Policy Scenario Analyis

Chrystalyn Ivie RamosResearch Unit Sustainability and Global Change

Hamburg University

23 April 2008

Policy

• Greenhouse gas tax

Mitigation PotentialsMitigation Potentials

0

50

100

150

200

250

300

350

400

450

500

0 100 200 300 400 500 600 700 800

Car

bon

pric

e (E

uro/

tce)

Mitigation (mmtce)

TechnicalPotentialCompetitive

Potential

0

50

100

150

200

250

300

350

400

450

500

0 100 200 300 400 500 600 700

Car

bon

Pri

ce in

Eur

o/m

tce

Total Agricultural and Forest Greenhouse Gas Emission Abatement in mmtce

Crop Area Fixed

Crop Area and

Prices Fixed

Crop Area and Prices Endogenous

Prices Fixed

0

50

100

150

200

250

300

350

400

450

500

0 100 200 300 400 500 600 700 800 900

Car

bon

Pri

ce in

Eur

o/m

tce

Total Agricultural Greenhouse Gas Emission Abatement in mmtce

Competitive Economic Potential

Simult. Technical Potential

Independent Geographic Potential

IndependentTechnical Potential

0

50

100

150

200

10 Euro/tce 50 Euro/tce 100 Euro/tce 200 Euro/tce

Crop Emissions [mmtce]Livestock Emissions [mmtce]

Tillage Carbon Sequestration [mmtce]Crop and Livestock Emissions [kgce/acre]

Tree Sequestration [mmtce]Bioenergy Offsets [mmtce]

Arable Land Loss [mill acres]Pasture Loss [mill acres]

Forest and Energy Crop Plantations [mill acres]Crop Price Increase [Percent]

Livestock Price Increase [Percent]Net Export Losses [Percent]

-10

-8

-6

-4

-2

0

2

4

6

8

0 20 40 60 80 100

Bill

ion

Eu

ros

Carbon Equivalent (CE) Prices in Euros per Ton

Changes in Welfare Accounts

Gross Ag-Producer Surplus

Emission Payments

Net Ag-Producer Surplus

Ag-Consumer Surplus

GHG Mitigation and MarketsGHG Mitigation and Markets

20

40

60

80

100

120

140

160

180

200

220

0 50 100 150 200 250 300

Fis

her

ind

ex

Carbon price (Euro/tce)

Crop prices

Livestock prices

Livestock production

Crop productionNet exports

Climate Policy and BioenergyClimate Policy and Bioenergy

0

100

200

300

400

500

0 50 100 150 200 250 300 350

Car

bon

pric

e ($

/ton

of

carb

on)

Emission offsets (million metric tons of carbon)

Technical Potential

Economic Potential

Competitive EconomicPotential

0

10

20

30

40

50

60

70

80

0 20 40 60 80 100

Ene

rgy

Cro

ps (

mil

lion

acr

es)

Carbon tax on energy ($/ton of carbon)

2010 Capacity

2030 Capacity

2050 Capacity

UnrestrictedCapacity

Power Plant Biomass SupplyPower Plant Biomass Supply

Afforestation PotentialsAfforestation Potentials

0

100

200

300

400

500

0 50 100 150 200 250 300

Car

bon

pric

e (E

uro/

tce)

Emission reduction (mmtce)

Technical Potential

Economic PotentialCompetitive

Economic Potential

Biofuel Policy: Livestock EmissionsBiofuel Policy: Livestock EmissionsE

mis

sion

red

uct

ion

(m

mtc

e)

Biofuel carbon price (Euro/tce)

0

1

2

3

4

5

6

7

0 50 100 150 200 250 300 350 400 450 500

Total LivestockEmission Reductions

Less Enteric Fermentation

Manure Emission Reductions

Forest Policy: Crop EmissionsForest Policy: Crop EmissionsE

mis

sion

s (k

g C

/ha)

Carbon price (Euro/tce)

-15

-10

-5

0

5

10

15

0 50 100 150 200 250 300

Nitrogen Fertilizer

Ag-Soil Carbon

Irrigation Use

Fossil Fuel Use