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Carbon leakage and agriculture: A literature review on emissions mitigation policies

Author

Listed:
  • Theodoros Arvanitopoulos
  • Grégoire Garsous
  • Paolo Agnolucci

Abstract

The risks of carbon leakage associated with climate policies in the agricultural sector remains under-researched. Studies to date suggest that carbon pricing policies implemented by a single country, or small group of countries, reduce global emissions but also affect the international competitiveness of these countries’ agricultural sectors and induce carbon leakage. While carbon leakage can be prevented with trade-related measures that adjust emissions prices at the border, such measures applied in developed countries could potentially lead to significant welfare losses for developing countries that heavily rely on agricultural exports. That said, important caveats apply to the reviewed studies: i) from an environmental perspective, estimations of carbon leakage rates alone do not offer a comprehensive assessment of how optimally agricultural activities are allocated across countries; ii) most of the studies estimate the effects of additional environmental policies, such as carbon taxes, and ignore the effects of existing policies, including market distorting and potentially environmentally harmful support for agricultural production.

Suggested Citation

  • Theodoros Arvanitopoulos & Grégoire Garsous & Paolo Agnolucci, 2021. "Carbon leakage and agriculture: A literature review on emissions mitigation policies," OECD Food, Agriculture and Fisheries Papers 169, OECD Publishing.
  • Handle: RePEc:oec:agraaa:169-en
    DOI: 10.1787/9247f1e7-en
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    Citations

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    Cited by:

    1. Katharine Heyl & Felix Ekardt & Lennard Sund & Paula Roos, 2022. "Potentials and Limitations of Subsidies in Sustainability Governance: The Example of Agriculture," Sustainability, MDPI, vol. 14(23), pages 1-26, November.
    2. Kokemohr, Lennart & Mittenzwei, Klaus, 2022. "Governance for Greenhouse Gas Abatement in Norwegian Agriculture," 62nd Annual Conference, Stuttgart, Germany, September 7-9, 2022 329613, German Association of Agricultural Economists (GEWISOLA).

    More about this item

    Keywords

    Climate change; Environmental policies; Trade;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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