Pricing GHG emissions related to agriculture on producer’s vs. consumer’s side: What should be preferred?
Introduction of CO2-tax on greenhouse gas emissions related to agriculture could reduce them. What impacts would such policy measure have? Is a tax on producer’s or on consumer’s side to prefer?
The Federal Government of Germany has set ambitious greenhouse gas (GHG) emissions reduction goals. From the scientific point of view, the carbon (or CO2-eq.) pricing is the most favored measure to reduce GHG emissions. Such pricing would have the best effect if it would be introduced worldwide and for all kinds of GHG emissions. The EU Emission Trading Scheme (ETS) is the key pillar of the European climate policy. Its intention is a price setting on GHG emissions within the energy and industry sectors. However, more than half of the GHG emissions come from sectors which are not covered by the EU ETS, including emissions from agriculture.
The aim of this study is to quantify the effects of the introduction of CO2-tax on greenhouse gas emissions related to agriculture.
The study starts with an overview of the GHG emissions which occur as a result of agricultural production. In doing so, we will show that the total amount of GHG emissions related to agriculture as well as their regional distribution vary depending on the accounting method applied. After disclosing the main sources of GHG emissions related to agriculture, we focus on policy initiatives for the reduction of GHG emissions, already implemented or planned. The first two working steps form the basis for the conception of the model scenarios which have to be analyzed.
For simulation calculations the general equilibrium model MAGNET (Modular Applied GeNeral Equilibrium Tool) is used.
The results of the project are published in the series of the Landwirtschaftliche Rentenbank, available at:
3.2018 - 1.2019