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Abstract
The contribution of the agricultural sector to climate change is gaining more and more visibility and
therewith, interest is growing on policy options to induce agricultural GHG mitigation. However, so far
only little is known about the different impacts of specific policies on GHG mitigation on the one hand
and agricultural production and markets on the other hand. This paper provides an empirical analysis
of the impact of three alternative abatement policies (implementing an emission standard, tradable
emission permits and a livestock emission tax) to reduce agricultural GHG emissions in the EU. The
policy scenarios are designed to achieve a 20% reduction of EU agricultural GHG emissions in 2020
compared to 2004.
Projection results show that emission reduction effects per EU Member State in each scenario are
quite different from the EU average, depending on the production level and the composition of the
agricultural activities. Moreover, the policy instrument chosen makes a considerable difference with
regard to effects on production, cost-effectiveness and income redistribution within the agricultural
sector. It is also highlighted that an effective emission reduction commitment in the EU would be
diminished due to a shift of emissions from the EU to the rest of the world (emission leakage), mainly
as a result of higher net imports of feed and animal products. The estimates provided can feed the
discussion on the feasibility of integrating the agricultural sector in multi-sectoral emission abatement
policies currently in place (e.g. EU emission trading directive) or under consideration.