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Assessing uncertainty in the cost-effectiveness of agricultural greenhouse gas mitigation

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  • Eory, Vera
  • Topp, Cairistiona F. E.
  • Moran, Dominic
  • Butler, Adam

Abstract

Information on the uncertainty of quantitative results feeding into public decision making is essential for designing robust policies. However, this information is often not available in relation to the economics of greenhouse gas (GHG) mitigation in agriculture. This paper analyses the uncertainty of the mitigation estimates provided by a Marginal Abatement Cost Curve (MACC). The case study is based on the GHG MACC developed for Scottish agricultural soils. The qualitative assessment disentangled the different sources and types of uncertainty in the cost-effectiveness analysis of GHG mitigation options. The quantitative assessment estimated the statistical uncertainty of the results by propagating uncertainty through the model, using three uncertainty scenarios. The results show that the uncertainty in the economically optimal abatement in Scottish agricultural soils is high with the medium and high uncertainty scenarios, with the ratio of the 95% CI to the mean being 0.57-1.01 and 0.98-1.4, respectively, while the low uncertainty scenario resulting in a ratio of the 95% CI to the mean of 0.24-0.68. However, the ranking of the measures are relatively robust with all three uncertainty scenarios, especially in terms of which options have cost-effectiveness below the carbon price threshold.

Suggested Citation

  • Eory, Vera & Topp, Cairistiona F. E. & Moran, Dominic & Butler, Adam, 2014. "Assessing uncertainty in the cost-effectiveness of agricultural greenhouse gas mitigation," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 170784, Agricultural Economics Society.
  • Handle: RePEc:ags:aesc14:170784
    DOI: 10.22004/ag.econ.170784
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    References listed on IDEAS

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    1. Mykola Gusti & Nicklas Forsell & Petr Havlik & Nikolay Khabarov & Florian Kraxner & Michael Obersteiner, 2019. "The sensitivity of the costs of reducing emissions from deforestation and degradation (REDD) to future socioeconomic drivers and its implications for mitigation policy design," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 24(6), pages 1123-1141, August.

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    Environmental Economics and Policy; Risk and Uncertainty;

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