Publication: Modeling the Impacts of Agricultural Support Policies on Emissions from Agriculture
Loading...
Published
2020-08
ISSN
Date
2020-09-16
Author(s)
Editor(s)
Abstract
To understand the impacts of support programs on global emissions, this paper considers the impacts of domestic subsidies, price distortions at the border, and investments in emission-reducing technologies on global greenhouse gas (GHG) emissions from agriculture. It uses a counterfactual global model scenario showing how much emissions from agricultural production would change if agricultural support were abolished worldwide. The analysis indicates that, without subsidies paid directly to farmers, output of emission-intensive activities and emissions would be smaller. Without trade protection, however, emissions would be higher. This is because protection reduces global demand more than it increases supply, and partly because some countries that currently tax agriculture have high emission intensities. Policies that directly reduce emission intensities yield much larger reductions in emissions than those targeting overall productivity growth to reduce emissions because of the rebound effect. Scenario analysis to understand the impacts of repurposed agricultural policy and support measures on mitigation of greenhouse gas emissions and adaptation to climate change is being undertaken in subsequent work, which will also take account of land-use change and alternative forms of agricultural support to align objectives of food security, farmers’ income security, production efficiency and resilience, and environmental protection.
Link to Data Set
Citation
“Laborde, David; Mamun, Abdullah; Martin, Will; Pineiro, Valeria; Vos, Rob. 2020. Modeling the Impacts of Agricultural Support Policies on Emissions from Agriculture. Agriculture and Food Discussion Paper;. © World Bank. http://hdl.handle.net/10986/34453 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Repurposing Agricultural Policies and Support(The World Bank and IFPRI , 2022-01-24)The report finds that repurposing a portion of government spending on agriculture each year to develop and disseminate more emission-efficient technologies for crops and livestock could reduce overall emissions from agriculture by more than 40 percent. Meanwhile, millions of hectares of land could be restored to natural habitats. The economic payoffs to this type of repurposing would be large. Redirecting about $70 billion a year, equivalent to one percent of global agricultural output, would yield a net benefit of over $2 trillion in 20 years.Publication Agricultural Trade : What Matters in the Doha Round?(World Bank, Washington, DC, 2012-11)This survey concludes that including agriculture in the Doha Agenda negotiations was important both economically and politically, although the political resistance to reform is particularly strong in this sector. While agriculture accounts for less than 10 percent of merchandise trade, high and variable agricultural distortions appear to cause the majority of the cost of distortions to global merchandise trade. Within agriculture, most of the costs appear to arise from trade barriers levied on imports since these barriers tend to be high, variable across time and over products, and are levied by a wide range of countries. The negotiations faced a need for balance between discipline in reducing tariffs and hence creating the market access gains that are central to the negotiations, and flexibility in managing political pressures. While the approach of providing flexibility on a certain percentage of tariff lines is seriously flawed, the proposed Modalities still appear to provide worthwhile market access. Better ways appear to be needed to deal with developing countries' concerns about food price volatility while reducing the collective-action problems resulting from price insulation.Publication Agriculture and the WTO : Creating a Trading System for Development(Washington, DC: World Bank and Oxford University Press, 2004)This publication explores the key issues and options in agricultural trade liberalization from a developing country perspective. Chapters cover market access, domestic support, export competition, quota administration methods, food security, biotechnology, intellectual property rights, agricultural trade under the Uruguay Round Agreement on Agriculture (URAA), and many other subjects, always focusing on the question of how the outcome of the World Trade Organization (WTO) negotiations can be made pro-development. Material is covered in summary and in comprehensive detail with supporting data tables, text boxes, figures, and a detailed table of contents. Many chapters have a substantial bibliography, listings of online resources, and tables summarizing the major points of WTO member country proposals that deal directly with each chapter topic.Publication Deforestation Trends in the Congo Basin : Agriculture(World Bank, Washington, DC, 2013-04)The Congo Basin represents 70 percent of the African continent's forest cover and constitutes a large portion of Africa's biodiversity. Agricultural development is a central lever to help people out of poverty, as well as a key driver of deforestation. Forest-friendly agricultural development is a challenge for the region. This report describes some ways forest-friendly agricultural development can materialize in the Congo Basin. It is one of a series of reports prepared during a two-year attempt to analyze and better understand deforestation dynamics in the Basin. The report presents findings related to the agricultural sector in the Congo Basin and its potential impact on forest cover. It is based on an in-depth analysis of the sector, from previous trends through future prospects. It builds on results derived from a modeling exercise conducted by the International Institute for Applied Systems Analysis (IIASA) that scrutinized national, regional, and international trends in agricultural sectors and trade, and their impacts on Congo Basin forests. The structure of the report is as follows: chapter one gives an overview of the agricultural sector in the six countries, including an analysis of the sector's impact so far on forest cover; chapter two describes the prospects for development of agriculture in the near future and the potential impacts on forest under a business-as usual scenario; and chapter three identifies potential key levers in agricultural policy that can enable forest-friendly agriculture.Publication Welfare and Poverty Effects of Global Agricultural and Trade Policies Using the Linkage Model(World Bank, Washington, DC, 2009-06)This paper analyzes the economic effects of agricultural price and merchandise trade policies around the world as of 2004 on global markets, net farm incomes, and national and regional economic welfare and poverty, using the global economy wide Linkage model, new estimates of agricultural price distortions for developing countries, and poverty elasticity's approach. It addresses two questions: to what extent are policies as of 2004 still reducing rewards from farming in developing countries and thereby adding to inequality across countries in farm household incomes? Are they depressing value added more in primary agriculture than in the rest of the economy of developing countries, and earnings of unskilled workers more than of owners of other factors of production, thereby potentially contributing to inequality and poverty within developing countries (given that farm incomes are well below non-farm incomes in most developing countries and that agriculture there is intensive in the use of unskilled labor)? Results are presented for the key countries and regions of the world and for the world as a whole. They reveal that, by moving to free markets, income inequality between countries will be reduced at least slightly, all but one-sixth of the gains to developing countries will come from agricultural policy reform, unskilled workers in developing countries the majority of whom work on farms will benefit most from reform, net farm incomes in developing countries will rise by 6 percent compared with 2 percent for non-agricultural value added, and the number of people surviving on less than US$1 a day will drop 3 percent globally.
