GREENHOUSE GAS EMISSION TRADING IN EUROPEAN AGRICULTURE: A COMPARISON OF DIFFERENT POLICY IMPLEMENTATION OPTIONS IN YEAR 2020
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In this paper the agricultural sector model CAPRI is expanded to cover non-CO2 greenhouse gas emissions from agricultural sources in Europe and policy instruments for their reduction. A stylised spatial trade model for emission permits is methodologically described and applied to the assessment of three potential policy alternatives for enforcing emission reductions from European agriculture: the EU ‘effort sharing agreement’, an EU-wide emission trading scheme between regions inside each Member State and, finally, an EUwide emission trading scheme between all European regions. This paper builds
in the experience accumulated by Pérez Domínguez et al. (2010) and provides a through review of the underlying methodology, a expansion of emission sources and a larger projection line (year 2020). Results shows the importance of selecting an adequate combination of instruments of emission abatement for the design of efficient emission reduction policies.