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dc.contributor.authorHIMICS MIHALYen_GB
dc.contributor.authorFELLMANN THOMASen_GB
dc.contributor.authorBARREIRO HURLE JESUSen_GB
dc.date.accessioned2020-01-09T01:05:51Z-
dc.date.available2020-01-08en_GB
dc.date.available2020-01-09T01:05:51Z-
dc.date.created2019-06-06en_GB
dc.date.issued2020en_GB
dc.date.submitted2018-09-28en_GB
dc.identifier.citationJOURNAL OF AGRICULTURAL ECONOMICS vol. 71 no. 1 p. 50-69en_GB
dc.identifier.issn0021-857X (online)en_GB
dc.identifier.urihttps://onlinelibrary.wiley.com/doi/full/10.1111/1477-9552.12339en_GB
dc.identifier.urihttps://publications.jrc.ec.europa.eu/repository/handle/JRC113355-
dc.description.abstractWe quantitatively assess the impacts of re‐allocating budgetary resources within Pillar 1 of the EU's Common Agricultural Policy (CAP) from direct income support to a direct greenhouse gas (GHG) reduction subsidy for EU farmers. The analysis is motivated by the discussion on the future CAP, with calls for both an increased ambition on climate action from the agricultural sector and for a more incentive‐based delivery system of direct payments under strict budgetary restrictions. By conducting a simulation experiment with an agricultural partial equilibrium model (CAPRI), we are able to factor in farmers’ supply and technology‐adjusting responses to the policy change and to estimate the potential uptake of the GHG‐reduction subsidy in EU regions. We find that a budget‐neutral re‐allocation of financial resources towards subsidised emission savings can reduce EU agricultural non‐CO2 emissions by 21% by 2030, compared to a business‐as‐usual baseline. Two‐thirds of the emission savings are due to changes in production levels and composition, implying that a significant part of the achieved GHG reduction is offset globally by emission leakage. At the aggregated level, the emission‐saving subsidy and increased producer prices compensate farmers for the foregone direct income support, but differences in regional impacts indicate accelerated structural change and heterogeneous income effects in the farm population. We conclude that the assumed regional budget‐neutrality condition introduces inefficiencies in the incentive system, and the full potential of the EU farming sector for GHG emissions reduction is not reached, leaving ample room for the design of more efficient agricultural policies for climate action.en_GB
dc.description.sponsorshipJRC.D.4-Economics of Agricultureen_GB
dc.format.mediumOnlineen_GB
dc.languageENGen_GB
dc.publisherWILEY-BLACKWELLen_GB
dc.relation.ispartofseriesJRC113355en_GB
dc.titleSetting Climate Action as the Priority for the Common Agricultural Policy: A Simulation Experimenten_GB
dc.typeArticles in periodicals and booksen_GB
dc.identifier.doi10.1111/1477-9552.12339 (online)en_GB
JRC Directorate:Sustainable Resources

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