Users also downloaded
Showing related downloaded files
Publication China’s Export Growth and the China Safeguard : Threats to the World Trading System?(2010-05-01)Is there evidence from China's pre-WTO accession period that newly imposed U.S. or EU import restrictions deflect Chinese exports to third markets? The authors examine this question by drawing on a newly constructed data set of U.S. and EU product-level import restrictions on Chinese trade imposed between 1992 and 2001 and estimate their impact on Chinese exports to 38 alternative markets. There is no systematic evidence that the import restrictions imposed during this period resulted in Chinese exports surging to such alternate destinations. To the contrary, there is weak evidence of a chilling effect on China's exports to third markets.Publication Road Capacity, Domestic Trade and Regional Outcomes(World Bank, Washington, DC, 2021-09)What is the impact on intranational trade and regional economic outcomes when the quality and lane capacity of an existing paved road network is expanded significantly? This paper investigates this question for the case of Turkey, which undertook a large-scale public investment in roads during the 2000s. Using spatially disaggregated data on road upgrades and domestic transactions, the paper estimates a large positive impact of reduced travel times on trade as well as local manufacturing employment and wages. A quantitative exercise using a workhorse model of spatial equilibrium implies heterogeneous effects across locations, with aggregate real income gains reaching 2–3 percent in the long run. Reductions in travel times increased the local employment-to-population ratio but had no effect on local population. The model is extended by endogenizing the labor supply decision to capture this finding. The model-implied elasticity of employment rates to travel time reductions captures about one-third of the empirical elasticity.Publication Monetary Policy Strategies for Latin America(World Bank, Washington, DC, 2001-10)The authors examine possible monetary policy strategies for Latin America that may help lock in the gains the region attained in the fight against inflation in the 1990s. Instead of focusing the debate about the conduct of monetary policy on whether the nominal exchange rate should be fixed or flexible, the focus should be on whether the monetary policy regime appropriately constrains discretion in monetary policymaking. Three basic frameworks deserve serious discussion as possible long-run strategies for monetary policy in Latin America. The authors examine the advantages and disadvantages of a hard exchange-rate peg, monetary targeting, and inflation targeting, in light of monetary policy's recent track record in several Latin American countries, looking for clues about which of the strategies might be best suited to economies in the region. The answer: It depends on the country's institutional environment. Some countries appear not to have the institutions to constrain monetary policy if discretion is allowed. In those countries, there is a strong argument for hard pegs, including full dollarization, that allow little or no discretion to monetary authorities. In countries such as Chile, which can constrain discretion, inflation targeting is likely to produce a monetary policy that keeps inflation low yet appropriately copes with domestic and foreign shocks. Monetary targeting as a strategy for Latin America is not viable because of the likely instability of the relationship between inflation and monetary aggregates, of which there is ample international evidence. No monetary strategy can solve the basic problems that have existed in Latin American economies for a long time. The authors welcome the recent move in Latin American countries toward inflation targeting, but say no policy will succeed unless government policies also create the right institutional environment.Publication Mobilization Effects of Multilateral Development Banks(World Bank, Washington, DC, 2020-02)This study uses loan-level data on syndicated lending to a large sample of developing countries between 1993 and 2017 to estimate the mobilization effects of multilateral development banks (MDBs), that is, their ability to crowd-in capital from private creditors. Controlling for a large set of fixed effects, the paper shows evidence of positive and significant mobilization effects of multilateral lending on the size of bank inflows. The number of lenders and the average maturity of syndicated loans also increase. These effects are present not only on impact but last for up to three years and are not offset by a decline in bond financing. There is no evidence of anticipation effects, and the results are robust to numerous tests controlling for the role of confounding factors and unobserved heterogeneity. Finally, the results are economically sizable, indicating that MDBs can mobilize about seven dollars in bank credit over a three-year period for each dollar invested.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.