In 2005 the highest global surface temperature ever was recorded. A virtual consensus exists today among scientists that global warming is underway and that human greenhouse gas (GHG) emissions are a significant cause. Possible mitigation of climate change through reduction of net GHG emissions has become a worldwide concern. Under the United Nation’s Framework convention on Climate Change, the Kyoto Protocol was formed in 1997 and required ratifying countries to co-operate in stabilizing atmospheric GHG concentrations. The protocol took effect on February 16, 2005. The mitigation cost for reducing GHG emissions for the US economy has been argued to be high particularly through the energy sector. Agriculture and Forestry (AF) can provide some low cost strategies to help with this mitigation principally through carbon sequestration but must be competitive with mitigation costs in the rest of the economy. A general equilibrium approach is used herein to evaluate the role of AF mitigation in an economy wide setting. The results show that the AF sectors have significant mitigation potential. Higher carbon prices lead to more sequestration, less emissions, reduced consumer and total welfare, improved environmental indicators and increased producer welfare. AF mitigation increases as the carbon price increase over time. In the earlier periods, while the carbon price is low, AF emissions and sink are quite small compared to the energy sector. As carbon prices increase over time, the AF sectors mitigate about 25% of the net emissions. This verifies McCarl et al's (2001) argument that the AF sectors “may be very important in a world that requires time and technological investment to develop low-cost greenhouse gas emission offsets.” AF GHG emission mitigation is sensitive to saturation of sequestration sinks. This research finds that ignoring saturation characteristics leads to a severe overestimate of mitigation potential with estimates being inflated by as much as a factor of 6.

In 2005 the highest global surface temperature ever was recorded. A virtual consensus exists today among scientists that global warming is underway and that human greenhouse gas (GHG) emissions are a significant cause. Possible mitigation of climate change through reduction of net GHG emissions has become a worldwide concern. Under the United Nation’s Framework convention on Climate Change, the Kyoto Protocol was formed in 1997 and required ratifying countries to co-operate in stabilizing atmospheric GHG concentrations. The protocol took effect on February 16, 2005. The mitigation cost for reducing GHG emissions for the US economy has been argued to be high particularly through the energy sector. Agriculture and Forestry (AF) can provide some low cost strategies to help with this mitigation principally through carbon sequestration but must be competitive with mitigation costs in the rest of the economy. A general equilibrium approach is used herein to evaluate the role of AF mitigation in an economy wide setting. The results show that the AF sectors have significant mitigation potential. Higher carbon prices lead to more sequestration, less emissions, reduced consumer and total welfare, improved environmental indicators and increased producer welfare. AF mitigation increases as the carbon price increase over time. In the earlier periods, while the carbon price is low, AF emissions and sink are quite small compared to the energy sector. As carbon prices increase over time, the AF sectors mitigate about 25% of the net emissions. This verifies McCarl et al's (2001) argument that the AF sectors “may be very important in a world that requires time and technological investment to develop low-cost greenhouse gas emission offsets.” AF GHG emission mitigation is sensitive to saturation of sequestration sinks. This research finds that ignoring saturation characteristics leads to a severe overestimate of mitigation potential with estimates being inflated by as much as a factor of 6.

Agriculture causes large parts of global Greenhouse gas emissions (GHGE), with livestock contributing the greatest share. Livestock-based foods are thus associated to higher GHGE than plant-based foods. Additionally, they are harmful to health when consumed in excess. The focus of this work lies on determining the potential to reduce agricultural GHGE when healthy diets and lower meat intakes were adopted in the EU. lt is also examined how much feed crops and pastures would become available for the production of biofuels. An emission tax and an emission trading system are also examined. To assess the complex interactions in the agricultural sector, a modified version of the European Forest and Agricultural Sector Optimization Model (EUFASOM) is used. The results show that a halved meat intake could reduce agricultural GHGE by a quarter and biofuel production could increase eightfold. The political instruments lack effectiveness though. The GHG tax has a low impact on nutrition and roughly 50% emission leakage. Emission trading has only a moderate effect on nutrition and over 100% emission leakage.:1 Introduction 2 Goal and scope definition 3 Methodology 3.1 Overview 3.2 Spatial resolution 3.3 Products under consideration 3.4 Base data 3.4.1 Base quantities 3.4.2 Base prices 3.4.3 Base areas 3.4.4 Demand elasticities 3.5 Production processes 3.5.1 Crop production 3.5.2 Pasture production 3.5.3 Plant oil production 3.5.4 Biofuel production 3.5.5 Sugar production 3.5.6 Livestock production 3.6 EUFASOM – Theoretical foundation 3.7 EUFASOM – Demand and supply functions 3.8 EUFASOM – Model description 3.8.1 Objective function 3.8.2 Identity and convexity constraints 3.8.3 Product balance 3.8.4 Land use restrictions 3.8.5 Nitrogen balance 3.8.6 Further accounting equations 3.9 Calibration 3.10 Integration of scenarios 4 Scenarios and results 4.1 Scenario 1: Technical potential of healthy diets 4.1.1 What are healthy diets? 4.1.2 Implementation of healthy diets 4.1.3 Scenario 1.1: Healthy diets with constant calorie intake 4.1.4 Scenario 1.2: Healthy diets with restricted calorie intake 4.1.5 Scenario 1.3: Healthy diets with restricted ruminant meat intake 4.1.6 Discussion on the potentials of healthy diets 4.2 Scenario 2: Greenhouse gas emission taxes 4.3 Scenario 3: Redistribution of emissions taxes as biofuel subsidy 4.4 Scenario 4: Emissions trading scheme for agriculture 4.4.1 Scenario 4.1: GHGE-cap on agricultural production 4.4.2 Scenario 4.2: Combined GHGE-cap on agricultural production and net-imports 4.4.3 Scenario 4.3: GHGE-cap on agricultural production and generation of allowances through producing biofuels 4.4.4 Scenario 4.4: GHGE-cap on agricultural production and imports and generation of allowances through producing biofuels 4.4.5 Discussion on ETS 5 Summary and conclusion References List of Figures List of Tables List of Abbreviations Annex 1 Base Solution Annex 2 Process parameters and associated information Annex 3 Lists of model variables, process parameters, equations and sets Annex 4 Demand elasticities Annex 5 Derivation of specific energy and protein demand of livestock Annex 6 Further assumptions for the livestock sectors