GHG abatement welfare cost curves for Norwegian agriculture

Agriculture makes a significant contribution to Norway’s emissions of greenhouse gases (GHG). Although the sector accounts for only 0.3 per cent of GDP, it accounts for roughly 9 per cent of total GHG emissions. Norwegian agriculture is dominated by livestock production; ruminants (cattle and sheep) are particularly important. There are opportunities for GHG mitigation under existing technology through changes in agricultural practices. Analytically we derive abatement cost curves for Norway in terms of the change in economic welfare, and on a theoretical basis we examine the impact of various policy objectives on the abatement cost curve. In particular we consider the policy objective of keeping the production of calories at the current level. We use a detailed economic model to assess the impact and welfare implication of a reduction in GHG emissions.