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The Effects of Unilateral Reduction of Greenhouse Gas Emissions on the U.S. Agriculture

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  • Tokovenko, Oleksiy
  • Koo, Won W.

Abstract

This study analyses potential adverse effects of unilateral increase in GHG emission standards. The single good two regions partial equilibrium model of international trade is used to derive and interpret the conditions under which such an increase will lead to a reduction in a total level of GHG emission. We found that improvement in the global GHG emission level will be observed if the response of the home country abatement level is more elastic than that of the foreign country by the factor of the ratio of initial foreign to domestic marginal emission intensities. It is also shown that in the large industry case, the appropriate factor is adjusted by the measure of the relative market influence of two industries. The study concludes that a unilateral reduction in GHG emissions will unlikely lead to the reduction in the total GHG emissions level and may worsen the environmental situation in other regions. An appropriate multilateral agreement that involves producers from the major emitting countries is required to achieve the goal.

Suggested Citation

  • Tokovenko, Oleksiy & Koo, Won W., 2011. "The Effects of Unilateral Reduction of Greenhouse Gas Emissions on the U.S. Agriculture," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103847, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea11:103847
    DOI: 10.22004/ag.econ.103847
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    References listed on IDEAS

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    1. Di Maria, C. & van der Werf, E.H., 2005. "Carbon Leakage Revisited : Unilateral Climate Policy with Directed Technical Change," Discussion Paper 2005-68, Tilburg University, Center for Economic Research.
    2. Corrado Maria & Edwin Werf, 2008. "Carbon leakage revisited: unilateral climate policy with directed technical change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(2), pages 55-74, February.
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    Keywords

    Environmental Economics and Policy; International Relations/Trade;

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