Determinants of greenhouse gas emissions by Brazilian agricultural sector.

Abstract

The agricultural sector is one of the most polluting economic activities, contributing significantly to greenhouse gas (GHGs) emissions. Brazil is one of the largest agricultural producers worldwide and plays a major role in reducing the environmental impact of this sector. Here, we aimed to determine the impact of the agricultural sector, with special attention to production, prices, and trade openness, on the short- and long-term GHGs emissions of Brazilian agriculture. Employing data from 1974 to 2019, we tested the cointegration of variables and compared the determinants of GHG emissions using Autoregressive Distributed Lag (ARDL) and Vector Error Correction Model (VECM) methods. Our results show a long-term equilibrium trend for Brazilian agricultural GHGs emissions, a result that correlates with emerging environmental compliance, and society demands the adoption of sustainable technologies, processes, and policies. In the short run, both cattle herds and Agricultural Added Value to GDP per capita showed an expected positive and significant contribution to GHGs emissions, while agricultural crop area demonstrated an inverse relationship. The trade openness index confirmed that foreign trade plays an important role in reducing GHGs emissions. The price index is not significant in our models. Both the private and public sectors have important roles in sustainable agriculture, especially in increasing system efficiency through the adoption of management and technologies that reduce GHG emissions levels.