Abstract

We assess how agriculture may contribute to the mitigation of EU greenhouse gas emissions, and analyze how this contribution varies in both space and time. This assessment relies on a supply-side micro-economic model of the European agricultural sector for a set of farms representative of the diversity of conditions of production at the regional level in Europe. The model endogenously accounts for agricultural sources of methane and nitrous oxide emissions. We take advantage of the large variability in agricultural input and output prices between 2007 and 2012 to quantify how marginal abatement costs curves were impacted at both EU-wide, regional and farm levels. The results indicate that, on average over 2007-2012, EU agriculture may reduce its emissions by approximately 10, 20, and 30%, respectively for emission prices of 38, 112.5, and 205 EUR/tCO2eq. These average results mask contrasted impacts on base emissions and the rate of abatement across space and time. Based on the simulation results, we estimate a simple yet flexible, non-linear reduced form of abatement supply curve for each EU region and each year.

Co-authors : Ancuta Isbasoiu and Pierre-Alain Jayet

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