers 332363, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    17. Khellaf, Ayache & Nihou, Abdelaziz & Baray, Abdoul G. & van der Mensbrugghe, Dominique & Liverani, Andrea & Tyner, Wallace E., 2014. "Socioeconomic impacts of green energy growth policy in Morocco - a general equilibrium analysis," Conference papers 332493, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Ancuta Isbasoiu & Pierre-Alain Jayet & Stéphane De Cara, 2021. "Increasing food production and mitigating agricultural greenhouse gas emissions in the European Union: impacts of carbon pricing and calorie production targeting," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(2), pages 409-440, April.
    19. Orecchia, Carlo & Parrado, Ramiro, 2013. "A Quantitative Assessment of the Implications of Including non-CO2 Emissions in the European ETS," Climate Change and Sustainable Development 162416, Fondazione Eni Enrico Mattei (FEEM).
    20. 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.

    More about this item

    Keywords

    Greenhouse gas emissions; Agriculture; Marginal abatement costs; Cap-and-trade system; Methane; Nitrous oxide; European Union;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:cec:wpaper:1105. 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: Chaire Economie du Climat (email available below). General contact details of provider: http://www.chaireeconomieduclimat.org .

    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.