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Agriculture carbon pricing in EU, carbon leakage and carbon adjustment mechanism impacts in southern cone beef exports

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  • Cabrini, Silvina
  • Olemberg, Demián
  • Cristeche, Estela
  • Pace, Ignacio
  • Amaro, Ignacio Benito

Abstract

Climate change poses a challenge to agri-food systems. Recognizing the need for emission reduction, the European Union (EU) is contemplating the integration of the agricultural sector into formal carbon pricing mechanisms. This study employs the CLIMTRADE model to assess the potential consequences of a EU's carbon border adjustment mechanism (CBAM) on beef trade for Argentina, Brazil and Uruguay. The model considers a baseline bilateral trade matrix, emission intensities, international transport emissions, and potential carbon prices, resulting in the corresponding impacts on imports and exports, depending on the scenario considered. The results indicate that imposing a carbon tax within the EU leads to reduced beef imports, increased domestic prices, and potential carbon leakage. However, deploying a CBAM could mitigate carbon leakage and further reduce emissions. This study contributes to the discussion on the consequences for livestock production in South America of the advancement of emission reduction policies in agriculture driven by developed countries and their implications for the configuration of international trade.

Suggested Citation

  • Cabrini, Silvina & Olemberg, Demián & Cristeche, Estela & Pace, Ignacio & Amaro, Ignacio Benito, 2024. "Agriculture carbon pricing in EU, carbon leakage and carbon adjustment mechanism impacts in southern cone beef exports," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344399, International Association of Agricultural Economists (IAAE).
  • Handle: RePEc:ags:cfcp15:344399
    DOI: 10.22004/ag.econ.344399
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    References listed on IDEAS

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    1. Shigekazu Kawashima & Deffi Ayu Puspito Sari, 2010. "Time-varying Armington elasticity and country-of-origin bias: from the dynamic perspective of the Japanese demand for beef imports," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 27-41, January.
    2. Kawashima, Shigekazu & Sari, Deffi Ayu Puspito, 2010. "Time-varying Armington elasticity and country-of-origin bias: from the dynamic perspective of the Japanese demand for beef imports," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 1-15.
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    Keywords

    Environmental Economics and Policy; International Relations/Trade;

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