This document analyzes the environmental impacts of agricultural support policies by examining patterns of agricultural emissions, types of agricultural support, and the effects of support reform and productivity improvements on emissions. It finds that emissions are highly concentrated in beef, dairy and rice production. Agricultural support varies globally but includes relatively high protection for dairy, beef and rice as well as export taxes and coupled subsidies. Reforming certain types of support, like eliminating coupled subsidies, could help reduce emissions by 0.7%, while productivity improvements that save inputs and cut emission intensities could significantly reduce emissions worldwide.

1. Environmental Impacts of
Agricultural Support: Aligning
Food Security & Climate
Protection Objectives
David Laborde, Abdullah Mamun, Will
Martin & Valeria Piñeiro
8 October 2019

2. Roadmap
1. Patterns of Agricultural Emissions
2. Agricultural Support
3. Impacts of Support Reform for Emissions
4. Impacts of Productivity Improvements on Emissions
5. Further work

3. 1. Patterns of Agricultural Emissions

4. Prodn Emissions by Commodity, %
0
10
20
30
40
50
60
Rice Other Cereals Milk Ruminant meat Pigmeat Poultry
OECD Non-OECD

5. Emissions by commodity & source%
Rice
Other
Cereals
Milk
Ruminant
meat
Pigmeat Poultry Total
Crop residues 1.5 3.6 0 0 0 0 5.1
Enteric fermentation 0 0 11 30.5 0.6 0 42.1
Manure 0 0 6.2 16.8 3.7 2.9 29.6
Pesticides 0.2 0.8 0 0.1 0 0 1.1
Rice cultivation 12.6 0 0 0 0 0 12.6
Synthetic Fertilizers 2.4 6.5 0 0.7 0 0 9.6
Total 16.7 10.9 17.2 48.1 4.3 2.9 100

6. 2. Agricultural Support

7. Nominal Rates of Assistance, %
0
10
20
30
40
50
60
70
80
1991 1996 2001 2006 2011 2016
Nominalrateofasistance(%)
OECD
-20
-10
0
10
20
30
40
50
60
70
80
1993 1998 2003 2008 2013
Non-OECD
Market Price Support
Coupled Subsidies
Decoupled Subsidies
Total Support

8. Producer Assistance, $bn, 2016-18
Market Price
Support, 201
Coupled
Subsidies, 178
Decoupled
Subsidies, 66
General
Services , 105

9. Average Import Price Support, %
0
5
10
15
20
25
30
Rice Sugar Milk Pork/Poultry Beef Veg/Fruits Wheat
%

10. Export taxes, %
Farm Milk Beef Rice Sugar Veg/Fruits Wheat
World 2.6 0.6 3.8 8.9 -0.5 1.4 3.7
Developed 0.2 -0.2 1.1
Developing 4.6 2.9 8.7 10.0 -0.6 1.9 16.8
Canada -0.2 -22.0
Indonesia 0.2 9.1
India 15.3 25.1 37.3 11.1 -19.8 33.6 21.1
Kazakhstan 7.4 40.9 2.4
Ukraine 17.5 24.4 25.9
Vietnam 14.2 22.6
Sub-Saharan Afr 5.6 13.9 10.4 8.5

11. 3. Impacts of Subsidy Reform

12. Qualitative impacts
Inefficiency Emissions
Market Price Support ++ +/-
Coupled Subsidies + ++
Decoupled Subsidies 0 0
General Services - - or --

13. Why the different rankings?
• Market price support to emission-intensive goods
• Inefficient because it raises output, reduces consumption
• Ambiguous impact on emissions
• Mostly imposed in import-competing countries
• Stimulates output, but reduces consumption
• Global impact on consumption may outweigh demand impact
• Coupled subsidies
• Less inefficient than Market Price Support
• Only stimulate output, don’t reduce consumption
• Unambiguously increase global output

14. Simulations
• MIRAGRODEP Model
• Builds on GTAP v10 database
• With complementary data from Ag-Incentives, IMF & FAOSTAT
• Emissions model by commodity and type of emissions
• Static simulations
• Land use held constant to focus on emissions from agric

15. Abolishing coupled subsidies
Crop Residues
12%
Enteric
Fermentation
25%
Manure
16%
Rice
Cultivation
5%
Fertilizer
42%
Total Impact -34kt CO2
equivalent
-0.7% of Agric Emissions

16. Abolishing Border Measures, kt CO2
-60000
-40000
-20000
0
20000
40000
60000
80000
Total Impact +127kt
2.4% of Agric Emissions

17. 4. Productivity Improvements

18. Productivity growth
• Needs to be input-saving
• Total factor productivity with the same inputs no help
• Saving inputs & factors economically desirable
• But “rebound” effect a potential problem for emissions
• Specific cuts in emissions best for emission redn.
• eg tech changes that reduce methane emissions

19. Impacts on emissions of cutting
emission intensities by 30%
Pure Emission-Reducing Factor & Input Saving
World -19.5 -9.5
Developed -27.7 -11.2
Developing -17.1 -8.9
OECD Sample -28.8 -8.6

20. Further work

21. Important next steps
• Dynamic baseline– the counterfactual is changing
• Add land use change & associated emissions
• Global distortions & new policy options
• Technological & productivity responses

22. Conclusions
• Emissions highly concentrated in beef, dairy, rice
• Support patterns diverse
• Relatively high protection to dairy, beef & rice
• Export taxes & coupled subsidies surprisingly important
• Market price support reduces global demand
• Eliminating MPS actually increase emissions by 2.5%
• Eliminating coupled subsidies reduces emission by 0.7%
• Investments in productivity improvements
• Very large emission reductions if focused on emission redn
• Still large reductions if productivity saves inputs & factors
• But reduced by the “rebound” effect